I hope you all have had a great Christmas and New Year Holiday period and are now ready for a massive 2014. By now you should be refreshed mentally and hopefully you got the time to take some time away from the charts and just check out for a little while, which can be needed sometimes after being so mentally engaged day after day. This year is going to be a massive year. Make sure you have your trading goals set with this article here: You Can Reach Your Trading Goals in 2014 and start once again focusing in on what you need to do with your trading business.
XAGEUR False Break Pin Bar
Price in this market had been moving and trending down of late before running into a really solid support level. At this support level price held and then started trading sideways and moved into a really solid period of consolidation. This consolidation was a sustained period of support holding and the bulls and bears fighting to see who could win the battle. Price made a break lower through the support and this was quickly snapped back higher with price closing back above the support level creating a false break pin bar. The key was where price closed. Note that price closed back above the support level which is crucial to where price goes next as I discuss in the trading lesson: The Price Action Secrets Traders Need to Know. This would have stopped out a lot of breakout traders who would have entered on the breakout looking for price to breakout lower of the consolidation and continue a move lower.
Because of the recent consolidation and downtrend, there was a really close over head resistance for this false break pin bar and when the pin bar broke this was exactly where price moved into. When price is in these tight and choppy situations, big moves are going to be rare and this is what price action traders need to take into account when taking and managing trades. Traders need to manage a trade differently when it is in a tight consolidation market compared to when it is a free flowing and trending. This is part of being a price action trader and trading price action. Price in this market is still now hovering around the resistance, but it would not now surprise to see price continue to consolidate before we see any sort of breakout in either direction.
If you are looking to download a demo of the correct MT4 New York Close 5 day charts that have this market to trade see here: Correct MT4 New York Close Charts
XAUEUR Daily Chart