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How to Tell Where Other Traders Have Placed Their Stop and Buy Orders (Part 5)
04/03/2009 12:01 am EST
Several bars after I got short, price spiked lower with a wide range bar and my limit buy profit order was filled. You can see price did head even lower, so perhaps I was too conservative? Maybe price has begun a major push lower now!
Price could not stay below the natural area of support. There were indeed many limit buy orders in this area, and you can see by the price action that soon, traders were scrambling to buy the Canadian dollar.
I'm quite pleased with the results of the trade and even happier about the accuracy of my market map.
One of the most important things I teach the traders I mentor is "Plan your trade and trade your plan." You can see here that though there was a point in time where it would have been easy to question the plan, in the end, the plan was pretty darn good!
One last thought: When you sit down and do your pre-market analysis, always try to determine where the majority of the market is hiding their limit buy and sell orders. Update this market map as the day goes on. After you've practiced it for a while, you'll find it's an invaluable tool in your trading arsenal.
I wish you all good trading!
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