How do we go about when there is a Secondary setup prior to a news
announcement and when the news comes out the price breaks the trendline. Can we get
involve. The answer is yes but only on a 1min chart with the stoploss determined by the
Lets assume that the channel I have marked is prior to a news announcement. Normally the price goes into a tight range just before an important news announcement. That channel on the 15min produces a Secondary level possible move. We still determine our Projected move and that will be the area we will look to take profit. When the price reacts after the news we will be looking at the 1min chart for a pullback and a move past the pullback high and that will be our entry with our stoploss a couple of pips below the low of the pullback. We will then monitor the trade and go to breakeven as soon as the price starts to move into positive territory. The main aim with the go to breakeven is to combat that false breakout where the price runs and then all of a sudden turns around. Our worst case scenario will be to close the trade when it retrace back into the channel or setup. As you can see the risk was about 12pips and the reward 25pips. On Friday the 11th of Dec we had the following news reports.
Prior to that we had a 1hour Secondary level setup. The preparation was the
normal. Projected move was determine as well as max stoploss and profit target and then
the 15min Tertiary level to see if we can get a better stoploss.
When the price break to the top we enter because the higher lows the price made prior to breakout made us anticipated that the price motion was supporting the news that is about to come out. We also got a better stoploss that made the risk:reward better. The price ran to almost the 161%Fib extension and then turned around and really accelerate down. When the price penetrated the Secondary setup we closed for a loss of 20pips. When the price kept on moving down we anticipated that the extend of the news most probably got known before the anouncment that is why the price made a quick
turnaround like that. Because we had our Projected move also marked to the downside we know what to expect. We changed to a 1min timeframe to get an entry on the 1min should the price goes beyond the bottom trendline.
The price broke the bottom trendline then pulled back to the breakout level and when it went down again past the low of the pullback we entered with a 30pip stoploss. The news came out 3min later and confirm the situation of better results then anticipated so we know a run was on the table. We stayed in the trade till the Projected move was reached. We closed after some consolidation. We also must remember the 30pip loss so we had to close for some profit at least. This is a classic example of a false breakout to the top. Another question that must be asked now is. Why will they go all the way to create a false breakout to the top. Remember the Tsunami setup on the beach. Everything on that Secondary level setup looked perfect for a long trade. And then the Tsunami strike. A lot of people as well as we were hit with a loss. But because we had an overall view of the market right in front of us and we have the knowledge of the mafia we were able to spot the turnaround move and run with them. They were accumulating during that Secondary level setup and created a false break to draw some long orders which they know will be picked up much cheaper when the market goes the other way when their stoplosses is hit. If they have gone through all the way as to create a false breakout they surely wants to make some money. That tells me we have not seen the end of this move downwards yet. I want to show you the volumes involved in this whole process we just went through.
The above picture tells an interesting story. Look at the normal daily volume at
first and then the volume become less during the London session until the price broke out
of the Setup. The volume should pick up after the breakout but it even slowed down. That
already tells a story. Are there really some heavy buyers. I don’t think so. That is why we
closed out when the priced pulled back into the Setup. Based on the hindsight volume
analysis we should have closed at breakeven at worst but that is always easy afterwards.
Then the price dropped before the news announcement with heavy volume. The panic
was created and a lot of long positions was picked up when their stoplosses was hit. That
was confirmation of the very strong possibility of an opposite move that was coming. The
result of the coming news will show if the move is in the direction supporting the news.
Indeed it end up to be better news then expected and the direction was to the short side.
Here is another story. It took place about a week before the one we just had a look
at. Why are the volumes much more when the channel top is reached then the volumes
on the channel bottom. If the uptrend is to continue I surely would like to buy at the
bottom of the channel. Why aren’t there a lot of buyers at the channel bottom. Why are
there not a lot of balls handed out at the bottom of the channel. Because the top of the
channel is a better price to hand them out. On the last channel top the volumes was
extremely high. A lot of balls were handed out here. The price also made a higher high
indicating a possible continuation of the uptrend creating a sunny day on the beach just
before the Tsunami struck. Who was willing to sell such high volumes at that level. I am
only asking. Then the drop was quick and all the stops was picked and the balls collected
again for quite a huge down run and money in the bank. They picked up the balls they
handed out at the top of the channel. The above is only my opinion. That is how I
monitor the moves of who they are. I follow volume at certain places to see if I can spot
an exchange of positions and to see if I can spot there moves. If you study this pattern
you will get to the point where you can spot a change in behavior and then position
yourself to be ready to partake with them in the move.
