 Hi everyone, I wanted to make this video on the dollar Swiss and it was a trade setup I didn't take this trade, but I know it was I did some analysis and I think it was for for Spencer who at the time was looking to go long on the Dollar Swiss right and just a little tip if you type in a training view in the search bar you'll get pretty much all of the Charts that I pretty much you know post And obviously you can you know if you click on them you can you know check what was the context of it in terms of You know why you would want to you know what was happening at the time And the conversation probably surrounding that if there was one, but yeah, so the the the actual Chart I wanted to have a look at was was this one and again. I think it was it was a Spencer that Basically wanted to go long on this on this currency pair, and I was about to delete the analysis Because I hadn't looked it is for for a little bit and then I realized I thought oh, yeah, this would be actually you know a really good example of You know just some fundamental analysis first of all as well as you know some technicals now Just to guess, you know put this into again some some more context is was that There was obviously some bullish price action something fundamentally I think it might have been I think it might have been the jobs numbers on the third of February I can't remember exactly what it was it was even that or some sort of CPI number But the point is is that you know the dollar was now looking like a was then looking like a bite Right, and I did some analysis as far as you know pull back into the zone before you know potentially going long Now I didn't know how long that was going to take You know again, this was the original you know analysis Right here so you can have a look But what ended up happening was was prices came down now why this zone this is the this is the question right? So why this zone in particular? What is there's a number of reasons? first thing is that it was Not just a level of you know support and resistance that had been traded You know obviously traded but there was as I put here there was traders Who were caught going short right so a lot of traders who go? Who went short in and around this move here wanted to go short at this move here? You know and didn't get a chance to would have definitely been looking for a trade here And so and we typically would be right in terms of if you're you know fundamentally short on the dollar Swiss Then this is pretty much the best area to look for a short trade at the time not knowing what was coming in the future Maybe a couple of hours later Then once You know these traders got got kind of caught going short on that level of you know support and resistance Yeah, or resistance there, right They've been they've committed capital and then all of a sudden they get caught because prices have gone against them So that's the the capture phase of the the trade right because loss aversion bias kicks in They move and remove their stop losses. The pain sets in as prices go against them. The pain is looking at their their unrealized, you know loss and Instead of accepting maybe one or two percent now they're down 10 15 percent on their account, right 20 percent depending if they're you know over leveraged and so, you know when you're looking at a level of of The of support and resistance or supply and demand. It's really important to understand the motivations of Why there is likely to be more demand and supply at a level. It's not just good enough to say, okay Yeah, you know what that's a level of you know support resistance. That's a level of demand You have to understand why first of all fundamentally you'd want to be a buyer at a dollar over the Swiss Frank and also as well why There's likely to be more demand orders and supply orders, right? So this area here Traders going short pain and then you've got relief now the relief is where traders who went short here would have been To exit their trade at maybe a small loss or a break-even, which is the next best trade after you know going through You know massive drawdown and their account or unrealized drawdown when prices start to come back down They want some pain relief and then if they went short here then they have to basically buy to exit right have to buy to exit and And then there's traders who are trading just support and resistance looking to buy here, you know, they have no idea They're just pressing by a set and pending orders or you know, whatever orders They are looking for entries in and around this area They're looking to buy and anyone who weren't short anywhere up here is probably looking for to take profit And if you go short here then again to take profit You have to do what buy in and around here You've also got you know the dollar which was a buy at the time against the Swiss Frank and so there there we had You know there we have it, right? And so, you know, that was the initial, you know bounce now we did come back further, right? And this is a game due to Liquidity this is due to Not everybody got a chance to buy and when I say everybody I'm talking about not retail traders But institutional, you know banks, etc. Remember they have to accumulate and buy over a certain period of time Right and so, you know when when it's okay for us to just place a place an order a couple of orders But they need to avoid liquid slippage, right? And so if there's not enough liquidity to buy enough orders, right and fill their books as they want to then You know, they you know the the market makers, I guess our task to with Ensuring that there's enough opportunity for them to buy at some