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When the first twin tower reversal pattern formed which was straddling the central pivot point and also clearly rejecting the daily open line I figured this was a good place to get short. The price action that ensued to say was volatile is an understatement, price came all the way up to the daily open with a lot of momentum and at the time I figured this trade is dead in the water.
It then dropped again rapidly to ultimately form another reversal pattern an evening star pattern, this back and forth price action went on for the next couple of hours. Price ultimately formed a pennant and eventually broke down and ran all the way to S1. What kept me in the trade was the continuing formation of reversal patterns which indicated to me that price would eventually go down, also the fact that all this was happening below the daily open was extra evidence supporting my analysis.
Note that all these areas that I am talking about being support or resistance are just that AREAS. It is not a line in the sand, I look for price action in relation to the area and take action accordingly. Price sometimes comes up short of the area and other times pushes right through before reversing, this is where discretion comes into it and a lot of practice. practice, practice, practice.
This is something I think a lot of people don’t consider when trading, I feel they think once they have a system they are good to go but I think that implementing these things still requires a lot of practice. For example just because Tiger Woods new how to play golf did not make him the best in the world. Lots and lots of practice made him the best in the world.
This is where I use ForexTester2 as it allows me to practice and hone my skills a lot more than any demo account ever will. For example the trade I just discussed here happened over an eight hour period, with ForexTester2 I can cover a couple of years of data and thousands of trades in this time, this equates to much more experience and price action analysis. Trading is like any other skill to stay in form you need to practice your skills all the time too stay on top of your game.
Trade Well
Perry
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