You remember this picture. This is how they do it on the stock markets. In the
down phase they don’t want to be in the market so they get rid of their cookie when the
market is around its top and collect it again when the market is around its bottom. But in
the Forex market where you can go long and short they want to be in the down run as
well. The above scenario we just looked at is how they do it. At the top they hand out
their cookies and when the drop comes they collect the cookie again with short positions.
And then around the bottom they get rid of it leaving the sucker with short positions and
when the sudden recovery starts they collect it again after stoplosses is hit. This is an ever going on cycle over and over again. Doing the same thing over and over.Look at this for getting rid of their cookie and collecting it again when the market turns
around. This was with the credit crunch episode. Big institutions went under with this
One last example.
READ MORE - News Trading
announcement and when the news comes out the price breaks the trendline. Can we get
involve. The answer is yes but only on a 1min chart with the stoploss determined by the
closest low within the setup. Lets look at an example.
normal. Projected move was determine as well as max stoploss and profit target and then
the 15min Tertiary level to see if we can get a better stoploss.
turnaround like that. Because we had our Projected move also marked to the downside we know what to expect. We changed to a 1min timeframe to get an entry on the 1min should the price goes beyond the bottom trendline.
The price broke the bottom trendline then pulled back to the breakout level and when it went down again past the low of the pullback we entered with a 30pip stoploss. The news came out 3min later and confirm the situation of better results then anticipated so we know a run was on the table. We stayed in the trade till the Projected move was reached. We closed after some consolidation. We also must remember the 30pip loss so we had to close for some profit at least. This is a classic example of a false breakout to the top. Another question that must be asked now is. Why will they go all the way to create a false breakout to the top. Remember the Tsunami setup on the beach. Everything on that Secondary level setup looked perfect for a long trade. And then the Tsunami strike. A lot of people as well as we were hit with a loss. But because we had an overall view of the market right in front of us and we have the knowledge of the mafia we were able to spot the turnaround move and run with them. They were accumulating during that Secondary level setup and created a false break to draw some long orders which they know will be picked up much cheaper when the market goes the other way when their stoplosses is hit. If they have gone through all the way as to create a false breakout they surely wants to make some money. That tells me we have not seen the end of this move downwards yet. I want to show you the volumes involved in this whole process we just went through.
first and then the volume become less during the London session until the price broke out
of the Setup. The volume should pick up after the breakout but it even slowed down. That
already tells a story. Are there really some heavy buyers. I don’t think so. That is why we
closed out when the priced pulled back into the Setup. Based on the hindsight volume
analysis we should have closed at breakeven at worst but that is always easy afterwards.
Then the price dropped before the news announcement with heavy volume. The panic
was created and a lot of long positions was picked up when their stoplosses was hit. That
was confirmation of the very strong possibility of an opposite move that was coming. The
result of the coming news will show if the move is in the direction supporting the news.
Here is another story. It took place about a week before the one we just had a look
at. Why are the volumes much more when the channel top is reached then the volumes
on the channel bottom. If the uptrend is to continue I surely would like to buy at the
bottom of the channel. Why aren’t there a lot of buyers at the channel bottom. Why are
there not a lot of balls handed out at the bottom of the channel. Because the top of the
channel is a better price to hand them out. On the last channel top the volumes was
extremely high. A lot of balls were handed out here. The price also made a higher high
indicating a possible continuation of the uptrend creating a sunny day on the beach just
before the Tsunami struck. Who was willing to sell such high volumes at that level. I am
only asking. Then the drop was quick and all the stops was picked and the balls collected
again for quite a huge down run and money in the bank. They picked up the balls they
handed out at the top of the channel. The above is only my opinion. That is how I
monitor the moves of who they are. I follow volume at certain places to see if I can spot
an exchange of positions and to see if I can spot there moves. If you study this pattern
you will get to the point where you can spot a change in behavior and then position
yourself to be ready to partake with them in the move.
You remember this picture. This is how they do it on the stock markets. In the
down phase they don’t want to be in the market so they get rid of their cookie when the
market is around its top and collect it again when the market is around its bottom. But in
the Forex market where you can go long and short they want to be in the down run as
well. The above scenario we just looked at is how they do it. At the top they hand out
their cookies and when the drop comes they collect the cookie again with short positions.
And then around the bottom they get rid of it leaving the sucker with short positions and
around. This was with the credit crunch episode. Big institutions went under with this
whole process. It is not only we as small guys that got hit but there are mafia bigger then banks.
One last example.
Look at the volume increase after we had a long up run on steady volume. That should tell a story to anyone involved in the markets. The cookie was handed over. Are we going to see a down move to the 1.35 again. Only time will tell. As you have seen volumes can play a major role to determine possible direction changes. It normally takes time for them to get rid of their cookies but if we can spot that
we can prepare a plan to be in the move.
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