Does anyone know a way to check if price went high first or low first easily? I suppose if you change to a smaller time frame say from d1 to h4 you could figure it out but is there an easier way to check this out? That means i want to check say the price action for 1 day i want to know if it reached it’s highest pt for the day first or it’s lowest pt first to see if there’s a trend change.
Is there a correlation for this? Let’s say suppose price has been reaching a high for the day before the low and suddenly one day it goes low first before going to a high is this an indication of perhaps a trend change?
Well I will try and answer what I think you are saying. Price will ebb and flow throughout the day a 15 min chart compressed can give about 5 days of price action. You will look at the higher time, support and resistance to watch for a shift in the market. Corralated pairs as the Cable and Fiber compared to the US dollar index is easier to match shifts in the market.
This is where price action (PA) is used to analyses the strength of a move from a previous high or low, known as levels of support or resistance. The only issue with these high/low levels is deciding if they are significant to be traded from, or if they are random levels of little significance. Candle types will answer your question as they help to show clean levels of rejection. Candles that I look for as a matter of interest are hammers (candles with wicks much larger than the body of the candle), and T-bars (candles where the open and close price are equal but they have a large wick either side). Both these candles have the same thing in common, which is the size of the wick relative to the body. These wicks show fast rejection, and if this rejection has happened at a previous high or low then you can say with a higher degree of confidence that there may be a bounce in price. However, this is not a hard and fast approach to take as you have a lot of other factors to take into consideration, such as how many times previously has this level been tested, if it has been tested a few times you need to ask yourself “will it hold again and again”, the answer is going to be no more times than not. If it was always yes then we would always be range bound with no trending markets.
So, candle formation will help you decide if its the daily high or low that holds more significance.