Hi Liam
I would like to ask can we look at how long each swing required to form to identify which buy or sell side the bank place during consolidation ?
I have this question because usdcad was under consolidation during 31/12 to 07/01, I found each swing low required 3-4 days at H1 timeframe to develop then the price went up and both high and low of the consolidation show lot of long wick candle
Do bank trader have this time tendency to put their trade on market during consolidation and reversal structure pattern forming?
What is your strategy to trade consolidation ?
Why forex market always show retest of the price ? Is it related to bank or retail trader taking profit?
Is there any reasons price go back to supply or demand and then reverse , just support/ resistance ?
I have many questions to ask.
Thank you very much
My Response:
I appreciate your questions, although I was a bit unsure about the retests one.
If I misunderstood… please clarify, and I’ll respond accordingly.
As for your first question, I don’t believe banks place trades according to time during consolidations or within reversal structures.
While it’s a thoughtful idea, it lacks evidence.
The primary aim of banks is to locate sufficient orders to execute their entire position for trade placements or profit-taking.
Time doesn’t influence these decisions.
If there are enough orders within their trading session, they’ll act accordingly… regardless of the hour.
As for a strategy for consolidations, I’m as lost as you ae.
What I usually consider, however, is the trend prior to the consolidation.
Price can’t consistently move in one direction without consolidations and retracements, which prompt traders to go the opposite way.
This gives banks more orders to execute trades.
Therefore, if I see a prolonged trend or a consistent direction before a consolidation, I anticipate a potential large retracement or reversal. Retests typically result from banks placing trades or taking profits, depending on the level being retested.
Banks often need to execute more trades, but they can’t do it all at once due to the limited availability of orders.
So, they cause price to return to the initial trade point—the supply or demand zone—to complete their position.
This method is also used for profit-taking, but less frequently than trade placements.
Support and resistance retests, either standalone or at a breakout point, are generally due to banks placing trades. They prompt the price to revisit the breakout area by taking profits from pre-breakout trades.
This profit-taking moves the price in the opposite direction, leading many traders to place new trades or close losing ones, thereby providing the banks with more orders for trade placements.
Hope this clears things up.
PAN.