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The Wick Phenomenon: How and Why Big Wicks Get FilledIn trading, wicks on candlestick charts represent the highest and lowest prices during a given time period. Long wicks can often be seen as a sign of market indecision, but they also tend to get filled by subsequent price action. This phenomenon occurs frequently and can provide valuable insights for traders looking to capitalize on price movements. In this article, we’ll explore how and why big wicks get filled through practical examples. Understanding Wicks and Their Significance Wicks, also known as shadows, appear on candlestick charts when the price moves significantly above or below the opening and closing prices within a specific time frame. A long upper wick indicates that prices were pushed up but then fell back down before the close, showing selling pressure. Conversely, a long lower wick suggests that prices were driven down but then recovered before the close, indicating buying pressure. Usually, at least 50% of the wick will be filled, and sometimes the entire wick will get filled before the reversal happens. Why Do Wicks Get Filled? 1️⃣Market Psychology: Traders often see long wicks as areas of interest. For instance, if the price reaches a high but then falls, traders might anticipate a retest of that high. 2️⃣Liquidity Zones: Long wicks indicate areas where a lot of trading activity took place. These areas are often revisited as the market seeks liquidity. 3️⃣Mean Reversion: Prices tend to revert to their mean over time. A wick can be seen as a deviation from the mean, and the subsequent filling of the wick is part of the reversion process. How To Trade It? It all depends on your trading plan. Here are some options: Aggressive traders can buy/sell immediately after the wick has been formed. Semi-conservative traders can look for a reversal pattern on a lower timeframe to confirm it. Extra conservative traders can wait for the candle with the wick to be broken from the other side before entering. Additionally, considering more confluences like key levels, market structure, and the overall trend will give you a better edge. Why Now? You might be wondering why I am posting this article now. As you may have noticed, we had a dip yesterday, giving us a practical example on many altcoins and stocks. For this example, I have chosen DOGE, 4H chart. I hope you like the content and found it useful. Are you taking wicks into consideration in your trading plan? If yes, how? If not, why? What would you like me to discuss next? Always remember: 📚 All Strategies Are Good; If Managed Properly! ~Richard Nasr
by TheSignalyst
28
VWAP explanation, description and usage examples.Hello Traders:) Enjoy this small tutorial about VWAP 1. Definition: VWAP is a popular technical indicator used in trading to assess the average price at which a security has traded throughout the required time range, weighted by the volume of each trade. It provides a reference point for traders to evaluate whether they are buying or selling at a favorable price relative to the average market price. 2. Using VWAP: - Trading Decisions: Traders use VWAP as a benchmark to make informed trading decisions. They may aim to buy when the current price is below VWAP, indicating a potential value opportunity, and sell when the price is above VWAP, suggesting potential overvaluation. - Order Execution: VWAP can help traders with large orders execute trades efficiently. By splitting the order into smaller portions and executing them at intervals close to the VWAP, traders can minimize market impact and obtain more favorable prices. - Identifying Trend Strength: VWAP can be used in combination with other technical indicators to assess the strength of price trends. When the price consistently stays above VWAP and VWAP slopes upward, it suggests a strong bullish trend, and vice versa for a bearish trend. 3. Different Types of VWAP and their purpose: - Intraday VWAP: This calculates the VWAP over a single trading session, typically from market open to close. - Rolling VWAP: It calculates the VWAP over a specified rolling time period, such as the past 20 days, providing a longer-term average. - Volume Profile VWAP: It calculates the VWAP for specific price levels within a range, giving insights into the distribution of volume at different price levels. - Additional option available on TradingView: Fixed Range Volume Profile. We can set the VWAP from literally any time and select only part of the intraday session. Useful, for example, to track your VWAP trade from the start of our trade. This allows us to determine the strength of the trend during our open trade. 