Fifth and sixth bars?
Ghost of If You Can Draw A Straight Line
- Thread starter dbphoenix
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Fifth and sixth bars?
5th - we open on the high, close just above the low, so same story, buyers unwilling to pay so price has to drop to find trades.
6th - now we have the opposite, we open on the low, close on the high. curiously, our close forms a double top with the bar 2 bar before. although we close just below the high, this is our second attempt to get past 49. we would really have to wait for the next bar to see if the attempt is successful or not.
Seventh, eighth, ninth bars?
7th - open on high, close mid way... the low was rejected
8th - open and close on high. the low was tested again, went lower by a tick, but was quickly bought up. LOLR is no longer down
9th - its a small bar, opening and closing at the same level. neither buyers or sellers are in charge. we were in a down trend, but couldn't go lower, and buyers don't want to buy higher.
And the last two?
Combined, they form a reversal. Open high, close low, and the second opens low and closes high. On a smaller time frame chart this would form a double bottom.
My brain tells me though that we had rejection of going lower just 12 bars ago, so this could just be a pullback in still a down trend.
The first thick one might be a level that comes from some other action, but just based on this chart, it is a level that price couldn't cross.
Each successive line shows first a level where enough buyers first stepped in to drive price up, and then a level at which buyers were unwilling to buy and sellers were able to overwhelm them. (dare I say first the lines act as support and then as resistance!)
The lines also divide the areas of consolidation so to speak, areas where not many trades happened as price moved between different levels of consolidation.
Yes, and it happens more in this chart too. I think the key is that more often, the rejection of the low and climb back up is at least a short term behavior showing that there are enough buyers. But it is unfortunate to see this behavior quickly change within a bar or two. The rejection sometimes doesn't last long at all.
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