DislikedHi, LJ! I hope, that you sometimes see you thread. =)
Can you advise, why i must not to take this trade opportunity on EurGbp (RN,PPZ,PB)?
And else one question. If you see good enter point on for example EUR/JPY, do you look at eur/usd and usd/jpy to see support/resistance level and make decision? Or you look other JPY pairs?Ignored
For me, I would conclude the following:
1. The PPZ is a minor one.
2. Price has indeed reacted at this area - but it's not a strong reaction compared to the move up preceding the reaction - this is pretty key...if it was a decent confluenced resistance area then I'd be expecting a bigger rejection than the pin bar that formed.
3. I'd also be looking at the location of GU and EU...it's not exact as EG has it's own flows and can lead and cause moves on GU in particular at times but it is something worth looking at IMO.
I've not been looking at charts much this week as been moving house but having a quick look at this pair, my daily PPZ's are as per chart below.
Now what I would be doing is waiting for price to approach one of these areas and then look for additional confluence...so it's easy to see that where price reversed was at a daily PPZ, 50% retracement and divergence. The setup can be seen even more clearly on the 1HR TF.
I'm not saying on another day that pin you marked would have worked out, it's just in my mind it is a lower probability setup and thus you have to adjust your risk accordingly (well that's how I do things anyway). I prefer to wait for what I consider to be the highest probability setups, ones I expect to have a >70-75% probability of going to FTA...and that mostly involves waiting for price to reach a daily PPZ.
I've only taken one trade this week (as I said not had access to internet for most of the week) and I risked 4% on it, and in my eyes I would expect the setup I took to work 9 times out of 10...and it was a touch trade setup...so something some would consider to be high risk and aggressive trading (though I strongly disagree that touch trade trading is higher risk taking than PA trading)....but it's all about waiting for price to reach those strong confluenced areas around a daily PPZ.
I don't really trade the yens at the moment, no real reason just seem to be more comfortable with USD pairs, but normally I wouldn't as as a rule of thumb look at EU and UJ when cosidering a setup on EJ. If the setup is strong enough I wouldn't take into consideration what UJ or EU were doing because EJ could actually be a clue as to what EU and UJ might do next (if the setup is strong enough), but I guess it could be supporting confluence - especially UJ. Normally I would prefer to look at YM, but correlations between stocks and FX is not overly strong IMO at the moment.
I do sometimes, if I'm looking to buy yen or usd look at UJ as that can sometimes tell me which one I'm expecting to be stronger out of the two.
BTW a spread of 3 on EG is pretty poor during liquid trading times!