Don’t Trade Into Key Lines
During the Tuesday session, I took a quick Power Move short on EURCAD.
I analyzed and justified my entry in the Live Trader community with our top Platinum students. One of the key points for this particular entry was to ensure we were “closed and cashed” well before the market reached the next key support level at 1.4400
We were able to cash out well before then. The trade went exactly to plan.
Unfortunately, we had some students who traded this pair again last night (Wednesday)… the issue with the Wednesday entry is the market was now extremely close to that 1.4400 level. In fact, it would have been basically impossible to grab a Power Move that took profit before hitting this level.
This is a snapshot of the 5-minute chart last night. Notice the reaction at 1.4400?
This is why we never trade into key support and resistance lines.
The 1.4400 acted like a concrete floor and rejected price over 20 times before the bears gave up and the market rallied.
This is often what happens at key lines. All the bulls on earth are looking at this line, with their buy button primed. As soon as price pulls down to this level, all the buy orders are triggered – demand surges, price follows. This happens over and over and over again until the bears become weak, and the bulls win the battle.
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