Good morning traders.
Yesterday was another decent day for scalping the intraday structure and was good for our model balance as we bagged a +26 result from our long off S1 zone support. See below scalp example chart. There was some good ´micro´structure to scalp off and depending on your spreads etc. you could have had a profitable day.
But the real out take from building the structure intraday and scalping from it as it unfolds is that you get excellent practice at reading the tape. This is the basis of successful trading along with basic S & R understanding.
We don´t have to predict market movement we simply follow it up or down using the ´micro ´structure it builds along the way. Doing this improves your knowledge of the instrument at a detailed level, makes you think on your feet (although you don´t have to be frenetic ), gets you really engaged with price action and builds confidence.
I know this sounds easy when in fact it takes quite some understanding and experience but the act of being involved is the only way around it. My advice if you´re at your screen full time, don´t wait around all day for higher time frame levels to be triggered while you are waiting, dive in and engage with what you see.
Use small sizing or demo but its a great way to build knowledge and technique. I am also not suggesting that you become a scalper. The two techniques can easily be executed in tandem and should be complementary to each other. The structure on the 5m is much the same as the structure on the 1h and 4h and above.
Price action is fractal. Al you are doing is granulating down to a lower level and doing what you would do on the higher time frames. Anyway that´s enough of that – I´ll get off the soap box. Here endeth this mornings lesson :).
For today we have final US GDP data out this afternoon at 1.130 CET and German state and national CPI´s coming our during the course of the morning.
The eurusd looks to be basing at the S1 zone support at 1.1250 as I write this morning so look to this level again to try a long as your first scalp maybe.
Don´t forget also that we have quarter end this week so there could be a bit of re-balancing going on as portfolio managers look to reset there asset allocations for the upcoming 3 months. This could lead to some movement either way depending on whether their USD vs Euro holdings are out of line with their preferred percentage allocations (as this relates to their asset purchases and the currency they need for so doing).
The 240m chart
For a change I thought we would take a look at the 4h chart this morning. You can see that the 1.1250 level is providing support with 4 wicks now into this level. This suggest to me a push up is on the cards so I´ll be looking long as a bias as we kick off the day. This could change and as day traders we need to be flexible at all time. Follow the structure and flow as we get going to give you a better steer as above.
The Hour Chart
Levels as per.
They are the same as yesterday. Watch for the 1.1280 level again as this provided the top for yesterday. Watch also for pushes in either direction if we do get some volatility as S can become R and vice versa.
Have a good one :).