All posts tagged Pre-emptive reversal

Fib Matrix Forex Scalping Strategies | 2016-07-19 GBPUSD +8

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GBPUSD +8 2016-07-19 | 1 min Preemptive

This is a 1 min preemptive reversal trade on cable. The move down was sharp as can be seen by the spread out nature of the GBPUSd Fib Matrix. However the move has bottomed out, and although the 1 min boxes have yet to cross there is support on the 1 min, 5 min and 60 min timeframes. The trade worked out nicely for +8 pips with price retracing to the white zone.

For more details about using forex price action to scalp using the Fib Matrix TimeLanes trading software, here

Previous recording Fib Matrix Forex Strategies | 2016-07-15 USDJPY +6

GBPUSD +6 2016-06-14 | Preemptive Reversal

This GBPUSD trade is an example of 1 min preemptive reversal. Here after a sharp move up the 1 min L1 and L2 have crossed over on the 1 min timeframe and the white zone has shrunk. In addition the 5 min boxes are more than 20 pips away meaning there is good scope for a retracement down. The condition of the white zone is important in than if it expands it tends to push price away while when it contracts price is drawn to it.
You can find more details about using forex price action to scalp using the Fib Matrix TimeLanes trading software, here

Previous recording Forex Scalping Strategies | 2016-06-14 USDJPY +7

GBPUSD +8 2016-05-20 | 1 min Pre-Emptive Reversal

This trade is a 1 min pre-emptive reversal. There has been a move up on cable but has retraced. This is the second push up but the S1 and S2 boxes have crossed on the 1 min indicating that short term momentum has changed. Cable is therefore shorted bringing in +6 on the first half and +10 on the second giving a net +8 pips.

You can get further help regarding trading forex price action scalping, with the forex Fib Matrix trading software, can be found here

Previous recording Forex Price Action | 2016-05-19 GBPJPY +8

GBPUSD +7 pips 2016-04-07 | Preemptive Reversal

This cable trade was an aggressive preemptive reversal trade on the 1 min tim frame off the S3. The rationale behind the trade is that after a move down the S1 has crossed back over the S2 and S3 and that the momentum has turned around. There is risk in this trade as we are relying entirely on the 1 min time frame, Initially, the trade went against Kash, but a careful add lower down saw him able to recover at -2 +9 (net +7).

You can find out more about the TimeLanes forexx trading software click here, learn how it can help you develop effective and profitable forex price action strategies.

How You Use the Tiger Time Lanes band shades to create effective forex strategies

There are a number of setups that are derived from the Tiger Time Lanes  band shade formation and the white zone phases. Here we will look at the three most common.

Revision To The Mean Trade – Orange To White:

As we all know price doesn’t move in straight lines. It either moves within a range or it trends in either a long or short direction. But eve when it trends it tends (unless there is some major news event) to do so in a zig zag fashion, moving to a new high / low, then retracing back before continuing its trend and establishing another new high / low.

Why does this happen? Well as mentioned earlier, price is determined by the volume of buy and sell orders. Many traders place orders in the market at various points or levels that they think are important* so when price reaches these areas price can stall or reverse (depending on the number / size of orders). As price retraces or when it has retraced to a certain level, those traders who have been caught with positions on the wrong side of the move, often liquidate their positions, creating second / third wave of buying or selling momentum, pushing price to further highs / lows .

The Tiger Time Lanes grids are so good because the demarcation of the band shades predict, with stunning effectiveness, where these changes of direction will take place.

The most common trade is the Orange to White. It happens on the initial breakout or subsequent secondary move of price. The further the way price is from the white zone and the I minute L1 discs the greater the chance of reversal. The best way to think of it is as if price were attached to a piece of elastic, the further the stretch the more likelihood of it to come back unless the elastic breaks, which would then signify a significant breakout

*It you want to know why they cluster in specific areas you need to understand the concept of collective psychology to know why they cluster in specific areas.

The White Zone Trade:

As emphasized in the explanation of Orange To White trades, price reverses. But at what point does price stop reversing and the second / third wave start? Again the band shades are invaluable because what was once support often becomes resistance and vice versa. The most powerful level of all is the edge of the white zone. For scalping, the edge of the 1 minute is particularly important. As price breaks out and then retraces back to the white zone this has the effect of pushing price way again. Think of an analogy of refueling. The below video demonstrates this effect in action:

For it to be most effective it usually requires a new session high or low to have been made and that it is the first time that price has come back to the white zone from its break out. Think of a ball bouncing on the ground, the higher it is thrown the bigger the likely bounce.

Pre-emptive Reversal Trade:

This trade looks for clues of an ending of the move and a possible more substantial reversal. As pointed out above the white zone goes through a number of phase as it recalculates. More often than not when the white zone collapses, that is a signal that price, at this moment has finally stalled for the time being and that a possible retracement could happen. There are of course several courses of action that you could take. If you are out of the market you could consider this the moment to enter it against the trend. Alternatively, if you are trading with the trend you could take the opportunity to close your trade or to lighten you position (take some profit) obviously, this would be dependent upon your risk reward and your trading plan.

 
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