The Bull's view. Read this you will certain change your thinking
I haven't been posting my odd patterns recently If you have noticed. Well, I have been studying them into detail to perfect their accuracy. What I have come to realise that all patterns work, and they are accurate. However, in approaching into such conclusion I must consider the market's condition. The background information has its relevance in these harmonic patterns. Yes! They can appear right sometimes but remember if you haven't thoroughly studied the past, you will easily fall into a trap ( I will explain what I mean by referring this as a trap). So the law of an accurate harmonic pattern is (to my level of understanding):- " All proven harmonic patterns are accurate given to a right sentiment of the market. These sentiments have to support the pattern"
Earlier I noted down a trap. Well what I mean by a trap is that all forex markets have a tendency of posing along the way when trending. These posing periods are called distribution/accumulation points. I am definitely sure you know what I mean by those "posing periods"? This is when there isn't any major movements to profit from. In the streets we say "the market is ranging". These periods are caused by the existing resistance in the market. Now how do resistance come into light? Well, you will have to think back to the laws of supply and demand. The changes in relation between supply and demand has its effect on the price. It is important to have this knowledge when participating trading in these markets. It is VERY IMPORTANT.
Supply and demand break down
Example, your favourite book is out. At first the price of the book will be expensive when released. The reason behind this is that there's high demand of that book but less supply. Logically thinking: If the books price was less expensive then they would have gone out of stock within a day or so and the author wouldn't have made profit!
Accumulation and distribution, apparently they were designed to trap us( they refer us as the herds ) into a poor trading position by the market makers. I will give you an example of a scenario. Lets say you had a bullish view on a market and you were waiting for a confirmation. To put it into a clear perspective, let's imagine that day there is good news expected, Then you have it there, right in front of your face, the big Bullish Candle. You will then appear hesitant to open a position. This is because you were wishing that back in time you would have bought it at a cheaper price. This is a human nature. Anyway, you will either open a position or wait for a nice entry. Now this can be a very stressful situation because to those who are going to hold back and wait for retracement let's say. He/She will definitely miss a next move. (I am one of these victims but now I know!)
Part 2, continues....
Earlier I noted down a trap. Well what I mean by a trap is that all forex markets have a tendency of posing along the way when trending. These posing periods are called distribution/accumulation points. I am definitely sure you know what I mean by those "posing periods"? This is when there isn't any major movements to profit from. In the streets we say "the market is ranging". These periods are caused by the existing resistance in the market. Now how do resistance come into light? Well, you will have to think back to the laws of supply and demand. The changes in relation between supply and demand has its effect on the price. It is important to have this knowledge when participating trading in these markets. It is VERY IMPORTANT.
Supply and demand break down
Example, your favourite book is out. At first the price of the book will be expensive when released. The reason behind this is that there's high demand of that book but less supply. Logically thinking: If the books price was less expensive then they would have gone out of stock within a day or so and the author wouldn't have made profit!
Accumulation and distribution, apparently they were designed to trap us( they refer us as the herds ) into a poor trading position by the market makers. I will give you an example of a scenario. Lets say you had a bullish view on a market and you were waiting for a confirmation. To put it into a clear perspective, let's imagine that day there is good news expected, Then you have it there, right in front of your face, the big Bullish Candle. You will then appear hesitant to open a position. This is because you were wishing that back in time you would have bought it at a cheaper price. This is a human nature. Anyway, you will either open a position or wait for a nice entry. Now this can be a very stressful situation because to those who are going to hold back and wait for retracement let's say. He/She will definitely miss a next move. (I am one of these victims but now I know!)
Part 2, continues....
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