Practically every trading system/method/approach i've seen, read or heard about is based on finding a Reason for Entry.
Its a trend line or s/r level, its a moving average or a momentum indicator, its a harmonic step or a fibo or a fibo confluence, its mercury crossing venus, its even an airplane in the night sky like a shooting star (save your wishes for later).
So when the Reason presents itself, we take entry, wait and hope.
The trade has a profit target or exit rule. A trend line, a s/r, a moving average, a fibo extention, a box projection, a bollinger band, a heck that'll do i'll grab it now etc.
But does the trade (price) have a Reason why it must reach that exit price level? Are there points on a chart that act as Price Attraction Points?
(This is why you hold your breath after you pull the trigger.)
If there are, and if we could recognise those, this approach would turn trading on its head. Why? Because you would trade based on a Reason for Exit, rather then a Reason for Entry.
I have an awkward habit of over complicating the elementary, so by way of example consider the following:
If you knew that the euro would reach 1.60, rather it must reach 1.60, you would buy and wait. You would not panic if the position was against you for a while (time aside), because the price must go to 1.60. You would not panic if the position was against you several hundred pips (leverage aside) because the price must go to 1.60.
That is to say you would take a trade based on having determined an exit price, as opposed to an entry price.
An example of this approach is gap trading where the assumption is that a price gap will be filled and so the level is targetted til it is.
But i wanted to ask about price action. Are there market structures, wave structures or candle stick patterns that attract price? (Such that you will always witness price returning to those levels.)
I have some thoughts/observations, but am keen to hear your input and see your examples.
(If you want to discuss this offline. Just send me an email or ping my skype.)
Its a trend line or s/r level, its a moving average or a momentum indicator, its a harmonic step or a fibo or a fibo confluence, its mercury crossing venus, its even an airplane in the night sky like a shooting star (save your wishes for later).
So when the Reason presents itself, we take entry, wait and hope.
The trade has a profit target or exit rule. A trend line, a s/r, a moving average, a fibo extention, a box projection, a bollinger band, a heck that'll do i'll grab it now etc.
But does the trade (price) have a Reason why it must reach that exit price level? Are there points on a chart that act as Price Attraction Points?
(This is why you hold your breath after you pull the trigger.)
If there are, and if we could recognise those, this approach would turn trading on its head. Why? Because you would trade based on a Reason for Exit, rather then a Reason for Entry.
I have an awkward habit of over complicating the elementary, so by way of example consider the following:
If you knew that the euro would reach 1.60, rather it must reach 1.60, you would buy and wait. You would not panic if the position was against you for a while (time aside), because the price must go to 1.60. You would not panic if the position was against you several hundred pips (leverage aside) because the price must go to 1.60.
That is to say you would take a trade based on having determined an exit price, as opposed to an entry price.
An example of this approach is gap trading where the assumption is that a price gap will be filled and so the level is targetted til it is.
But i wanted to ask about price action. Are there market structures, wave structures or candle stick patterns that attract price? (Such that you will always witness price returning to those levels.)
I have some thoughts/observations, but am keen to hear your input and see your examples.
(If you want to discuss this offline. Just send me an email or ping my skype.)