or is it instead of rapid interest by short sellers, is it more along the lines of because of no interest higher sellers rapidly lowered the price.
Today unfortunately I had to run some errands that required my whole morning. I just finished reading this new exercise and wanted to bud in. Before the maket opened buyers and sellers agreed on value, after the open selling pressure indicated that value was possibly someplace else, the problem was that selling pressure was not strong enough and buying presure started to take over. The moment of the truth so to speak was then when prices were back at "value", were there enough buyers interested at this level to make it stick or not?, and as we can see there were not that many people interested at this level so, no more people demanding the stuff, some holders got scared and started dumping their stuff back, taking prices lower. Btw, I will run the whole exercise tomorrow morning.
Correct. The business of traders is trading. If they can't find trades where they expect to find them, they will look elsewhere for them. Traders returned to the mean because that's where all the traders are supposed to be. But everybody else had moved on. So those who returned there had to look elsewhere, either higher or lower. No need to over-conceptualize it all. It's just shopping. One store is empty so you go where the goods are. So what are the implications here with regard to the probability of a short or a long off this point or level? Nothing going on here. You have to move along.
All it simply means is that nobody offered to pay one tick higher than the price you see. What is more interesting as well is that the first bar closes slightly lower than the top. The next bar opens at the top and goes down. So you essentially have a double top based on the ticks. This tells me that price tried twice to go up, and there was nobody to buy it one tick higher.
so just to keep it stupidly simple. No interest up traders look down. No interest down traders look up.
Well, If buyers dont want it anymore at "value" Why should you? then the long is discarded, then you only have short or do nothing until the bottom of the range is cleared, by then is an issue of info/price risk. This is where backtesting comes in handy, if this behavior has a high probability of becoming a trend you have to take the short inside the range or else just wait for a ret.
And given that the UL of the primary downtrend channel is around 3560 and the mean of the primary downtrend channel is around 3490, where might traders look first, given that they are looking for trades?
This is also where context comes in. This takes place at about 10m in, which is the tail end of the maximum confusion period. Do traders approach this level hesitantly? cautiously? Or do they race toward it, perhaps because they couldn't find trades below that range? And when they find everybody's gone, do they sit, or does the next bar plunge 4pts? All of this must also be factored into a quickie probability estimate. Is it really necessary then to wait for the break of a line? a decline of X more points? Or is one justified via calculation rather than feelings to place a sellstoplimit below that second bar and see what happens? What are the risks if it doesn't work out?
Given where we are right now 3490. We came back toward the mean after hitting the lower limit of the TC. Maybe it's time to see what's going on near the top, but we'll soon find out.
The question had to do with where we were at the time. And traders did work their way toward 3490. They never hit the LL, tho. That currently is around 3410.