How I Shorted the NY top on EUR/GBP **Educational** 4/26/24
First thing I did was identify the trend.
The market is clearly locally in a downtrend, so I was looking for a short today.
The next step was to wait for New York's Initial Balance (NY IB) to form.
(The NY IB is the high and low of the first hour of NYs open.)
Once the IB is formed we wait to see how price interacts with it in order to make an educated decision.
In this case price broke above the IB and failed to find enough buyers to push higher, so price simply re-entered the IB, and formed a failed auction.
The Next thing I look for is confluence to support my idea.
You can see just above the IB high, we had the Fib golden pocket and the VWAP.
(The golden pocket is the 0.618 to 0.66 fib retracement, and the VWAP is the Volume Weighted Avg Price)
One of the final things I look at is Volume and footprint.
You can see here when I zoom in there is alot of buying into the resistance level.
And that buying is followed by even heavy selling that is causing price to reject from the resistance.
You can even see the delta is heavily negative as price moves away.
It is obvious bears are in control here
Now that everything is aligned, and I have a plan, the last part is to enter the trade.
This is simple, price gets acceptance back inside of the IB, and I entered on the backtest of the IB.
Stoploss above the high and I look to take profit at the IB low.
The market is clearly locally in a downtrend, so I was looking for a short today.
The next step was to wait for New York's Initial Balance (NY IB) to form.
(The NY IB is the high and low of the first hour of NYs open.)
Once the IB is formed we wait to see how price interacts with it in order to make an educated decision.
In this case price broke above the IB and failed to find enough buyers to push higher, so price simply re-entered the IB, and formed a failed auction.
The Next thing I look for is confluence to support my idea.
You can see just above the IB high, we had the Fib golden pocket and the VWAP.
(The golden pocket is the 0.618 to 0.66 fib retracement, and the VWAP is the Volume Weighted Avg Price)
One of the final things I look at is Volume and footprint.
You can see here when I zoom in there is alot of buying into the resistance level.
And that buying is followed by even heavy selling that is causing price to reject from the resistance.
You can even see the delta is heavily negative as price moves away.
It is obvious bears are in control here
Now that everything is aligned, and I have a plan, the last part is to enter the trade.
This is simple, price gets acceptance back inside of the IB, and I entered on the backtest of the IB.
Stoploss above the high and I look to take profit at the IB low.
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