Wyckoff trading method, page-1418

Over the weekend I thought I would try to post (or do some posts) about the individual bars in a chart and their relationship with each other, in any timeframe.
   
When looking at an individual bar and you see the bar's high, it actually shows where enough resistance was drawn out, to stop price pushing any higher.  And when looking at a bar's low it actually shows where enough support was found, to stop price falling any lower.  The close is showing where the equilibrium point between supply and demand was (at this point in time & in this timeframe).
Finally the spread or range of the bar is an indication of volatility, so a very narrow spread indicated a lack of volatility, and a very wide spread indicates quite a volatile market. (spread or range can also be a good proxy for volume, where a narrow spread will usually have quite low volume, and a wide spread will usually see high volume.  So when there is an anomaly in the spread and volume eg- high volume on a narrow spread bar, you should sit up and take notice....)

Keeping this information in mind, when the next bar is complete it can be measured against the defined levels of the previous bar, and together they tell a little story.

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So in this case (above), The first thing I notice is that there is some trading above the previous close, which shows an attempt to rally that was thwarted by enough supply to overcome the demand that was present.  In effect it was an inability to maintain a rally (at this point in time, and in this timeframe).  Then I see that price broke below the previous bar's low, this shows that the level where support was found in the previous bar was broken, and not enough demand could be found to recover the lost ground into the close, which was at the low of the bar.  This new low and close leaves a negative view for the next bar to come.
( be aware that this is just a study of the individual bars themselves, and is not considering volume, the overall influence and background context, or where price is in relation to the major support and resistance levels on the chart).

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Now consider this combination (above), this also shows an inability to maintain a rally, as price has rallied well above the previous close and lost all of those gains by the time the bar completed.  This bar also made a lower low compared to the previous bar, but enough support was found to force a close back within the previous bars spread or range. However the lower close, combined with the inability to maintain a rally, suggests that while an element of support was found, it may only be temporary support, or that the support was being challenged and maybe vulnerable.
(be aware that this is just a study of the individual bars themselves, and is not considering volume, the overall influence and background context, or where price is in relation to the major support and resistance levels on the chart).

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I'll try to do some more of these combinations over the weekend.
I should probably also point out that I don't really consciously do this kind of study every time I see two bars, for the most part I just sort of know what the bars mean as soon as I look at them.  So I don't have to think very much about them, it is just sort of obvious to me, unless the price action is a bit confusing or is particularly uncertain (and also if I am looking at a chart I don't follow regularly, or am seeing for the first time).  I also have to put these little bar combinations into context with what bars have been seen previously, and the overall influence the chart is under at the time, and where the more powerful support and resistance levels are.
So in a nutshell, you are reading an unfolding story on the chart as each bar completes.  If you are following a certain chart closely (in whatever timeframe), each bar will tell a small proportion of the story, and when each newly completed bar's information is put into context with the previous story, it continues to explain more about what is going on between the forces of supply and demand in this market.

cheers