Second retest back into a strong demand / support area , possible retracement, long opportunity.
(Notice the first retest is always a stronger signal)
Stuff to remember:
— First look for significant move, then follow it to its origins where you might find a suitable level to evaluate further
— Make sure the initial move is significant on the same timeframe as the one you use for viewing your candidate level most clearly
— Check the distance that price traveled before the trend ended, longer distances mean larger initial imbalances and improved probabilities in the future
— The strong initial move can contain a few small retracements but not so many that make this move slow and weak
— Avoid opposing levels on the same and immediately higher timeframes, prefer to have a clear road ahead for your trade to run
— Make sure your level is placed correctly (low for Demand, high for Supply) in relation to the big picture's important tops and bottoms
— Trading the first return of price to a valid "fresh" level carries the highest probabilities due to the larger imbalance
— A valid level is considered "fresh" if price has not returned to it since its creation. It has nothing to do with how old the level is
Click here to view my original post on TradingView.
Disclaimer: Trading has a high risk level and may not be suitable for all investors. Before you decide to invest, carefully consider your investment goals and risk willingness. The possibility is that you can sustain a loss of some or all of your initial investment and therefore you should not invest money that you can not afford to lose. You should be aware of all risks associated with currency trading and seek advice from an independent financial adviser if in doubt. I'm not a financial advisor and there is also no content in this article that is presented as financial advisory.
