In the previous GBP/USD analysis I noticed that the price was approaching Long Period Support and wrote that it is possible that the price starts reaction to the downward trend. Later I saw in the chart strong signal (Minor Demand). There was no high volume bar (effort) which was necessary to pass the support and it was clear that now we should expect prices to go up. It does not mean that this is a good point to go long, because background is still weak. But this would be wise to close short positions in this point.
The price was moving up, but the background was still weak. Therefore I waited supply or no-demand signal (better if it was near resistance) to open a short trade.
I found a good setup in M15 Timeframe:
- The background is very weak.
- Price is approaching Long Period Resistance.
- Here we can see at once several weak signals (supply), price is near the resistance.
- Dynamic trend turned from green to red, entry in up-bar. Stop loss above the resistance, later moved to break-even.
- Strong signal (Minor Demand): in VSA this is a shake-out – wide spread bar on high volume (weak holders are still selling, but strong holders already have bullish view in the market – that’s why high volume and bar closes on the high).
- Exit: Total 67 Pips.