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The short answer is that the residual liquidity at that level has to be dealt off.

Thank you; I think the retest is a beautiful interplay between short term and longer term traders

Great video. I'm gonna have to watch this a few more times to absorb the info.... thanks👍🏾

hmm that just kick the causation can down the road, why are the seller/buyer dynamic shift at that level ? I think there are couple dynamics at play here. Why the first initial break down happen, I feels like as a price chart continue to be bound in a channel for a long period of time. All the scattered stop loss starting to cluster around the same level as traders looking at the chart and confirm the stop loss level at both high and low of channel. So once stop losses start to clustered within a very narrow range, even a slight perturbation around the channel edge will blow through all the stop loss and trigger the next cluster of stop loss, leading rapid automatic selling/buying. The second phase, the dip buyer start to accumulate, and clustered stop limit buy start to get trigger just as the initial automatic selling pressure is exhaust as the clustered stop losses are consumed. RSI start to reverse, so momentum trader start to pile in, leading to that initial bounce. However as price return the resistance level and since this new price channel is still been discover right now, there is not enough time to accumulate break out stop limit (or rather they are scatter all over the price range instead of at a specific level). From the selling side, there are remaining people who were trap dip buying before the break down, who want to get out and minimize loss, so there is some clustering of stop losses at the resistance. Then there is the second group short seller who want to go bounce short, and momentum trader is watching for rsi and volume and level 2. So at the resistance level, there are clustered sell stop loss but no clustered cluster buy. So naturally you got a higher probability going back down. Once the trend reverse, the dip buyer also setup stop loss at little bit below resistance level and right above the dip buy level. So downward momentum continue to blow through these level and trigger automatic sell and cause momentum trader to positive feedback loop the price movement. I feels like clustering of stop loss (whether stop loss buy or stop loss sell) after a price has been stuck at a channel for a very long period of time is what lead to these initial large move. Then fomo pile on after the initial movement started, until "natural" buyer/seller start to outnumber these automatic seller/buyer stop loss. Then a new channel form, then stop losses start to concentrate at the top and bottom range again, and "natural" trader start to get exhaust relative to stop loss automatic trader. And the cycle repeat.

Excellent video! I find it very helpful to understand the psychology behind the technical moves.

This is superb. Thanks for the info

man you've been in the game for a long time thank you for the knowledge good sir

Brilliant, brilliant video, as always. If you have time, could you do a similar one with head and shoulders? Cheers.

Thanks Mark. Another great video. I'm still working through your Price Action Trading Program. Learning so much. I haven't watched all of the content yet because I keep going back and re-watching some of the videos to make sure that the information "sticks". Your knowledge, experience and enthusiasm for trading is why I bought your program and it's the reason I keep coming back to this channel.

A level can be retested multiple times, and, it can be bypassed also. For example, 1,188 $ has been rested 3 times since the 5 July, + 1 time it failed, etc. I think patterns are key. A falling wedge is 2 crossing trend lines, so there is a contest between them... I expected many times a reversal in EURSUD, but there was no pattern. Hopefully this makes sens that the falling wedge leads to a reversal... Despite the S&P is recovering. EDIT : today, 24th, i think we go on that down path until end of the month. They must finish this leg...

thanks! great video. I had the same question.

Amazing video. Makes a lot of sense. Thank yiu

Great video Mark. Another reason for the retest might be because new sellers will want to wait for the price to retest back up before selling because they know the odds of a retest after a break of support is high. It could be in part a self fulfilling prophecy.

I perceive levels are frequently retested because (a) price is mostly random most of the time and (b) the reference 'level' chosen by the trader is itself mostly arbitrary and mostly random. Take any chart you like and randomly pick 100 levels to observe this - you will see it is common for price to move through a level and return within a short time frame, and that it is actually unusual for price to move through a level decisively. The job of the trader, then, is to prove that the levels they invent show a 'decisiveness' skew (i.e. reduced propensity for retracement) significantly better than a randomly picked level.

Thanks sir for such a valuable insight......

Thanks Mark, should we thus look at volume as confirmation when drawing support or reistance lines?

Great video. We uncover the true beauty of trading when we understand the psychology behind certain price action...

your videos answer questions I've always had that no one else talks about

Great video

Wonderful wonderful wonderful explanation my friend

Often seen as a 'ledge' on the volume profile.

Great content…..

Quick thought from your example. If you have alot of buyers at $50, wont the same buyers be hard pressed to sell at a lower level because that would equal a loss? And this resistance against going lower creates the support?

Clusters of stop loss orders are little explosions that send the price rocketing. But after it runs out of fuel, it falls back to earth where new orders are waiting to propel it.

Keep going....

I dunno, i will think about. Right now, will the Euro continue it's up move, and until when ... ? i have an exit strategy, also an important point, that is if it breaks the 200 ema, on 5mn chart... the volume today is not good. so maybe i quit.

And what about the Stop Losses that are set below $50 for all long trades that are hit, which causes the prices to go south?

I miss Consolidation Distribution in this story. Retail traders are nobodies in the Forex market big institutional traders determine the movement. I think the reason is there are orders left the biggies need to make their real move.

Often i wonder why MM distributes shares to a low (in an uptrend), the price then move up again. Qtn is why do they offload their share cheaper to bring it to the lower level then they buying back higher later?

@dnameisbondjamesbond

2 жыл бұрын

That is to shake off weak buyers from the market. Imagine the MM getting ready to push the prices to the moon. What they really dont want is that in the middle of the uptrend, there is additional selling pressure (done by weak retail traders who r closing their buy positions n booking profit). When that happens, it will require additional effort from MM to sustain the rally, which they do not want. If it happens by any chance, and sellers join the party then the entire campaign could go downhill. For this reason, they shake off weak buyers from their positions by taking the prices down before beginning the actual rally to ensure that the target levels are reached uninterrupted. This shake-off can be easily identified by volume (you will see large red candle with very low volume).

why don't you use rsi to give more insight as to why resistance will break

I have noticed that the broker I use changes the spread significantly whilst the positions are already open. For example, I open an position in XYZ with a spread of 4pt. Later, the spread changes to 150pt and even though the market moves in my favour, I get stopped out. This makes it impossible to use stops with them as the goalposts are constantly moved and you can lose even when you're winning. Does anyone know a spreadbetting broker that doesn't do this?

@ukspreadbetting

2 жыл бұрын

Try TradeNation - they offer fixed spreads so spreads won't widen. www.financial-spread-betting.com/spreadbetting/tradenation-compare.html

Is it true that institutions often bid it back to where their remaining orders are?

@dnameisbondjamesbond

2 жыл бұрын

Yes, they have a problem which we retail traders will never have, which is, to buy or sell in bulk, and that too at the right prices. If they do too much buying, the prices may shoot up to levels far more than what they plan to purchase. It happens often if retail traders also jump in to a rally, so they will have to sell off some of the recently bought shares to bring the price under control. For a complete understanding of different market phases, google about Wyckoff methodology.

Can you suggest me a good broker please I am new

@ukspreadbetting

2 жыл бұрын

Depends what you want to trade but a handful of legitimate ones: www.financial-spread-betting.com/spreadbetting/compare-spreads.html

You look like jim from ‘the office’

Statistically speaking, new all-time highs are made 70% of the time, right after ATHs. And all-time lows are made 60% of the time right after ATLs. Watch that falling knife!

@barandemirci

2 жыл бұрын

Where did you get these statistics from?

They get retested because they want to offer you another last opportunity.

they dont teach this in SCHOOL..