Why Did it do That?

by Liam 09:09 0 comments

Firstly, I spent far too long deciding whether I should capitalise "it" and "do" in the title of this blog post. I decided not to in the end.

Anyway.

Over the past couple of years trading (wow, i've been live for nearly two years now, but that's another post entirely) i've often thought to myself, either in angst or interest; "why did it do that?"

I had this thought again yesterday and thought it might make for an interesting post.  I yearn to know why it's going up, why it's going down, why it stopped here and why it went there. I soon learnt that I can't get mixed up with these kind of thoughts. In the long run, trying to decipher each and every movement on the charts would slowly drive me insane. But sometimes, I still get caught up in wondering. As I mentioned, this happened again yesterday.

I annotated the following chart and posted it on the forum around 11:40am my time.

EUR/USD 15min

Two zones on the chart, one from Thursday coming in from the left and a new zone within this from yesterday. As the Thursday zone was weakness and the market pushed down I thought that on coming back into this zone yesterday and not really showing any signs of absorption that this was signalling another down move. I placed an order on my usual entry bar but didn't get taken into the trade. Which was fine, I stuck to the rules and didn't chase it. I still thought it was going down but I didn't get a further entry so I sat on the sidelines. There's a case for saying I did everything perfectly, so I can be happy with that.

But.

Why did it then go up?!

EUR/USD 15min

I understand we were in an up trend at the time and i'm going to go with the fact that the buying seen at the lows, (the ultra high volume, not marked) overpowered the volume and bit of selling that came in at the first highlighted orange zone. 

Interestingly we got some further high volume at the highs so this was an important zone to watch this morning, we came back into this area on high volume as you can see on the right edge and then it dropped like a stone, it's past the point I like to take an entry so that's looking like it won't be particularly fruitful at the moment as well. More about that in tomorrow's post. Let's see how the day unfolds.