Figure 1.0. See obvious price reaction to a certain area? Look for a technical level in it.
Even if the exact underlying technical reason, which stopped or reversed price movement at a particular spot is unclear, it is still possible to trade it by fallowing few basic principles of liquidity dynamics around such areas.
Some long time ago I managed to see a pattern and trade similar technical levels as I trade now, but without actually knowing the reasons behind them – just by observing price reactions and keeping my profit targets and risk limits tight (see my older article - Intraday Rhythms of EUR/USD Pair).
Price behaves differently in certain parts of the range and in certain hours of the day. It moves inertially and, incredibly, it has all the similarities to the Newton’s lows of motion. J…