There has been lot of confusion among technical forex traders, pertaining to a Supply level on EURUSD. The one at which price is currently sitting at.
We have seen plenty of traders looking at this “Fictious” supply level and preparing their guns to fire. But we are not doing the same. We felt obliged to put-up some clarification about this specific level.
Even though it’s a pretty zoomed-out chart. But it’s still not providing a complete picture. For us, this isn’t even a proper supply level. It doesn’t fits our rules. We’ll come to that point later. For now, let’s consider, this is a valid supply level. But is it? Is it the first time price reached this level? Is it really a 9 months old supply level? Nope, it isn’t.
The actual supply level was formed in Jan 2015. 15 months back!
This is the second touch to the level. That’s why it’s important to re-consider your exact position, your stop loss and your take profit. The complete picture and actual supply level alters everything. Your stop loss should go down to 200 pips from potential 270 pips. Your take profit should be 180 pips.
Lastly, even if it was a first touch to the level, we wouldn’t have traded it. For us, the real supply looks like the one formed in Jan 2015. Not the one in Aug 2015. The simplest thing to understand is that:Not every sharp price drop means it's a supply level. There is a lot more to it. Click To Tweet