Premarket Prep GBPNZD 20210602

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This is my pre­mar­ket prep for today’s Euro­pean ses­sion for the Forex pair GBPNZD. This prep builds off of my week­ly trade plan I made here:

GBPNZD Week 22 Trad­ing Plan

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The pur­pose of a pre­mar­ket prep is to find setups with­in my week­ly trade plan bias

Week­ly Focus Points

• Min. 3 times work­ing out at home + manda­to­ry cardio
• Trad­ing rules
  • Focus on tak­ing ONE trade a day. If I missed the first DTTZ then a trade needs to be tak­en on the 2nd DTTZ unless there is a high/medium ini­tia­tive activ­i­ty day.
  • Only price-action based exit rules (or if hit time stop comes earlier)
  • M15/M30 entries and exits at 1st DTTZ, M5 entries and exits at 2nd DTTZ
  • Buffer trades (prof­it tar­get >1R) are allowed and encouraged
  • 13 trades by the end of the month
• No social media / mes­sen­ger apps / phone calls allowed dur­ing the trad­ing window

Com­pared against Week­ly Trad­ing Plan

• Price trad­ing below last week’s body and with­in range of buy­ing wick

Non-con­jec­ture obser­va­tions of the market

• Price action
  • D1 trad­ed down with slight­ly longer buy­ing wick react­ing off D1-C‑D 1.94889 and test­ed D1-C‑S 1.95621
  • H4 react­ing off H4 QLo before form­ing a DBD
• Trend: H4 Up, D1 Up, W1 Up
  • Pre­vail­ing trend: Trend is UP
• Mar­ket Profile
  • 2‑day over­lap­ping values
• Dai­ly Range
  • ADR: 1206
  • ASR: 846
    • 22
  • Day
    • Yes­ter­day’s High 1.95715
    • Yes­ter­day’s Low 1.94306

Sen­ti­ment

• Loca­tions
  • H4-C‑D 1.95094 inside val­ue at VAL
  • D1-C‑D 1.94889 below val­ue out­side range
• Sen­ti­ment
  • LN open
    • Above Val­ue, Out­side Range
  • Open dis­tance to value
    • 0.4xASR
  • Pre­mar­ket
    • H4 Bull Engulf formed on top of D1 demand giv­ing H4-C‑D 1.95094 clos­ing slight­ly with­in D1 Supply
  • Nar­ra­tive
    • Mod­er­ate to Large Imbal­ance due to slight open­ing above range at ADR 0.5 high. Due to poten­tial­ly hav­ing start­ed the sum­mer­time chop sea­son price could have the ten­den­cy to con­tin­ue bal­anc­ing in line with the 2‑day over­lap­ping val­ues. Mak­ing a big move from recent­ly formed D1 demand in pre­mar­ket com­bined with an open above val­ue the sen­ti­ment favors longs a bit for a poten­tial Return to Val­ue play. 
• Clar­i­ty (1–5, 5 being best)
  • 3
• Hypo 1 — Swing Reversal
  • Nar­ra­tive: D1 Sup­ply, over­lap­ping val­ues, price trad­ing at the top of the range,
  • Pre­ferred: Strong Bear­ish PA, IB exten­sion down, sus­tained to val­ue edge, mon­i­tor for VAA
  • Con: Big H4 move premarket
• Hypo 2 — Trend Con­tin­u­a­tion / Return to Value
  • Nar­ra­tive: Big H4 move pre­mar­ket, open sentiment
  • Pre­ferred: strong Bull­ish PA with IB exten­sion up and sus­tained auc­tion tak­ing out over­head sup­ply oth­er­wise a poten­tial pull­back to val­ue edge to PA rever­sal to failed auction,
  • Con: pos­si­ble bal­anc­ing over­all market

Addi­tion­al notes

• Cap­i­tal Preser­va­tion Rule in effect

ZOIs for Pos­si­ble Shorts

• D1-C‑S 1.95621

ZOIs for Pos­si­ble Long

• H4-C‑D 1.95094
• D1-C‑D 1.94889

Mind­ful Trad­ing (lack of sleep?)

• Feel­ing a bit anx­ious so will be a bit care­ful. Also, with being the first day of the month I do not need to go wild on the first day.

Focus Points for trad­ing development

• Month­ly Goals
  • No momen­tum trades on Non-Farm Fridays
  • Total of 13 trades by the end of the month
• Week­ly Goal
  • Min. 3 times work­ing out at home + manda­to­ry cardio
• Risk Man­age­ment
  • With­out forc­ing a trade: aim to take 1 trade a day, if pos­si­ble 2. 
  • Cap­i­tal Preser­va­tion dur­ing draw­down allows for 1R profit-taking
  • 2 con­sec­u­tive days of lack of sleep = NO TRADING

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