As this market analysis is for educational purposes, a previous possible scenario will be discussed.
On 13.03.02019 a scenario in the AUD/USD H4 currency pair was deliberated where a possible new uptrend was in progress. Later the same day the critical resistance level at 0.70923 was indeed broken and a long position could have ensued with likely targets envisioned as well as a possible capital protection level. It is critical to know all these levels BEFORE any position is anticipated as no one knows what the market will really do. What we can know is the risk we will take and how to manage it.
After a long position was triggered, sellers quickly overwhelmed buyers and the resulting downward pressure caused a lower low to be recorded that broke the capital protection level at 0.70487. This invalidated the original possible uptrend scenario and means that the market is currently in a range. The predetermined capital protection level protected the valuable capital and is an essential part of any trading strategy.
Technical Analysis means using price charts to identify the next trend in its early stages as this is where the risk/reward ratio is the most favorable. It is critical however to protect capital as this will not happens every time. The overall goal of online trading is to produce a net profit over a series of possible positions and even reaching targets are in this sense part of risk management and protecting capital.
On 13.03.02019 a scenario in the AUD/USD H4 currency pair was deliberated where a possible new uptrend was in progress. Later the same day the critical resistance level at 0.70923 was indeed broken and a long position could have ensued with likely targets envisioned as well as a possible capital protection level. It is critical to know all these levels BEFORE any position is anticipated as no one knows what the market will really do. What we can know is the risk we will take and how to manage it.
After a long position was triggered, sellers quickly overwhelmed buyers and the resulting downward pressure caused a lower low to be recorded that broke the capital protection level at 0.70487. This invalidated the original possible uptrend scenario and means that the market is currently in a range. The predetermined capital protection level protected the valuable capital and is an essential part of any trading strategy.
Technical Analysis means using price charts to identify the next trend in its early stages as this is where the risk/reward ratio is the most favorable. It is critical however to protect capital as this will not happens every time. The overall goal of online trading is to produce a net profit over a series of possible positions and even reaching targets are in this sense part of risk management and protecting capital.