XTL 0.72% 4,672.7 s&p/asx 20

Yes, this type of bar can be difficult to interpret...

  1. 16,642 Posts.
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    Yes, this type of bar can be difficult to interpret individually, as they offer lots of 'if's and buts'.

    As always, the response over subsequent days will usually tell the real story of the intent behind (or what caused) the trading like this.
    (and sometimes, there is no actual 'intent' behind it, sometimes there are just trading anomalies which form in the market - so if there is no understandable reason for it, and no obvious response to it - just leave it, and don't over analyse the individual trading action - sometimes you will do your head in trying to understand everything that happens, and why)

    Sometime switching to a larger timeframe can help with the bigger picture in this regard.

    The amount of volume on the individual bar, can also provide an insight, particularly if it is much higher, or lower, than usual.

    In VSA/Wyckoff, the established market influence directly behind the individual bar, or if a serious (positive or negative) event has recently taken place, can help with the interpretation - and whether it is likely to be positive or negative overall.

    I can go through all the different ifs and buts that can be thrown up, but it really only confuses the situation, best just to watch for the response, if any, then come up with a logical answer.

    cheers
    Last edited by Jako8557: 26/03/19
 
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