Question:
Thank you for your explanation about volume and the details of the articles, I will take a while to see which would be more interesting and useful for me if you agree, in the meantime I could remember another concern that comes to my mind due an old post from you.
You detailed in an excellent post that we strictly need to see the swing highs and lows to determine If the trend has changed, in line with Sam Seiden explanation but with some particular differences,
If we take an downtrend for example: you mentioned that a trend has changed when we see a LOWER LOW followed by HIGHER LOW, this is as long as a higher low have not yet achieved we canât say that trend has changed,
But my concern is with Sam Seiden definition, he say that a trend change take place when we see a âLOWER HIGHâ followed by âLOWER LOWâ for a downtrend, this is a little different with your definition of âLOWER LOWâ followed by âLOWER HIGHâ, Iâm more inclined to your definition instead Sam but would like to know if possible why this little discrepancies.
And finally, you will kill me for several questions, sorry Liam, I never known a person with such extreme level of knowledge, even more than Sam I thought,
In this particular case, according to your guide of Supply & Demands, would be this technical behavior a confirmation of profit taking instead buy orders?
According to the last red arrow on the right, the price close below the 3 previous blue arrows which would confirm that the previous orders were profit taking since the institutions would not put the remaining orders more below of the price were they had been placed at the beginning on the blue arrows since they would start losing money,
Could be this an exception if they need to put more orders? This is, leave the price fall a little below of the previous orders on the blue arrows?
SAME GRAPHIC on 4H TIME FRAME
Sorry for many questionsâŠ
My Response:
Apologies for the late reply; Iâve been swamped with work on the site and havenât been able to respond to emails as promptly as Iâd like.
Thank you for your comments; theyâve been really helpful.
Let me address your queries.
Iâve attached a chart to illustrate the price point I was referring to.
Itâs not a âconventionalâ support level but itâs crucial because itâs where the banks have opted to buy twice during consolidation (indicated by red arrows). This repeated action suggested that they might buy at this point again, prompting the reversal you mentioned (marked by the red arrow).
Yes, youâre right about the postâs title being âSecond Chance Supply And Demand Zonesâ, or something along those lines. However, this approach wouldnât have been effective in your case, as it assumes a quick price return to the zone.
The idea is to await a potential re-entry into the trade if the price revisits the zone, allowing a second chance at a trade rather than missing out entirely.
In terms of trend identification, I usually follow the traditional method: a lower low followed by a lower high signifies a shift from uptrend to downtrend, and a higher high followed by a higher low indicates the transition from downtrend to uptrend.
If you could point out where I stated otherwise, Iâd appreciate it; itâs likely a minor error on my part.
Donât worry about asking questions.
As long as I have enough time to respond, Iâm always happy to help.
As for the nature of this consolidation, itâs hard to tell whether itâs due to profit-taking or trade placement. The most recent low is notably lower than the others, suggesting profit-taking, as banks usually prefer similar prices for trade placements.
However, itâs not low enough to definitively suggest profit-taking; it might just be a deceptive move preceding a reversal.
Upon further review, I noticed that the price did indeed fall, confirming the consolidation was due to profit-taking.
However, there was no way to predict this before the drop.
I hope this clarifies thingsâŠ