4. Settings for Different Purposes: - Timeframe: Traders can choose different timeframes for VWAP calculations based on their trading strategies. Shorter timeframes (e.g., 5-minute or 15-minute) provide a more granular view of intraday trading, while longer timeframes (e.g., 1-hour or daily) capture broader trends. - Volume Weighting: Traders may consider using different volume types, such as total volume, buy volume, or sell volume, depending on their specific objectives and the information they want to incorporate into the VWAP calculation. 5. Visual Possibilities: VWAP can be plotted on trading platforms as a line or a ribbon overlaying the price chart. It is often displayed alongside other indicators, such as moving averages or Bollinger Bands, to provide additional context and facilitate analysis. 6. Additional Ranges of VWAP: - Standard Deviation Bands: Traders may add standard deviation bands around the VWAP line to identify potential overbought or oversold conditions. These bands help highlight when the price is deviating significantly from the average and can signal potential reversals or mean reversion. - Multiple Timeframe VWAP: Traders may plot VWAP calculations for different timeframes on the same chart to gain insights into intraday and longer-term trends simultaneously. This allows for a comprehensive view of price dynamics across different time horizons. Remember to adjust the settings and interpret VWAP in the context of specific trading strategies, market conditions, and the characteristics of the securities being traded. Additionally, it's recommended to backtest and validate any trading strategy before applying it in live trading. If you enjoy this tutorial please follow for more content and live trading:) At the end example of how I am using VWAP with Heikin Ashi on BTC:
BITSTAMP:BTCUSDEducation
by Vezzeris
2
Fundamentals of Elliott Wave Theory + Briefly about the typesThis wave theory is based on the psychology of groups of individuals and statistical patterns. Every market decision is generated by meaningful information and simultaneously generates meaningful information. Each transaction being a result, becoming known to investors, joins the chain of causes of people's behavior (not news drives prices). The price movement in the same direction as the trend of a larger scale develops in 5 waves. Correction - reaction against a larger trend, developes in 3 waves Imagine a mango plantation. At the initial period, there is a bullish trend on the plantation stock exchange, which is obvious to the rational majority of mangoes (1/4 of the 3rd wave or 1/3 of the 3rd wave). Because of the confidence that tomorrow will be better, some very rational fruits began to borrow a little in order to earn a little more. This action of very rational fruits caused a faster increase in stock prices (because there is more demand). After learning about the "easy" success, the less rational mango decided to do the same, but since it is not very rational, it invested more. This pattern continued to the most irrational fruits. At the same time, with an increase in the circulation of capital (or monetary base), the borrowing rate falls (because there is a large supply of money in the market => corporations are valued more, they can issue more bonds => receive more money for business development (and not only)(This development is planned at a low rate => zombie corporations appear, and more risky projects are also being taken (not only by corporations, but also by people))). Spending by an average citizens also increased. When speculation, fraud, financial crimes reach a noticeable scale, rational mangoes will start to short, other mangoes will think - Why is this rational mango shorting (the hypothesis of an efficient market)? => The 4th wave will begin (little by little the fruits will begin to notice what is happening). When we reach the end of the 4th wave, the most irrational fruits begin to enter the market because of this, the 5th wave occurs ( the deceived themselves found pleasure in deception), At the end of the 5th wave, most likely, some famous fruit economist would ask the fruit society - what's going on? => panic will begin, because everyone will suddenly want to short + "stops" will work => correction will begin. Waves - more details Diagonal triangles (wedges) are the only 5-wave structure aligned with the main trend within which wave 4 almost always invades the price territory of wave 1. In rare cases, a diagonal triangle may end with a truncation (form 3-3-3-3-3).The final diagonal triangles (Appear first of all in the 5th wave at those moments when the previous movement has gone too far and too fast)A small part of the final diagonal triangles appear in the wave C at the A-B-C models. In all cases, they