I use a few scripts to drag/drop onto the chart to move stops, TP levels and close out entries - for some reason when that happens it draws the line & arrow the same as you see with EA backtesting (if you've ever done that), and in this case I closed out all my positions on friday before going to sleep hence the lines.madwt wrote:Edit: How do you show your trades on the chart?
Compression is a term I picked up recently from www.acegazette.com (great site, you should check it out), which basically means a lot of retracing/backtesting throughout a move. What that tends to do is eliminate any areas of pent-up demand (if its an upwards move) as the frequent retraces give opportunity for everyone to go long who wants to.Edit 2: You mention compression. E.g. On GBPUSD you say there is lots of compression in the rise, which means it could fall in a heap. Can you elaborate on that?
So when a reversal comes, there's no big block of pending orders there to stop it in its tracks, it can just smash straight through. GU over the last week is a great example.
Conversely, if the price just flies in series of big candles without a pause, that can be just as fragile - a reversal can do just the same thing in return. Look at UCAD's bouncing up & down in its 80 pip range last week as an example.
What you want to see is a short pause in a strong rise/fall where the move was challenged, followed by a strong breakout move in the same direction. For this to happen, big money has to have decided to chase the price a bit, and their presence overwhelms opposition to the move. This is the kind of thing Sam Seiden describes & its what I identify on my charts as Supply/Demand levels as distinct from the more traditional Support & Resistance. Usually the first or 2nd retrace to a Supply/Demand level will provide a great entry, assuming big money still have a bunch of orders there waiting to be executed.
Almost lunchtime here, will look at your charts later on, thanks for posting them