point, right? And so this is basically what happened again, right? So when prices like come down and nothing had changed fundamentally for the dollar They could get even even better price. Yeah, and you can see it basically drove prices even higher And so and so yeah this area here this demand zone again. Nobody knows Where nobody knows exactly where the turning point is going to be right, but You can you know be I guess fairly confident that when prices start to come down if Fundamentally and sentiment-wise you still want to be a buyer of the dollar This is going to be a cheap area and you can pretty much see, you know where they again ended up Stop hunting traders, right? So if I kind of delete a lot of this stuff off the chart You can actually see the stop hunt You know below traders would have been going Traders would have been going probably long at that area of Interdates, you know support one two its stop hunts all the the traders Below yeah, so you've got that move to the upside would have drawn in a lot of traders because at the time You know who who's not going to go long at that area, right? Who's not going long at that, you know That level of obvious support and if you even extend that back that's very accurate, right a very accurate level of support and resistance, you know Not everyone can get involved in this trade right the institutions don't want everyone to get involved in this trade and so You know the average day trader would have looked to get involved in that trade You know just just taking that as a level of support It's stop hunts everybody as they you know put their stop losses below that and then You know, you see actually that the big money ended up, you know pushing money higher Which is basically what they wanted to do because they wanted to buy dollars over the Swiss rank so again going back to You know the analysis that was on the the 6th of Of February right here, you can pretty much see what happens now This is a CPR that typically typically typically Is is is middle of the auction and As you're learning I would probably caution maybe against taking these types of trades unless you're really confident on the fundamental side of things Typically you want to trade a auction Lows on obvious auction those an obvious auction hires in the context of Looking at you know where we are on the daily time frame chart, right? So you're trading if you're looking at a daily time frame chart really the obvious auction low would be somewhere down here This would be actually considered potentially, you know, potentially, but this would be considered more fair value And obviously this would be considered more expensive if you're looking at you know buying dollar now There's nothing wrong with buying at fair value, right? There's nothing wrong with it but just in the context of Where the best places to buy you're always looking at lows Rather than fair value, but of course you can start to you know trade at fair value But what I would say is if you are trading around fair value Don't put as much of Your max risk on fair value then you would for example at maybe the lows of it of a of an auction So if you're not if you normally trade, I don't know zero point five percent, right? Then maybe just trade at least maybe he's half that right at zero point two five percent But you'd put more money on the fact that this is the better place to buy if it does come down here Of course, you don't necessarily want to miss out on that move if you know, you have a strong bias So, you know just in case, you know the market doesn't Agree with you in terms of you know where the immediate bargain is right? Then any prices come down here at least you've only lost zero point two five percent But this area here would be the best place to look for buying and then that would be where you'd probably put a bit more on Or your normal position size and if that at the market agrees with you that that is a bargain Then prices should want to go a lot higher. So that's really where we are better risk reward down at the lows And yeah, I thought that was a really interesting Really interesting chart You know in terms of the actual way that it played out, you know, you've got for those of you who understand You know market-making you've got that unfair auction that needed to be completed And actually it was completed right there, right? So the unfair auction started right there It was probably mostly completed there partially, but then obviously there as well That was obviously the completion of the unfair auction An institutional flow push prices to the upside So, yeah, very very very very very nice, you know trade setup I'm not too sure if Spencer got involved in this I'd have to ask but Yeah, the analysis was pretty spot on in terms of You know what what we actually said at the time and And yeah, so probably something sixth and that was where we are and so Yeah, anyways, I hope you enjoyed that and really got some use out of it And again, it's not just about looking at Support and resistance or supply and demand because they're supply and demand is everywhere. Remember fundamentals first, right? Why is why are you buying? Why are the banks buying? Why are they likely to buy at certain areas? And then looking at the higher and lower timeframes or the higher timeframes first Then going down into the lower timeframes If it's in a good spot on the higher time frame If it's in the setup is in the bargain area on the high time frame Then brilliant, you know that this is a decent area to look for buying on a lower time frame And uh, yeah, that's pretty much it. All right guys. Take care and speak to you soon