Hi Liam,
I really enjoyed your books. I am now reading each book for the second time, and more in-depth.
I have a question about when the institutions are taking profits.
I understand in order for them to take profits, they need enough orders in the same direction as the trades they have placed.
If they take profits off a sell trade for example, and the market retraces slightly; if the market then breaks this low, do we assume that they placed more sell trades at the high of the retracement in order to make the market continue to the downside?
Thanks in advance
My Response:
You’re spot on with your assumption, but remember: wait for price to genuinely break the low—or high, in a reversal scenario.
A minor break where price momentarily dips through the low doesn’t qualify as a genuine break. It’s plausible banks are just lining up another set of buy trades parallel to their initial batch—this could be the trigger behind the retracement.
But, at this point, it’s all conjecture.
Hence, it’s advisable to wait until the price decisively breaks the low through multiple substantial candles before you assume sell trades have been placed to wrap up the retracement.
Cheers…
PAN.