20210607 Trade Review GBPNZD

Play: Mean Rever­sion Failed Auction

#fin­twit #order­flow #day­trad­ing #trad­in­gre­view #price­ac­tion #chartre­view #GBPNZD

Mar­ket Narrative

There was a large imbal­ance at the open (1.37xASR) below val­ue, out­side range. Price reached a D1 VWAP in UT lev­el. H4 had made a pri­or DBD. Price extend­ed low­er in D before form­ing a Bull­ish Inside bar in E TPO clos­ing slight­ly with­in IB. There was an old H4 demand nearby.

How was the Entry?

The entry was off a M15 con­sol­i­da­tion after the M30 Bull­ish Inside Bar in E. This was okay. A lit­tle lat­er this tran­si­tioned into a pos­si­ble base on M30 with longer buy­ing wick and H1 Bull Engulf above H1 demand. 

Price start­ed fad­ing the auc­tion deep­er into IB test­ing a ledge in D left behind on the open TPO dur­ing G and print­ed one TPO above it now chang­ing the DPOC into where the ledge was. 

Price then pulled back down clos­ing as a bear engulf but not tak­ing out the weak buy­ing tail in E. 

EDIT: due to the ledge hav­ing been cre­at­ed with­in IB it is not of much sig­nif­i­cance. Sum­mer time can also cre­ate some struc­ture build­ing around IB edges. 

Ledge

How was the SL place­ment and sizing?

SL place­ment was good as it was the stan­dard size minus the spread placed below the for­ma­tion (and low)

How was the prof­it target?

IB high was 2R but the LTF demand at IB high would have yield­ed 1.5R

How was the Exit?

Exit was not good. Even though there was a M30 Bear Engulf against my posi­tion it did not mak­ing a LL or even take out the weak buy­ing tail in E and thus indi­cat­ing more con­sol­i­da­tion going on. Down ‑0.6R.

What would a price action-based exit have done for the trade?

1R (man­u­al close due to cap­i­tal preser­va­tion and late in the session)

What would a time-based exit have done for the trade?

0.5R, 1.5R in over­lap noise to close at 0.8R.

What did I do well?

I did well to take the trade as I am try­ing to take more trades. 

What could I have done better?

I could have rec­og­nized the M30 bear engulf as a con­sol­i­da­tion rather than a direc­tion­al move as price had not made a LL or tak­en out the weak buy­ing tail 

Obser­va­tions

If price has con­sol­i­dat­ed a break needs to hap­pen from its range (tak­ing out high or low). In sum­mer time can have a lot more slow­er auc­tions that build struc­ture right at IB edges before final­ly mov­ing away. 

Large imbal­ance at the open with­in a pri­or H4 DBD could be cause for the cre­ation for anoth­er H4 Base being devel­oped. In this case through a Failed Auc­tion at 2nd DTTZ.

Missed Oppor­tu­ni­ty

N.A.

TAGS: D1 VWAP in UT, Devel­op­ing H4 Base, Trend is Up 3/3, Below Val­ue, Out­side Range, Large Imbal­ance, Ledge,

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