are found in the final waves of larger models and indicate the exhaustion of a larger movement. Triangle (3-3-3-3-3)-three tapering variants (ascending, descending and symmetrical) and an expanding variant, reverse symmetrical. Triangles always occur in the position preceding the last of the acting waves in the model, the degree of which is one more, in addition, a triangle may appear as an acting model in a corrective combination, but even then it usually precedes the last acting wave in the model, the degree of which is one more than the degree of the corrective combination. When it appears on the stock market in the position of the 4th wave, then the fifth - fast -> protracted. Growing impulses of degrees above the intermediate, appearing after triangles in commodity markets, usually turn out to be the longest in the sequence. Alternation — At the next appearance of a wave similar in nature, one should always expect a different form of it. Depth of corrective waves - corrections tend to show a return of prices to the price range of the previous fourth wave ( a lesser degree), usually to the level of its end. If the 5th wave of growth is stretched, then the subsequent correction will be sharp and will find support at the minimum level of the wave 2 of stretching (Sometimes the end of the correction, but in the some cases — the end of wave A => C wave). Equality of waves (two waves in a 5-wave sequence will tend to equality in time and magnitude (unstretched). Puncture of the upper boundary - If the volume has decreased, then the wave will end at the level of the upper boundary or will not reach it. If the volume is significant and the 5th wave approaches the upper trend line, a puncture is possible (near the puncture point, the 4th wave of a small degree can make a sideways movement). In the investment field, it is more important to choose the moment to buy/short/sell than a certain paper. The wave principle is to some extent applicable to individual stocks, but counting waves for them is often confusing and has little practical significance (because the sea of drops owning registered shares is mass psychology, and stocks are one independent drops)(On average, 90% of all stocks move down with the market, 75% - up). The best Elliott models are generated by important long-term breakdowns of stretched lateral movement models. The impact of news An important analytical question is not in the news, but in the importance that the market attaches to the news.((1 and 2 — fear and discouragement, 3 and 4 -favorable news, 5 — less favorable) at the market peak, the fundamental background remains rosy or even improves, but the market, despite this, turns down. Negative fundamental conditions begin to increase again after the correction has already passed a significant part of its path. Practice News — lag behind the market in time by one or two waves Limitations of wave theory Low liquidity. Incidents not characteristic to the free market. Initially impossible business models Since many people see the same wave in different ways, we must share our knowledge and views with each other - it is necessary to become very rational fruits.
NASDAQ:METAEducation
by loco_mango
single timeframe layoutan idea of how I look at indicator plots without harming my eyes or patience the S&P is clearly determined to hang onto the true range +1 level and go no higher it has as of this post just managed to climb above the rsi and standard deviation 60 and +1 levels, which has been sold back under the aforementioned levels repeatedly over the past few days risk is s&p runs away to the upside; closing out the short/going long if we get halfway to the next set of upper levels would be wise this example also shows you how the levels of the 14 period rsi, standard deviaton and true range indicators of an input period of 20 are all extremely similar and the confluence of these indicators can stop even the ES contract from natural price discovery for almost a month
CME_MINI:ES1!Short
by j1O9SB
"Price Action with Volume" theory on, Bitcoin!I am not going to write here in Pages. Let's move the strength topic. This is " Price Action with Volume theory ". Relation of Congestion vs. Volume examination: Herein, 4 CONGESTION found throughout VOLUME declined. 5th Congestion expected because of weekly candle gooing to closed today with both sides of the legs. All the Congestion has low volume and after the breakout , we are seeing a single directional move. If we are at CONGESTION phase, we will see a surge in price after the breakout . In the current case, we have more volume compared to all other Congestion phases. If you LIKE this idea, You will get Real-Time with lower timeframe NOTIFICATION trable update.
