Supply enters the EURUSD market

CME:E61!   Euro Futures
The chart tells a story and the story unfolds bar by bar.
From Bar 21 to bar 34, the price took a rally up. What i see is - 19, 20 gives kind of bullish signal and 21 confirms hidden buying. Are the combination of these three strong enough to indicate a rally. Second question, I am kind of having a hard time understanding how to detect hidden buying.... Could you please help me?
TheShakeOut TalalBin Malek
Hi TalalBin Malek. Hidden buying is not hard to identify. When you have an up bar with increasing volume and decreasing spread that means that there was more activity on a narrower spread compared with the previous bar. This increase of activity must be selling, if it would have been more buying the spread would have been wider instead of narrower.
TheShakeOut TheShakeOut
There is different types of hidden buying and the close of the bar tell us more details about it. For example, bar 9 has hidden selling on it and the close on the lows adds more weakness showing us a weaker sign.

Hidden buying by it self is NOT telling us that the price is going to change trend, but it is telling us that demand has appeared at those prices. Remember that the price has inertia and momentum, you will have higher probability trades trading with the trend. For example, before bar 26 the price has been moving higher, it is a major sign of strength and having that sign in the background, as soon as the price resumes the uptrend you could look for longs on smaller time frames.

It is very important to read the market and understand what every bar is telling us. After bar 28 you can expect higher prices and use trend channels and support and resistance to have a projected take profit, but you have to read the market bar by bar because supply could hit the market again and you need to be ready to react to that moving SL to break even, locking some profit or just closing the trade. Your strategy and your trading plan have to define how you manage your positions.

Remember that you read the market and you do what it tells you to, you do not wait for the market to do what you want it to do.
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