Just wanted to share some price action insights in the name of good karma. I've highlighted three zones with boxes.
The first zone was followed by a Type 2 breakout downwards.
The second zone was followed by a type two breakout upwards.
The third zone was followed by a continuation trade setup that failed.
So I want to talk about why the first two setups succeeded and why the third setup failed. If you see the all 3 boxes, you will see a movement that was retraced 100%. 3 V formations of different sizes.
What that really means is that entire move was rejected by the market. 100% retracement.
When that happens, if you move to a higher time frame you will see a pin bar. A price rejection.
In the first two cases I've pasted an image of what the H1 & M15 candle looked like at that moment which showed that rejection clearly.
Whenever you see a full retracement of a movement. It forms a pin bar on a higher time frame. Experts call this concept, understanding the universe above. Which is why the first two type 2 breakout trades worked. because they were both followed by a pin candle on a higher time frame.
Which is also why, the seemingly perfect trade setup number 3 didn't work. The continuation trade. That entire movement within the 3rd box got retraced. Which formed a pin candle on the M5 chart from the opposition. What a pin candle really means is that sellers stepped into that zone and started selling. There was a strong seller right there as indicated by the big red candle inside the 3rd box. Which is why I didn't take that continuation trade. I'm very weary of big retracement and wicks from the opposition. Big retracements and long wicks tell me that the opposition is strong at that moment. So I wait and see how strong the opposition really is. Never buy right into the face of a strong seller and never sell right into the face of a strong buyer. Especially with binary options where timing is everything.
The concept of Billy's strategy in sum is to find a path of least resistance and catch a movement. Thats how I understand it and use it. Hope that was helpful.
Good to learn and know this. Thanks for sharing!