The TIME@mode structure of the decline in the EURUSD has put the market in a tight spot here sitting right on support.
Why is it support? The current price is where the most volume has traded over the past few months, so it is the "resting place" where collectively the market is viewed as "balanced" and "fairly valued".
Why is it a low risk buy? The market was distributed and poised to go substantially lower just over a week ago and instead of collapsing it reversed and rallied to squeeze out the weak shorts, but now it has returned to the level where the sellers were in control before. So, we can buy with a close stop because this is the point where the sellers failed last time, which means there are likely buyers lurking here waiting for the opportunity to drive the price back up.
Notice the logic of the decline and how orderly it was using the TIME@mode logic: See how a mode set-up, a range expansion occured (Yellow Triangle) out of the mode and a decline happened right on schedule. When a mode forms lower in a downtrend that is larger than the previous one, it implies strongly building strength of the trend and more confidence in the trend's continuation. In other words, it builds more time and usually price into the trend.
Keep in mind that the market is waiting for news out of Brexit talks.
@timwest, Thanks, I was lucky and spotted the bearish divergence on daily rsi. Made me book profits. Now sideline waiting to find entry again. Overall I am bullish on EUR medium term.
csarmendariz
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Hi, just started trading recently, but loving what I have learned about your view on trends so far, my biggest struggle so far is to understand the effects and implications of trends within trends...
Could I ask why you are counting only 9d in that mode?
Are the bars before not included because the trend hadn't started yet?
And where is the 6d count coming from?
Thanks a lot
timwest
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@csarmendariz, I count only the days that are touching the mode (the black line).
DeanT
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Thanks Tim
shobz99
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huge text on chart. nothing to see much
timwest
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@shobz99, Here's a bigger version of the chart for you