GEMINI:BTCUSD
by Trade-Technique
245
Learn to discern institutional demand levels (Example)Is it true that the Forex Market is manipulated and controlled by a handful of banks and market makers? If so, how can we identify when they manipulate the forex markets and is it something that requires access to sophisticated tools and secret contacts? Well, let’s begin by getting a few facts straight. Firstly it is true that the forex markets are manipulated and while you don’t need any sophisticated tools or secret contacts to understand how this happens, identifying when it happens is not easy for the majority of retails traders. What most traders fail to appreciate is what the financial markets truly are and how to trade forex properly. The Forex markets is a place where buyers and sellers come together facilitated by brokers and market makers who look to profit by making a commission for each transaction. Just like any other market, buyers and sellers can only come together if there is a middleman facilitating the transaction. This middleman in the case of Forex is the market maker, and their job is simply to match buy and sell orders for the best price possible and earn the most commission that they can on each transaction. How forex works – Buyer & Seller Counterparties Every trade that is executed in the forex markets has to have a buyer and seller and when this takes place then we have a trade. This normally happens in a fraction of a second electronically but in essence, each time you enter a buy trade you are being matched with someone who is happy to enter a sell position and take the opposite side of your trade. If this doesn’t happen then there wouldn’t be a trade. Why is this so important? Because it highlights the problems that large banks have which small traders don’t. Any retail trader is able to place whatever position size they wish into the market without ever fearing slippage or bad fill. Granted slippage may take place during high impact news items such as central bank announcements but on the whole, most of the executed trades are done instantaneously. Now if you’re a retail trader trading 1 standard Lot then you won’t have any problems with being filled at the price you want. Imagine you’re trading 100 Lots or 500 Lots or 1000 lots, these are larger positions to put into the market at any one time and it’s much more difficult to find someone to take the other side of the trade at the exact price and the exact time that you want and therefore might not be filled at a great price. Well, what could you do in such a situation? You have one of three options: Option 1: You could either bite the bullet and get executed at whatever price you are able to get, the only problem here is that you won’t be getting the best price possible for your trade which eats into your profits. Option 2: You could wait for the price to get to the price level you want so that you get the best execution possible and buy or sell at a much more favorable price – this is great but what if the price doesn’t get to the level you want for you to execute your trade? You will either be forced to walk away without making a trade or be forced to take whatever price you can get if doing the trade is absolutely essential Option 3: You force the price to get to the level at which you want to transact by cleverly manipulating other smaller traders to push the market in the direction you want it to go. Once you get the price to the level you want then you can carry out your transaction. How can you do this? By taking massive positions and exercising your muscle. This is similar to when large companies and conglomerates bully smaller businesses out of the market through aggressive competition. Best Options… Which option do market makers and those with large orders take? Option 3. This is how manipulation works in simplicity. The big players who have the money to move the market in the direction they want, do so on a regular basis. What’s more, they have no option but to do this because unless they can manipulate the market then they won’t be able to execute their large orders. Think about it – what causes the price to move up? An imbalance of buy and sell orders such that there are more buy orders than sell orders which means there is more demand for that particular currency pair than there is supply. Conversely, what causes the price to fall – a larger build up of sell orders than buy orders such that supply outstrips demand thereby resulting in price falling. Now if a market maker comes into the market with a massive order to buy a currency, what will happen to the price? It will start to rise. This means that the market maker is bidding the price higher and so forcing himself to keep buying at higher and higher prices until their order is filled. This hardly sounds attractive or even smart for that matter as the market maker is in the business of maximizing their profits. So what is the alternative? The only alternative is to buy or sell in a hidden way without alerting all the other traders as to what is really happening. How does this take place? By buying into selling pressure or selling into buying pressure. In other words, what a market maker will do is do the opposite of what they intend to do in order to push the price to their desired level. What is a market maker? It is a financial intermediary set up with the sole purpose of matching buyers and sellers together to make a commission in the process. So let’s say a large European conglomerate wants to buy out a US company for $10 Billion. It can’t just go to a money exchange bureau or the bank to change that amount of money. Most likely it will go to a currency broker or a large bank who will complete the transaction by going into the money markets via their brokerage arm. Once the market maker receives the order for the transaction, their job is to convert the conglomerate’s money from Euro’s into USD. They will, therefore, be trading the EUR/USD pair and selling Euro’s and buying USD. Since this transaction of selling Euros and buying USD happens instantaneously, what the market maker needs to do is get the highest exchange rate they can for Euros to USD. The way they do this is very important as it affects the amount of commission they stand to make. In this example, it’s in the market maker’s interest to achieve the highest interest rate they can so they do this by driving the exchange rate higher first and then starting to sell the euros against this higher price. They continue to sell just as everyone else is fooled into thinking that price is going to continue higher until eventually they sell all the euros and convert into USD and complete the transaction. What happens now is that since the selling pressure has become stronger than the buying pressure, price starts to fall rapidly and everyone is left scrambling to get out of the trade once they find out that they are wrong. The reason people are left scrambling is that as a result of giving a false signal of the market starting to move up, the market maker manages to entice other traders to start buying heavily. Once the other traders find out that they were wrong in their assessment of market direction, then the main focus becomes to get out of their positions quickly. This is what we call the trap and it happens on a weekly basis in the Forex market.
