PLAY THE MARKET, THEN YOUR GUT FEEL 2/13/15

ANOTHER look at the AUD to wrap the week.


[20:43] <CM> following yday discussion on playing the 5750 the 50cb of XJO at 5750 held nice pop in mkt and options
[22:00] <CM> if you are look short AUD initial order around 77365 add at the LB with MB target (link deleted)
[22:04] <CM> XJO after hitting 52w highs mkt hits a pb to test the 50cb 5768 http://screencast.com/t/xYVF542ZJX73

PA was flat, trading inside two levels:  a breakout (BO) for the bears around 77365 and a 50CB that was resistance to the bulls.  The gut feel was a trial rum lower to fill that gap test of the LB.  We had a lower high, and flat pricing.

The larger picture, we were flat and in the middle of two extremes.  As any trader knows. the market will do what the market will do.  Trades will follow the crowd fueling the moves.

PLAY THE MARKET, THEN YOUR GUT.  AT LEAST LET THE MARKET CONFIRM YOUR GUT FEEL UNTIL YOU HAVE EVALUATED THE RISK AND TAKEN STEPS TO MITIGATED AS MUCH OF THE RISK AS POSSIBLE.

That said, reading a move ahead of the crowd can be very promising.  Put your stops in place for protection based upon your feel for what the risk is in relationship to your entry.

In this case, the BO was below Price Action (PA) and the limit entry was safe.  As PA rose to take the 50CB longs trigger.

Secondary trades trigger at the next 50CB, or new traders will use the price for their initial orders.

The bias is long and hold until another violation occurs.  This can be a break of the CB45 or another 50CB,  When a break occurs, all prior resistance levels become support (bull run/swing) and vise-verse for a bear run/swing.

If violations continue, the trade continues.  The trade will always look for a reason to exit, and a reason to reverse your bias.