To assess the EURNZD setup on the 15-minute timeframe, start by ensuring you have marked the extreme supply zone correctly. Here’s a step-by-step approach to guide you:
Identify Key Levels: Look for significant resistance levels that have caused a reversal or a strong slowdown in recent price action. These are typically where the supply increases, leading to lower prices.
Multiple Rejections: The more times a level has been tested and rejected, the stronger it is considered. On a 15-minute chart, look for multiple touches and rejections that confirm the relevance of the supply zone.
Volume Confirmation: Check the volume around the supply area. An increase in volume can validate the level as it indicates strong selling pressure.
Price Action: Analyze candlestick patterns within and around the identified zone. Bullish reversal patterns or bearish continuations near your marked zone can offer additional confirmation.
Confluence with Other Indicators: Examine whether other technical indicators (e.g., moving averages, RSI) support your zone’s significance. For instance, a supply zone aligning with an overbought RSI or a major moving average can enhance its credibility.
Higher Timeframe Alignment: Always compare with higher timeframes to see if the supply zone is also evident there. This ensures it is not just a minor fluctuation in price action visible on lower timeframes.
By following this methodical approach, you can verify whether your supply zone is drawn accurately and potentially refine your trading strategy based on this analysis.
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