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Price Action Trader @PAVLeader
, 15 tweets, 8 min read Read on Twitter
1st signs of reversals at seen on lower TF in BNF. Let's wait to see if the retest happens at lower volumes. Post that if #PriceAction confirmation happens, one can go long. Till then wait patiently & enjoy your popcorn :)!
#BNF behaved 100% inline with #priceaction attributes. Did a couple of low volume tests and moved up smartly trapping bears who are selling on rise. Don't think like everyone, Think outside the box ;)
Here is the full analysis of this early reversal pick trade. Its important to know the context & background to understand what happened today in BNF. With RBI governor resignation & exit poll results (mostly not in favor of BJP) there was enough bad news in the market.
Due to which we had 2 gap downs consecutively. In fact this possibly was sensed by the market a week ago hence the fall started from 27000 levels. Today when entire world was bearish & was looking for shorts (typical herd mentality) I was looking for reversal (against the herd).
Price Action helped me spot this. Serial number is 5M candle sequence -
1) 1st candle with highest volume couldnt sustain the high & closed in little above the midpoint. Indecision!
2) 2nd candle selling continued & it closed almost at the lows. Selling pressure continued.
3) 3rd candle selling continued and price pushed down but some buying came at the bottom and it closed somewhere in the middle. Momentum is losing steam.
4) Buyers tried to push prices up but failed. Price closed at the lows. No buying signal yet.
5) This candle pushed the prices down continuing the previous selling pressure but little buying at the lows showing reduced selling pressure. Candle size is smaller.
2 Key points to note here is that with every candle the size of the candle is reduced & volume is reduced which is a clear indication that selling pressure is losing the ground & bears are losing the steam. Now with little bit of push from bulls will take the prices high.
6) Bull candle with higher volume than previous candle and closed near the highs. This shows bulls are back. Aggressive buyers can take long at 25760.
7) Follow up buying was seen in the next candle with almost 1.5 times volume & prices closing near the highs.
It confirms that day low is possibly made & it will go higher because despite of all the mayhem prices couldn't go lower. Now all what was needed is to test the lows to shake weak hands & trap more bears.
But with every rise weak bulls were booking profits thus prices were coming down however strong bulls were buying at every fall taking price back up stronger. You can see this in every down candle volume was less & every up candle volume was higher with bigger candle size.
This shows upwards momentum and a clear indication that prices are only going higher & bears will be trapped badly. At every resistance profit booking happened which pulled the prices lower but bulls took control strongly & took the prices higher.
Once bears gave up (21st candle) there was no look back. Rest is history..
Moral: Know the context & background and then apply price action to take your trades. It works most of the time & keeps you on the right side. Trust it was helpful. Kindly retweet to spread this message for learning purpose. I am attaching the full 5 minutes chart for today.
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