You're going to hear a lot of talk about TARGETS and how we place our trades near / on the way to these targets. These are specific areas in which the price MUST hit / come back to for one or more of a few reasons.
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RETAIL TRADERS make money by guessing right on which way the market will be moving.
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The MARKET MOVERS (banks and large financial institutions) move the price to where they need it to be.
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One of those Target areas are where they are in DrawDown.
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These areas of DrawDown will be the targets discussed on this page.
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The Banks are ALWAYS in the market; they ALWAYS have positions in both directions; they are ALWAYS in profit in some areas and ALWAYS in DrawDown in other areas.
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These areas can represent HUNDREDS of MILLIONS of DOLLARS, if not BILLIONS of Dollars in DrawDown. So they're coming back for it. The Banks don't just leave money on the table. They don't have to. They have unlimited capital and can have unlimited DrawDown for an unlimited amount of time.
They are NOT going to just leave these trades in DD or close them for a big loss. There is no reason to. They have every resource needed to hang on to those trades and their DD until the time comes for them to bring the price back down to get their money out without taking a loss (or a minimal loss).
You will see here that this is THE #1 TARGET and is responsible for the most amount of price movement.
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We'll add to and update this page as often as we can with new situations to break down for you to see
We also have plenty more examples on our TRADE UPDATES page
TARGET TYPE:
Open Positions Where The Banks Are In DrawDown
Slide 1 of 5
This is a good example to show the level of importance and priority that these DrawDown Targets are to the banks.
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This is EURUSD. We are going to look at the Yellow "2020 to Present" section. I included 2016 to Present just to give you a zoomed out, grander perspetive.
TARGET TYPE:
Open Positions Where The Banks Are In DrawDown
Slide 1 of 3
From our March 10th Trade Update. Let's follow up and see how it played out.
Let's take a look at this past Weds/Thurs because it was a GREAT example of this. And it almost COULD NOT be more obvious what was happening and the reason for the big price movement.
The image below is from our Feb 17th Trade Update. You can see the LOWER TARGETS that we have pointed out and have just been waiting for the price to hit because all of our SELL orders were on the way down to those targets.
This is the same chart, just different colors. You can see those LOWER TARGETS we have pointed out. You can see that since about Mid-January the price has just been bouncing around between the few upper targets remaining in this area, and the lower targets.
Then suddenly on Wednesday, after about 6 weeks of just bouncing around between targets (there are reasons for that too which I"ll also get into)....it was like someone just decided "Ok, we got what we need up here. Let's shoot on down, take care of that thing real quick and head on back"....
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And BOOM! Just like that. The price just made a B-line straight to the target, hit it....
...And immediately started heading back up. Becuase that was it. That's all it needed to do. It just needed to bring the price back to that area for a moment then it could move on.
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And you can see, it couldn't be any more obvious what was happening. The SOLE reason for that price drop was to hit those targets. It shot down, hit the main target almost to the pip, and immediately started coming back up.
And just another perspective for you so you can see how quickly this was done. We have an 80 pip Wick on the H8 Time Frame. Which means the price just shot down real quick, just long enough to hit that target, then immediately started coming back up.
WHAT WERE THESE TARGETS?
On the DAILY Time Frame we have a large area of Imbalanced Price Action. And also a large block of SELL orders that were used to push the price down in order to set up the main move up. So those SELL orders have been in DrawDown since Dec 20, 2021.
WHAT WERE THESE TARGETS?
And on the WEEKLY Time Frame we have another large block of SELL orders and just like on the DAILY TF, these were used to push the price down in order to set up the main move up. So those SELL orders have been in DrawDown since Dec 13, 2021.
The larger Time Frame targets are always larger targets and are of higher priority. But you can see that both the DAILY and WEEKLY blocks of SELL orders overlap one another. So they brought the price to whatever point was necessary to sufficiently mitigate (lessen) their DrawDown so they can close those orders out.
But these SELL orders here were probably Hundreds of Millions of Dollars in DrawDown while the price was up top. And that is how we know they WILL bring the price back.
Because banks don't just leave money on the table. They don't have to. They have unlimited capital and can have unlimited DrawDown for an unlimited amount of time.
They are NOT going to just leave these trades in DD or close them at a loss. There is no reason to. They have every resource needed to hang on to those trades and their DD until the time comes for them to bring the price back down to get their money out without taking a loss.