Just wondering about the theory of bounces…what is going on in the market/traders’ minds?
1 Sellers get in
2 Rejection off support
[B]3 Who is selling here and why?[/B]
4 Bounce off support (classic time to buy)
5 Profit taking from buyers?
6 Some buyers stay in and bounce of recent resistance turned support line.
7 Profit taking buyers close turning into sells.
The chart does not show enough information you need at least volume to even begin to make an informed analysis.
Forex, volume is only the broker’s volume so it doesn’t mean anything.
yeah…volume is very hard to measure in a liquid market, like forex.
SanMiguel, tick volume rather than contract volume has some use, though aggregate tick vols from a no. of brokers (Esignal) is more accurate than your own broker’s vol.
As to why/who sold at what point, you’ll never know but bear in mind
How about showing RSI etc
An informed analysis is a completely subjective term. One could argue that by looking at nothing but price alone they could formulate an informed analysis.
Yes you are right it is subjective. TA is subjective where one would use a variety of visual tools and diagnostics to better assess whether the price is likely to rise or fall, but as we know it doesn’t always hit the nail on head in terms of price and/or direction its an intelligent estimation.
However I find comparing at least four different timelines helps. The first two are compulsory such as my [B]“wide angle”[/B] Weekly and Daily Intervals for absorbing news impact on prices and then more focused intraday 1 min v 15 min whatever makes you feel comfortable. As a result of using different chart intervals I think its possible to make an informed decision on whether the market has over or under reacted to price change. I think we can all agree that at the end of the day its all about psychology and must people are likely to think that price will rise, its the smart ones who sell and create the downward pressure knowing that the majority will prop it up again creating a sideways channel until the market is fully decided and then the smart money creates the breakout.