This trade that I have taken was on the forex market AUDJPY and it was a classic case of accumlation by the smart money. Prior to the accumulation the currency pair was marked up due to the policy statement released by the Bank of Japan. Then shortly after prices dropped back towards the levels before it took off.
Trade Setup
The first thing we see is a climatic action bar with Ultra-high volume. This is the start off accumulation by the smart money. The currency pair gets pushed down further to entice the retail trader to take short trades. Looking at the volume as the currency is dropping, we see the volume decreasing.
The currency begins to move sideways and this sideways movement is the accumulation by the smart money. You can see as the currency moves higher there is an increase in volume and when the currency price falls, we see decreasing volume. This tells me that selling is drying up.
The currency then moves above the trigger point which is the high of the climatic bar, retraces back to the trigger point and delivers us a test. The market is being tested at the trigger point to see if there is any more selling pressure. With the volume quite low, the selling has dried up and the currency moves higher.
The end result is as follows:
Happy Trading
The trading software used is Smaret Centre Pro created by TradeGuider. If you have any questions in regards to the software I use or the setup, you can email me, danny@tradeguider.com