Price has made a huge move lower over the last week in this market with price breaking two really major support levels as the daily chart shows below. On Tuesday, I made my daily Forex market commentary in this section, and I also discussed this market where I spoke about the particular strategies you could look to trade this market with, and that is what I am going to do today, as well as look at how the market has behaved over the last two days.
You can get that post from Tuesday where I discuss those price action strategies and lessons at Potential Short Trades With Momentum Lower on Palladium | 4th Nov 2015. The main thing I discuss in that post is how traders can use the first test of support or resistance as a super high probability trade setup strategy. That is a really high probability trade setup and actually one of my favorites because the price action order flow is often at it’s highest when price is making it’s first test of the major level.
If you take a look at the 4 hour chart I have below, you will note that there is a chance that you could potentially, once again, look to hunt for this first test strategy all over again in this market. That’s the awesome thing about this strategy. If you know exactly what you are looking for, then you can find it in many markets and time frames, time and time again. You will also note that it is trading with a ton of momentum just like the daily charts show.
There are many price action strategies you can trade with. The best way to start stacking the odds in your favor right from the get go is to trade with the trend in your favor. Inside bars can be super tricky.I discuss these and how they are more of an indicator or price action clue rather than a price action trigger signal, but check out how the price action on the 4 hour chart is making the pattern that forms time and time and time again that you will be able to find on all charts; “Consolidation and continuation”.
Price pauses and this is where price forms the inside bars or moves sideways, then price breaks out and continues with the trend. Price does it all over again by moving into the consolidation and continuation…
Daily Chart – Next Support Level?
4 Hour Chart – Inside bars
4 Hour Chart – Re-test?
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