Learning to trade push throughs

Learning to trade push throughs

am 23.05.2005 11:17:32 von Tracker

Firstly what is a push through?
Is this the same as a gap?
I would describe them as being different. A gap is created when a
market is closed, the overnight gap as many would describe it. This is
caused by an overnight move in the belief about a level for the market
and can be caused by events that occur during the closed period of a
market.
A push through can bee seen during market hours and can be seen quite
frequently particularly in the Forex markets. These could be caused by
a sudden shift in belief, an event such as economic figures being
released or a deliberate push by the professionals in the market to
push the market through areas of potential support and resistance.
Frequently these push through areas can be useful levels to trade back
to but only if a suitable indicator occurs to invite you to trade to
that area. Drawing a line through the middle of this area is usually
most interesting as it invariably coincides with an important recent
support or resistance area. This provides a perfect target for a
potential trade. But importantly, also can leave a void where a number
of stops are left behind. OK, these stops are not actually placed in
the market but existing in the minds of the market participants at that
time, otherwise they would be filled during the push through move and
so slowing the market down so no push through is then created. If this
void does then exist after a push through then the professionals will
be keen to collect those stops in the void for future profit making
potential.
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