Price is looking to make a potential first test of a major resistance level on the daily price action chart in the platinum market as I write this for you. Over the last few four hour sessions price has been rocketing higher with strong bullish candles that have closed clearly bullish up towards the high of their candles indicating strength.
If price can continue the climb and push higher, then it will move into the major daily resistance level that is also a Very Big Round Number = VBRN of 900.00. VBRN’s are major psychological levels that can often act as support or resistance levels by themselves.
The reason they can often be so powerful is because so many people and so many market participants place their orders in and around these major levels and the bigger the levels the more conscious everybody becomes of them and the more they tend to place their orders around them.
For example; if the number is just a round number like for example; 122.100 then not too many traders are going to be concerned with it, however if we have the GBPUSD and price is at the 1.6000, then a lot more traders are going to notice and start placing their trades around that number. They may not place their order right on top of it, but they may put their trade at 1.6001 etc and this creates an effect where price starts to respect this level.
That is definitely something we have to be mindful of here because not only do we have price moving into a major resistance level, but also a VBRN. The other thing that is super important is that this is the first major re-test of the daily level since price broke lower and through the support level.
Why is that so important? Because the first re-test of a level is often the best time to hunt for trades. I go into this and how you can look for really high probability trade setups and also how you can implement a high probability trade strategy into your method in this lesson here; Using the First Test of Support or Resistance Price Action Strategy
As the 4 hour chart shows below; this level has been tested on multiple occasions. Make sure that if you are going to look for short trades you look for confirmation with a high probability A+ trigger signal like the ones taught in the Forex School Online price action course.
After posting about these types of markets I often get emailed about what broker I use and how traders can also trade these types of markets. To open a free demo account that is the correct New York close 5 day charts and has all the Forex pairs you need as well as markets like Oil, Gas, Gold, Silver, Major Stock Indices and others, then check out this post on The Recommended Broker & Charts For Price Action Traders.
Daily Chart – Daily Resistance & VBRN
4 Hour Chart – Will Price Re-test?
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