Hello all,
Second time I am starting a thread here. I have been studying exhaustion lately, as I think if I could find a reliable way to spot it I could dramatically improve my trading. So let me try to explain what i mean.
I consider exhaustion from an order flow point of view. Meaning simply this...(using a bullish example). When all those who wish to buy have done so and there is no one (in the immediate future) left to buy. You can use that conversely for a sell.
Why do I want to be able to spot this? Because I believe that when the buying has exhausted (on a long term or short term basis) that price will most likely reverse even for a short while until new price swings attract other participants.
Thus I am looking for a way to identify that condition in the price structure. I have looked at Large candles and some price patterns like hammers and shooting starts (affectionately referred to here as "pin bars") but do no see anything consistent. Likewise I have looked at oscillator divergence and again see nothing that is consistent enough to be called an "edge".
So my question to you is this: Do you look for or trade exhaustion? If so are you willing to discuss here how you spot it?
Second time I am starting a thread here. I have been studying exhaustion lately, as I think if I could find a reliable way to spot it I could dramatically improve my trading. So let me try to explain what i mean.
I consider exhaustion from an order flow point of view. Meaning simply this...(using a bullish example). When all those who wish to buy have done so and there is no one (in the immediate future) left to buy. You can use that conversely for a sell.
Why do I want to be able to spot this? Because I believe that when the buying has exhausted (on a long term or short term basis) that price will most likely reverse even for a short while until new price swings attract other participants.
Thus I am looking for a way to identify that condition in the price structure. I have looked at Large candles and some price patterns like hammers and shooting starts (affectionately referred to here as "pin bars") but do no see anything consistent. Likewise I have looked at oscillator divergence and again see nothing that is consistent enough to be called an "edge".
So my question to you is this: Do you look for or trade exhaustion? If so are you willing to discuss here how you spot it?
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