Here is an example from a live action! You can see the green box we don't have a candle close inside this area at the moment! So, that means we have a very strong area what we dealing right now! Up and down, strong candles smash this with a full break below and full break above! This "full candle breaks" means that we need a very strong power from sellers/buyers to break this and what we get if we see some powerful volume - we see those levels get smashed! And those bounces are just a weak try to go through this level - the buyers try to push the price up but sellers react quickly and we are back below the green box! So hopefully this was helpful and now You can identify the strong levels better!
Don't forget to SHARE this, hit the LIKE and the FOLLOW button if you feel this topic deserves it! That's the best way to support me and help to push this analysis to other users. Best regards!
Comment
⋅
Share Your thoughts on the comment section and I try to help You as much as I can! Have a nice day!
EDIT: While I writed the post we got another touch from this area and another bounce back below!
Great! really this thin area between strong candles and bounce back is very important region for resistance or support. I usually like to figure out some special strong candles looking for huge bars of volume that can appear on a little candle or really huge. Nice tips Vaido
VaidoVeek
⋅
@Pavoe, You are welcome Pavoe!
Can You explane this little bit how do You exactly do this: "I usually like to figure out some special strong candles looking for huge bars of volume that can appear on a little candle or really huge."
Thanks!
Pavoe
⋅
@VaidoVeek, Sometimes we have a little doji or spinning top candles or even the hammer that seems to be ordinary but when you check the volume associated with them.. you be able to finde a extraordinary huge volume that defines a point that the stock usualy going to rest or come back soon until other of these special candles appear againg.. Please check the hammer presented on 1H chart BTC at 2018-06-13, 4PM UTC. There is a hammer with extraordinary volume almost 1.2K of BTC negociated in one hour (bitfinex) that beat the price from 7.8K to 6.2K So, after that the price walked sideway and then lost to 5.7K and now the price is back to 6.2K.
VaidoVeek
⋅
@Pavoe, Thanks!
But this indicates only the seller pressure and after that, the price bounced upwards! How do You expect to price reversal from there?
Pavoe
⋅
@VaidoVeek, Really I do not necessarily expect a reversal but a new resistance /support level that the price going to work during the next sideways movement.