Today's MARKET STATE AUSTRALIAN DOLLAR **BEAR TREND CORRECTION**
- Technically the MKT momentum is counter trend and will need a strong showing to overcome the underlying negative threat.
- On the SELL side REVERSAL strategies off the UP or near the previous session or move high will work best. DIR or DP BREAKOUT should just go. A better option is to FADE positive reactions against the DIR after a negative signal.
- On the BUY side accept FADE and BREAKOUT strategies. BREAKOUT should expect some "starts and stops" The trade is corrective and sharp positive surges can be erased in a hurry. FADE will work if the corrective state is going to continue. REVERSAL strategies are a lower probability as a break in structure should be considered a potential negative shift in momentum.
Today's PRICE MAP Performance for DA
Wrap Up
Not sold on the idea of Strategy-Based Trading? Today's trading session in the AUSTRALIAN DOLLAR futures market should silence the critics. Identifying the technical state of the market is the single most important step a successful trader must do before attempting to trade. After the unique market environment has been established, structural inflection pivots must then be identified. From here, traders can execute trading strategies that are optimal for the given market environment. Today the AUSSIE DOLLAR was in a BEAR TREND CORRECTION market state. This is a unique market environment as the market has produced a POSITIVE signal in an underlying BEAR market environment. As a result, the expectation is for a NON TREND type session. So now we have the market environment, the market structure is given to us through the Pricemap and based off of the BEAR TREND CORRECTION environment, we know which strategies we are looking to execute. The final piece? Market TACTICS. By identifying this market as a NON TREND market type, traders should look to use momentum oscillators to confirm a trading opportunity. Sure enough, right around 9:30 am CT the market bottomed at our expected level of SUPPORT (DP) and put in a BULLISH DIVERGENCE signal in the RSI. We know that a corrective rally is a possibility in this market state and where better to start that rally than off our key level of support for the session. At approx. 9:30 am CT, traders were given the BUY DP FADE opportunity with confirmation in the RSI indicator. The market instantly bounced off the DP support pivot and did not stop until it touch the upper end of the Critical Range at the UP. The UP - R "resistance band" marks the area that any "corrective action" is expected to exhaust at. Sure enough, traders were able to close their longs and reverse short the market at the UP for another profitable ride back down to the DIR. Today's trading session in the DA highlights, once again, the importance of identifying market STATE, STRUCTURE and STRATEGY. Add to this the confirmation signals from market TACTICS and the result...HIGH-PROBABILITY TRADING.
