Get started

Retracementlevels

UPDATE Retracement Levels Script: Finding Support and ResistanceI have updated my Retracements Level script to alert traders to long term Support and Resistance levels based on 50% Fibonacci levels. I think that this is a simple and highly valuable tool that every trader should have in their toolbox to identify key levels that price may respect. In this video I go over the many uses: -Long term levels for Entering and Exiting positions -Multiple Timeframe Analysis -Catching Catalyst events like Earnings -Projecting Support and Resistance far into the future
BITFINEX:BTCUSDEducation
by norok
9
The "OOPS Pattern"The “OOPS pattern” was developed by trader and author Larry Williams. It was named, according to Williams, for the all too common experience among traders when a broker would call his clients to report that a position was stopped out and say, “Oops, we lost.” This was due to the market gapping from one trading day to the next due to an overreaction from some sort of news or earnings announcement. When there is this type of overreaction, there is a reasonable probability of a move back to satisfy the OOPS. The system is programmed to create more profits than losses. When the market opens lower than the previous day’s low, a trader can place a buy-stop order at the previous day’s low price. When the market opens higher than the previous day’s high, a sell-stop order can be placed at the previous day’s high. Most traders recognize that gaps from one day’s close to the next day’s open occur for any number of reasons: news, rumor, earnings, etc. However, the move often exaggerates the impact of news. You see this all the time with earnings surprises. A big gap in the price (upward for positive surprises, downward for negative) is next offset with a move back to the previous trading level. This reversal is described as “ satisfying the OOPS pattern ”. Approximately 93% of the time, price will reverse to close the gap and satisfy the OOPS pattern. For example, the chart for NASDAQ:AMZN demonstrates how earnings surprises can create an OOPS pattern, followed by retracement. The circled sections reflect price behavior after earnings surprises. In end January, a positive report led to a large price gap moving about 180 points higher. The price also moved from trading at the lower Bollinger Band to moving above the upper Bollinger Band. It continued walking along the Bollinger Band resistance until moving lower and retracing back to satisfy the gap in price, the OOPS pattern. The second example was just as dramatic, but less obvious. Upon a negative earnings report being published, price fell about 130 points. But it recovered quickly, recovering all of the lost ground in about two weeks. The OOPS pattern is one form of retracement timing, allowing a swing trader to exploit market behavior. This also points to the maximum timing for leverage through opening of options trades. At such moments, single long calls or puts are likely to perform better than elsewhere on the chart. Short options may also be used as long as the price move is dramatic enough, and confirmed by other signals, to raise confidence as high as possible. To hedge risks, traders may also exploit the OOPS pattern with vertical spreads, synthetic stock positions, or collars.
Editors' picks
NASDAQ:AMZNEducation
by NewCycleTrading
16
Impulse and retracement, the danger of the one trend approachOANDA:GBPJPY 3 days ago I published my Bearish target for GBP that was reached yesterday @141 level. it is critical in a trading plan to anticipate retracement. Retracement is a necessary step to initiate a new impulse but what I would like to simply illustrate is why retracement can be so brutal and potentially very damaging by nature. On that 120 minutes chart we can see the downtrend impulse created by the bearish signal when the pair crossed below the 143 level. It was my expected signal to enter new Short positions. A Central Bank rate decision is a key Forex event. Given the Brexit context, many investors were anticipating yesterday a drop and that context has created a new down leg to that initial impulse to reach my defined target. That target area is a very dangerous place to trade for the following reasons: As many investors are willing to participate to the downtrend they place Short orders but because it's a very important event usually with conservative stop loss. All these orders placed very far from the beginning of the last impulse from around 142.50 have created a HUGE BUY volume opportunity! All things being equal Short orders are Long for the counterpart. Any retracement in that context can be initiated by the available volume in the first place. Then when the retracement starts many investors can change their mind and reverse their positions. It is fueling the strength of the retracement and by hitting Sellers stop loss the retracement is amplified and exaggerated by High-Frequency Trading. Finally, the retracement of the pair was so boosted that is has reached above the day high As a conclusion investor shall be very cautious when they join lately a market impulse and it is as well perillous to trade against the retracement trend as it can conversely just add power to it. In other words, investors are trading against their positions.
Education
by parisseine