1) We had a weekly bullish candle that closed above the previous weeks high, printing a bullish engulfing weekly candle.
2) we have marked out the weekly low (ORIGIN) meaning at this price level the only way the upwards impulsive move could have occurred is by the initiation of a buy-program or a buy click, so we had a strong move from weekly low to the highest high as we have marked out, (note), that buy initiation from the current week took the previous weeks high, this is extremely important as i will go over. again i have marked out the previous weeks high (look left).
3) we are well to assume that the institutions, are holding buy positions, they follow the law of the land, protect and add to position. in this case protect the weekly low. (if they are bullish)
4) there is one zone i have marked out, (in blue) this zone is where the re-accumulation of BUY-OFV (BUY-ORDER FLOW VOLUME), was transacted at, notice how price paused or based and then we had a strong bullish candle or impulsive move to the upside. its a long explanation but briefly they stacked orders (buy-orders) within a tight range (consolidation) as we know every consolidation has the heaviest volume because that is the smartest way the institutions can initiate their orders and get orders filled to continue the price in their intended direction.
5) now we have our buy-zone or demand-zone, because their may be existing demand or buy-orders still sitting in this zone, in the form of pre-set limit buy orders, as we know if we buy we are at wholesale prices (cheap), therefore, if price comes back to this zone we may tend to see a reaction. why? because the buy-orders that are still sitting in this zone, may trigger as price comes into the zone, as well as more buy-orders entering the exchange. (remember if it is cheap we buy. not sell.)
6) the only way price will enter this zone, is what i like to call Re-balancing of the weekly candle, or you may call it ''retracement'', if the algorithm Re-balances price on new week open, as it comes down, that also inducing more sellers into the market, providing the liquidity for the institutions, so as retail is selling on the week open as price moves down into the zone, this is providing liquidity for the institutions, they buy and sell in large amounts,( how can they buy a bunch if no one is selling, how can they sell a bunch if no one is buying), so as price reaches this zone, we will be looking for buys, while retail are selling.
note ( on any candle new candle open, you will tend to see a wick that fills the previous candle) all this is, is a Re-balancing of price,
(for a bullish candle, prices moves down on the new open, Re-balances it and then move up. there is another explanations for this, but for this we will keep it simple for now.
2) we have marked out the weekly low (ORIGIN) meaning at this price level the only way the upwards impulsive move could have occurred is by the initiation of a buy-program or a buy click, so we had a strong move from weekly low to the highest high as we have marked out, (note), that buy initiation from the current week took the previous weeks high, this is extremely important as i will go over. again i have marked out the previous weeks high (look left).
3) we are well to assume that the institutions, are holding buy positions, they follow the law of the land, protect and add to position. in this case protect the weekly low. (if they are bullish)
4) there is one zone i have marked out, (in blue) this zone is where the re-accumulation of BUY-OFV (BUY-ORDER FLOW VOLUME), was transacted at, notice how price paused or based and then we had a strong bullish candle or impulsive move to the upside. its a long explanation but briefly they stacked orders (buy-orders) within a tight range (consolidation) as we know every consolidation has the heaviest volume because that is the smartest way the institutions can initiate their orders and get orders filled to continue the price in their intended direction.
5) now we have our buy-zone or demand-zone, because their may be existing demand or buy-orders still sitting in this zone, in the form of pre-set limit buy orders, as we know if we buy we are at wholesale prices (cheap), therefore, if price comes back to this zone we may tend to see a reaction. why? because the buy-orders that are still sitting in this zone, may trigger as price comes into the zone, as well as more buy-orders entering the exchange. (remember if it is cheap we buy. not sell.)
6) the only way price will enter this zone, is what i like to call Re-balancing of the weekly candle, or you may call it ''retracement'', if the algorithm Re-balances price on new week open, as it comes down, that also inducing more sellers into the market, providing the liquidity for the institutions, so as retail is selling on the week open as price moves down into the zone, this is providing liquidity for the institutions, they buy and sell in large amounts,( how can they buy a bunch if no one is selling, how can they sell a bunch if no one is buying), so as price reaches this zone, we will be looking for buys, while retail are selling.
note ( on any candle new candle open, you will tend to see a wick that fills the previous candle) all this is, is a Re-balancing of price,
(for a bullish candle, prices moves down on the new open, Re-balances it and then move up. there is another explanations for this, but for this we will keep it simple for now.