What exactly happens at a Higher Low?

Price goes up, but the retrace doesn’t hit a Double Bottom.
Technically we’re now in an uptrend; meaning the sellers are in control…

Apparently no trades take place below the Higher Low.
We’re dealing with buyers who bought earlier and new ones stepping in.
And also sellers holding positions or unloading…

I’m getting confused (as you can tell )
Who, with more brainpower, can explain this in simple language?

Thanks!

 

sorry, no brainpower to comprehend what you say.

perhaps draw some charts so that we can comprehend.

 

What's happening with buyers and sellers at B?

 

at point B, the market might go up (as shown in your diagram).
I'd call that trend reversal.
But I'd prefer to wait for another higher low before I long it
if the downforce momentum is quite strong.

at point B /after point B, the market can continue to go down.
I'd call that trend continuation.

at point B, the market can go sideways (neither up nor down)

 

If that's the case: someone told me that point B isn't random...

 

not sure what you mean.
So I will roughly guess your Q.


point B can be very high.

point B can be at the same level as point A.

point B can be lower than point A.

My point is that there are many possibilities.
That's why trading can be rather confusing / challenging

 

Well, just let's assume that it's like the pic...

 

I usually call point B as Trend Reversal. You probably see TR occurring everyday as a daytrader.

One simple and effective trick to identify TR in any time frame is by combining both MAs and EMAs. I'm not going to share chart here for everyone to see LOL...

Being able to identify TR is only a small part of the game if you want to make consistent profits. You also need to figure out when and how PA forming a trend or going sideway. Most newbies are very likely get crushed everyday due to sideway actions which they aren't able to recognize.

 

Some old idiots too...!

 

The issue no one is dealing with is that Point B is only identified after the fact. Nobody can identify Point B in real time and say that price will definitely go up instead of continuing down. It is always a 50/50 proposition what price will do in the next time period.

However, probabilistic price models aren't that good at predicting the future either, because distribution skew and kurtosis are stochastic as well and just lead to more input error into the model.