Trading with convergence to increase your probability
Taking a look at the price action on EURJPY currently, we have seen a potential selling opportunity setup.
Why we like this setup is because it holds a few factors that all converge together. As traders the higher the amount of information we have to help make an informed decision the better.
As you can see from the 15 Minute chart, we firstly have price move quite rapidly higher until it starts to run out of steam and show signs of price exhaustion, we can also see this through the creation of a bearish 3 drive pattern at the highs. This pattern is a good indicator for potential reversal when used in the right context.
What increases the probability on this particular setup is that this exhaustion also occurs at the 126.00 big figure as this level could also hold larger pockets of order flow and help price to reject lower.
As traders we don't know exactly how far price can move but what we can do is locate areas or levels on a chart that could cause a possible bounce or rejection in our favor. It's in these moves that we can look to potentially manage a trade profitably in the process.
Why we like this setup is because it holds a few factors that all converge together. As traders the higher the amount of information we have to help make an informed decision the better.
As you can see from the 15 Minute chart, we firstly have price move quite rapidly higher until it starts to run out of steam and show signs of price exhaustion, we can also see this through the creation of a bearish 3 drive pattern at the highs. This pattern is a good indicator for potential reversal when used in the right context.
What increases the probability on this particular setup is that this exhaustion also occurs at the 126.00 big figure as this level could also hold larger pockets of order flow and help price to reject lower.
As traders we don't know exactly how far price can move but what we can do is locate areas or levels on a chart that could cause a possible bounce or rejection in our favor. It's in these moves that we can look to potentially manage a trade profitably in the process.