MORE AUD 11/21/14

BOT levels set, the AUD-USD began to work for our delectation.  Price followed the TL as it ran the range for a LBBO. (long BOT breakout).  While longs were taken (that is what the model was screaming!) traders need a reason (and location) to  to look for an area to short.  These locations will always reflect the trading risk, and the trader's risk.  The trading risk is related to the price entry point and the likelihood of a failure creating a loss.  Trader's risk is the behavior bias of the trader, i.e. aggressive or conservative.

[20:48] <CM> conservative short waits for the 86300-325 area

[20:49] <CM> aggressive  a reversal of the LBBO  (long break out)

So, how do we set up the trade off the model?

[20:53] <CM> philosophy  see a trade on longer term chart, use a shorter time frame to get a better enter.  pref a 2-3 bar tl break on lesser.  so you see trade, switch lower to see a pull back, buy the tl break of that pb.

have a model, trade it.  Now that you are in, what is your exit?  Always have an entry plan and a plan to exit.

[20:55] <CM> 86535 was a prior level  and considered the target
[20:56] <CM> that said, not going to be stupid if/when it fails..  last time I checked, profit was never bad...
[20:59] <CM> 523 target 1  535 max run est

We had a plan and price was working to make everyone happy.  I think price ran to 517, which brings up another point: never try to hold for tops/bottoms

[21:06] <CM> 86500 exit

charts to follow:

[21:16] <CM> 2m pb  new buyers
21:20] <CM> aud 5m  some topping  long above 45tl  higher risk short below  better at lower level  (chart link removed)
[21:21] <CM> the lower because it would be a break back into the range and a 50cb break short
21:25] <CM> now we can see the aggressive short and long exit.  tl inside the 45  5m chart

and we see the sell working,,,

And price continued to follow the script.  Price holding at TL's, price breaking TL's, price playing with our model levels.  Overall, a nice day, a nice week.