first bar opens on the high, closes on the low. selling throughout the whole bar, and it also drops below the previous swing low, showing that sellers are now in control... more supply than demand.
Ghost of If You Can Draw A Straight Line
- Thread starter dbphoenix
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first bar opens on the high, closes on the low. selling throughout the whole bar, and it also drops below the previous swing low, showing that sellers are now in control... more supply than demand.
Second bar?
Price couldn't go below 3445. It opened and closed on its high, so this price level was rejected, no sellers, buyers stepped in at 3445.
To add to this: The close was still lower than the close of the previous bar, and the open of the current bar. The buyers did step in and recovered most of the drop yet have not been able to push beyond.
This may mean buyers are willing to pay higher prices as sellers have the upper hand to keep raising their prices while buyers chase. In this case the buyers haven't chased past the level where the bar began. Are sellers are going to lower their offer prices to sell or wait to see whether buyers are willing to raise their bids more?
Third bar?
Almost reverse of second bar. Opened and closed on the low, couldn't find a trade above 61. So we couldn't go down, and now we can't go up. The context is still we are in a down trend, but in this immediate vicinity, we have tested up and down and rejected both.
So first it closes on its low. Its length is greater than that of the previous bars showing that price was no longer in an equilibrium so to speak, there wasn't an agreement between buyers and sellers. Buyers were no longer willing to pay what the sellers were asking, and so price had to keep going down for a trade to happen. We dropped below the low of the previous rejection of 45, opening up the LOLR to the down side.
Sellers again pull back and let buyers chase price up. Buyers raise their bids but then sellers don't find any buyers at a level below the high of the previous bar.
The seller lower their price and buyers keep lowering their bids. Now sellers are chasing buyers who suddenly are not willing to entertain the offers at which sellers are selling. The buyers pull back their bids sharply and sellers are forced to chase them. Buyers even go below the previous level where they had stepped in and started chasing offers.
This time though they are not in the mood to do so again and keep going lower. Sellers have no choice but to keep dancing to the tune of the buyers who have drastically and quickly lowered their bids by pulling back.
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