Retest back into a fresh demand zone , possible retracement, long opportunity
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
@tradewonk, are you using 2618 method, i think it is very convenient when you combine it with your strategy, for example in case of NZDCAD it indicates there would be a return around 0.87800 which is fib 61.8 from the double bottom. When there is double bottom/top 2618 method is a very good tool for you i think.
hayatguzel
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@hayatguzel, if you use 2618 method for this trade Risk Reward ratio was 1:7