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Hi,
I have this chart where on Day1 the chart was trading below the EMA to begin with a huge bull trend bar at the open. From there on it kept going above the ema and took support at the ema, the little circles' drawn.
On Day2 the market continued with a gap up and again trend bar, going forward it continued to move further away from the ema indicating some strength in there. At the top after the two decent trend bars, the market rallied down below the ema.
Since it has been above the ema for more than 18 bars, probably here it's like 80 bars or more,
I would have bought that 2nd bear bar expecting the market to go atleast once above the ema but here it never came close to even that level not even days after and the 3rd bear bar is the first gap bar after so many bars above the ema.
Please if anyone can shed some light why it never managed to go that level? I expect lot of trapped bulls in there and wouldn't have managed to exit yet.
Regards,
Nandkishore
Hi Nandkishore, it might have been an exhaustion move (on some higher timeframes) before prices reversed they created a wedge top and LH (could be wrong 🫡)
You should take a look at the HTF like the daily chart and what the M5 is telling you.
Day one was a bull bar closing near it's high. This creates like on every other timeframe a higher probability of a bull FT. So all bull are buying the close of that with a minimum expectation to get 1R on the daily TF.
After 1R is reached the market sells off as bulls are taking profit here, bears now that bulls will take profit lates at 1R daily so both sides are selling at the W top.
Why you would have bought the 2nd bear bar with this expectations when it's a clear bear signal and you are a bull you should be thinking about getting out at those points. Also this 1st big bear bar invalidates a lot of previous PA and was a fist test of the BOP around 51,800 as far as I see it right.
