So here is a perfect example how the Institutions operate on a daily and weekly basis and how order flow works.
We got this gap because the institutions trapped traders into the believe that price would go higher and many orders were stuck there over the weekend.
Then we got a small gap signaling buying pressure while in reality the institutions sucked in orders to build their position (maybe only short term in a bigger cycle). The gap also faked some people out because they believed that this was a valid double Top there. They then just went 3.5 Pips higher to trick people into more buy orders so they could prepare for the final big move.
Just another day, same methods.
Trading is all about probabilities and order flow that creates those patterns.
On the lower timeframes those "patterns" are unreliable because all the pending orders and such create heavy noise at important levels and those patterns are more a result of that noise and HFT firms than a planned move within itself. So we should stick to higher timeframe confluences.
But anyways, this is how it works.
Cheers
We got this gap because the institutions trapped traders into the believe that price would go higher and many orders were stuck there over the weekend.
Then we got a small gap signaling buying pressure while in reality the institutions sucked in orders to build their position (maybe only short term in a bigger cycle). The gap also faked some people out because they believed that this was a valid double Top there. They then just went 3.5 Pips higher to trick people into more buy orders so they could prepare for the final big move.
Just another day, same methods.
Trading is all about probabilities and order flow that creates those patterns.
On the lower timeframes those "patterns" are unreliable because all the pending orders and such create heavy noise at important levels and those patterns are more a result of that noise and HFT firms than a planned move within itself. So we should stick to higher timeframe confluences.
But anyways, this is how it works.
Cheers