Dear followers,
Today we will talk about SL again. I am sure many of you would make use of it in your trades as exhorted by your GURUS. Or you may have learn to use it based on the lessons you had learned elsewhere.
This game is about constantly finding what works and what doesn't.
Instead of using SL, perhaps you should consider the fact the currently, SELLERS are in CONTROL. Until the facts change and BUYERS begin to take control, the overall direction is to sell. If you can understand this, then you should know SL is more of less redundant. Take a look at the price action ever since the US CPI for June was announced. Clearly a lot of money was lost because of SL. SL is a sure way for you to lose money instead of 'protecting' your capital. When you use SL, they can see it. It is just like playing poker with all your cards visible to the banker.
Today, let me tell you something different from what you would usually hear. Same chart above but with a different story. One story is the standard narrative that you always hear and One that you might never or less often.
STANDARD NARRATIVE:
a) a lot of buy orders just above 1.00 just to try their luck that price will not break below 1.00. Of course price went below and hit all the SL.
b) on seeing price broke resistance at 1.00, a lot of Sell orders ensued but then, price went up instead. Again, all lost money due to SL.
3) they are saying it might be a 'false' breakout. Euro is OVERSOLD and so price is now moving up again. Seeing such price moving upward, I am sure a lot will put in buy order probably at 1.0050 - 1.0080.
4) some might say when price hit below 1.00, there are a lot of profit taking activities going on and perhaps that is why price went up.
If you believe the above, then you would believe anything.
Now if you believe in Demand & Supply, then perhaps we can believe that price action is caused by basic human FEAR and GREED. I think this sounds more logical than the standard narrative.
DEMAND & SUPPLY NARRATIVE:
a) in general, price is going down after the US June 2022 CPI print @ 9.1%.
b) If you are holding Euro, you would FEAR that price will drop further and you begin to SELL.
c) If you are holding Dollar, you will sit back and wait.
d) Once price broke below 1.00, a lot of excitement was created. Resistance is actually broken. Sellers celebrating.
e) Those holding Dollar becomes GREEDY. They want more DOLLARS.
f) Those not holding Dollar wants some DOLLAR.
g) Price moves UP in search of 'SUPPLY ZONE'. Supply of EURO is equivalent to Demand for Dollar. So when price moves up, it can be explained as 'Dollar Demand'. When price moves up, for every Euro given up, we get less Dollar in exchange. But because of greed and lust for DOLLAR, we can bear with the situation so long we get our hands on more DOLLAR. That is why Supply/Demand zones are critical to understand because that is where the money lies.
h) Another way of getting more supplies of Dollar is by taking it from other Sellers - especially those with SL.
This holds true as long as SELLER is in CONTROL. The reverse happens when BUYER takes over control. So the study of Demand & Supply is primarily focused on finding WHO IS IN CONTROL. Those in control CONTROLS THE PRICE.
Hopefully with this simple explanation, we can understand more about Demand & Supply. Like they say, there are always two sides to a coin. It is just a matter of understanding BOTH instead of just focusing on ONE.
P/S : As usual, I am just blabbing. Do not believe a word I say. Instead, use your common sense.
Today we will talk about SL again. I am sure many of you would make use of it in your trades as exhorted by your GURUS. Or you may have learn to use it based on the lessons you had learned elsewhere.
This game is about constantly finding what works and what doesn't.
Instead of using SL, perhaps you should consider the fact the currently, SELLERS are in CONTROL. Until the facts change and BUYERS begin to take control, the overall direction is to sell. If you can understand this, then you should know SL is more of less redundant. Take a look at the price action ever since the US CPI for June was announced. Clearly a lot of money was lost because of SL. SL is a sure way for you to lose money instead of 'protecting' your capital. When you use SL, they can see it. It is just like playing poker with all your cards visible to the banker.
Today, let me tell you something different from what you would usually hear. Same chart above but with a different story. One story is the standard narrative that you always hear and One that you might never or less often.
STANDARD NARRATIVE:
a) a lot of buy orders just above 1.00 just to try their luck that price will not break below 1.00. Of course price went below and hit all the SL.
b) on seeing price broke resistance at 1.00, a lot of Sell orders ensued but then, price went up instead. Again, all lost money due to SL.
3) they are saying it might be a 'false' breakout. Euro is OVERSOLD and so price is now moving up again. Seeing such price moving upward, I am sure a lot will put in buy order probably at 1.0050 - 1.0080.
4) some might say when price hit below 1.00, there are a lot of profit taking activities going on and perhaps that is why price went up.
If you believe the above, then you would believe anything.
Now if you believe in Demand & Supply, then perhaps we can believe that price action is caused by basic human FEAR and GREED. I think this sounds more logical than the standard narrative.
DEMAND & SUPPLY NARRATIVE:
a) in general, price is going down after the US June 2022 CPI print @ 9.1%.
b) If you are holding Euro, you would FEAR that price will drop further and you begin to SELL.
c) If you are holding Dollar, you will sit back and wait.
d) Once price broke below 1.00, a lot of excitement was created. Resistance is actually broken. Sellers celebrating.
e) Those holding Dollar becomes GREEDY. They want more DOLLARS.
f) Those not holding Dollar wants some DOLLAR.
g) Price moves UP in search of 'SUPPLY ZONE'. Supply of EURO is equivalent to Demand for Dollar. So when price moves up, it can be explained as 'Dollar Demand'. When price moves up, for every Euro given up, we get less Dollar in exchange. But because of greed and lust for DOLLAR, we can bear with the situation so long we get our hands on more DOLLAR. That is why Supply/Demand zones are critical to understand because that is where the money lies.
h) Another way of getting more supplies of Dollar is by taking it from other Sellers - especially those with SL.
This holds true as long as SELLER is in CONTROL. The reverse happens when BUYER takes over control. So the study of Demand & Supply is primarily focused on finding WHO IS IN CONTROL. Those in control CONTROLS THE PRICE.
Hopefully with this simple explanation, we can understand more about Demand & Supply. Like they say, there are always two sides to a coin. It is just a matter of understanding BOTH instead of just focusing on ONE.
P/S : As usual, I am just blabbing. Do not believe a word I say. Instead, use your common sense.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.