week18 testing out mean reversion hypothesis on GBPAUD case study


On D1 a potential 4 day bull trap could be happening since there is a 4 day flat high setup.
I can only see that price seem to be overextended from the exponential EMA.

week18 GBPAUD D1 experiment with mean reversion trades 290414


My basis for a short is built on this potential 4 day bull trap but right now nothing is of conrete yet. I am looking into h4 LTF for an earlier entry and on h4 a candlestick seems to have been overextension as it does not seem to be touching the EMA based on the trend for past 6-10 hours.
Although not a guarantee, it could be likely that price seem to have a tendency to reverse, just like a ball is thrown into the air. The gradual change between potential energy and kinetic energy reminds me of how price, when it seems to have reached the top, will be pulled back by gravity.

This hypothesis is still in its primitive stage. My main movtive to short it will still be based on confirmation of regret over multi days high/low. Mean reversion merely gives me an earlier entry.

week18 GBPAUD h4 mean reversion 4 day bull trap 290414

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