- At the time of entry the background turned to strong. It means that imbalance of supply and demand is now in favor of demand.
- Very strong signal (Major Demand) before the trend changed its direction.
- Dynamic trend turned from red to green.
- Entry – when the background turned to strong and the price didn’t move too far from the dynamic trend.
- Exit after weak signal (Supply) appeared in the chart.
GBP/USD Total: +145 Pips
In the chart we see that mid-term resistance (previous high) was crossed by wide spread up-bar on high volume.
Resistance – this is a level of previous high, many traders bought near the highs and were locked-in when the price suddenly fell. They are now holding out in the hope of reducing their losses. Locked-in traders want only one thing – to get out of the market at a similar price to the one they first started with. Professional traders that are still bullish know this. To encourage these old locked-in traders not to sell, professional traders will mark-up, or gap up the market, through these potential resistance areas as quickly as possible.