Friday, August 1, 2014

AUDUSD - 1 August 2014 - Observations

There were no trades during the Asian session today. I spotted one setup but didn't take it. I'll post an observation about why I didn't trade it.

This looked like a viable setup when I first saw it (HVLR candle), but it just didn't tick all the boxes. Since I felt unsure, I decided to skip the setup (marked purple). 

The setup had formed at a tradable level, forming off 0.93000 (a round number) and off the Asian opening range. 

However, it had quite a few things going against it. I noticed that the move down was VERY STRONG compared to the upward move (compare the orange dotted line on the way up vs the way down). Plus the pullback was very deep (about 80%). There was also a significant S/R level above it. If the entry signal had formed above this S/R level, I probably would've taken it. But as it was, I wasn't 100% comfortable. 

Price continued falling shortly after.

(click to enlarge)

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