by UnknownUnicorn3442968
2
Eduational: Example of a descending broadening wedge. A descending broadening wedge is bullish chart pattern (said to be a reversal pattern). It is formed by two diverging bullish lines. A descending broadening wedge is confirmed/valid if it has good oscillation between the two upward lines . The upper line is the resistance line; the lower line is the support line. Each of these lines must have been touched at least twice to validate the pattern. NB: a line is said to be "valid" if the price line touches the support or resistance at least 3 times. This implies that the descending broadening wedge pattern is considered valid if the price touches the support line at least 3 times and the resistance line twice (or the support line at least twice and the resistance line 3 times). A descending broadening wedge does not mark the exhaustion of the selling current, but the buyers’ ambition to take control. The divergence of the two lines in the same direction (increase in price magnitude) informs us that the price continues to fall with movements that are increasingly low in magnitude. The sellers manage to make the price rebound on the resistance line but lose control after the formation of a new lowest point. The highest point reached during the first correction on the descending broadening wedge’s resistance line forms the resistance. A second wave of decline then occurs of more magnitude, signalling the sellers' loss of control after a new lowest point. A third wave forms afterwards but the sellers lose control again after the formation of new lowest points. During the formation of a descending broadening wedge, volumes do not behave in any particular way but they increase strongly when the support line breaks. source:Centralcharts
Education
by UnknownUnicorn3442968
5
XAUUSD WYCKOFF DISTRIBUTION EXAMPLEHello traders, we would like to share some value knowledge, about structure based mostly on Wyckoff schematics. As an example u have marked up area identify by us as Wyckoff distribution schematic to help u get deeper understanding about markets and printed structure itself. Please, scroll left and right chart to see multiple examples of accumulation and distribution schematics. Hopefully this will help u get some breakthrough in your trading journey. God bless u all.
FOREXCOM:XAUUSDEducation
by Snipers-Academy
2
GBPNZD WYCKOFF SCHEMATICS EXAMPLESHello traders, we would like to share some value knowledge, about structure based mostly on Wyckoff schematics. As an example u have marked up few areas identify by us on multiple TF to help u deeper understanding about markets and printed structure itself. Please, scroll left and right chart to see multiple examples of accumulation and distribution schematics. Hopefully this will help u get some breakthrough in your trading journey. God bless u all.
Education
by Snipers-Academy
GBPJPY WYCKOFF SCHEMATICS EXAMPLESHello traders, we would like to share some value knowledge, about structure based mostly on Wyckoff schematics. As an example u have marked up few areas identify by us on multiple TF to help u deeper understanding about markets and printed structure itself. Please, scroll left and right chart to see multiple examples of accumulation and distribution schematics. Hopefully this will help u get some breakthrough in your trading journey. God bless u all.
Education
by Snipers-Academy
EURNZD WYCKOFF SCHEMATICS EXAMPLEHello traders, we would like to share some value knowledge, about structure based mostly on Wyckoff schematics. As an example u have marked up few areas identify by us on multiple TF to help u deeper understanding about markets and printed structure itself. Please, scroll up chart to see multiple examples of accumulation and distribution schematics. Hopefully this will help u get some breakthrough in your trading journey. God bless u all.
Education
by Snipers-Academy