AUD Today Part 2: Trade Overview

In line with the plan in the previous post, partial profits were taken yesterday’s high agreement area.
Price then had a sharp and fast sell off, and:
  1. The speed of the move used up all available sellers at that specific moment in time
  2. The speed of the move enticed “price chasers” to enter because many traders fall for the counter intuitive nature of markets, relating fast movement to price continuation. However, fast movement uses up available fuel in the short term

AUD Today Part 1: combing composite and daily profiles to support longs

Early into the Asian session, the chart below highlights the composite volume profile for the current range in the AUD.
Notice the low agreement area on the left of the chart and how price has moved away from this area recently.

AUD: Taking the other side of emotion fuelled price movement

Just prior to entering long, the AUD was trading as per the image below
  1. Notice how price failed on two occasions to push lower than the previous day’s high agreement area?
  2. Notice how today’s high agreement area indicates buyers are bidding up the market?
  3. Notice how price reached a previous earlier high and backed away immediately? This would have “technical analysis” enthusiasts chomping at the bit to get short
  4. Notice how price could only back off as far as today’s low agreement area?
  5. At that time price spent a lengthy period of time “no longer going up” enticing sellers to enter short positions. However, as a seller you would want to see stuck long traders trying to exit…. Longs were not panicking and trying to exit so they were anything but trapped.
So while I usually prefer to see multiple failed attempts by those fighting the direction before entering a trade; there were too many ducks in a row warranting a long trade.

Follow through:


AUD long recommendation: why?

I shared an AUD long trade with other traders March 15 during the Asian trading session. At the time AUD was trading as per the image below. Yes price moved up however I think it is more beneficial to show how the market was trading before it went up.

The ducks that lined up for a long trade included:
  • Notice the change in agreement over the course of the day. These areas were distinctly above the previous day’s high agreement area confirming buyers were “bidding up” the market

AUD: Why the big move up?

As per the chart below, observing the composite profile for the current range which commenced May 2016, notice the low agreement area which is a price zone where the majority of buyers and sellers didn’t want to trade.
click on image to enlarge


AUD intraday: counter intuitive traps

As per the chart below, at 12:30 price moved up to a level which had previous failed to move higher.

click on image to enlarge

Following the failed attempt of price to move higher; imagine what many traders were thinking when over the course of the next hour, price stalled as per the purple circled area?