- Huge spike down - Selling climax in VSA?
- Price subsequently tries to make 1 or 2 more stabs down but fails to make significant lower lows. This indicates a weakening in selling pressure and often shows up as bullish divergence. The stabs down might also stop hunt previous swing lows, allowing pro money to load up longs.
- Price then breaks out of the pattern
Here are some chart examples:
It would be good if this pattern takes place at a HTF demand zone. It is also similar to a falling wedge pattern.
And now... I think I'm seeing something similar on USDCHF H1. It is still a small distance over a significant demand zone (blue area) so I won't be surprised if it takes another stab down into the zone first.
USDCHF H1 |
And here is the anti climax - I don't know how to trade this pattern! I guess some ideas might be to trade PA bars at the 2nd or 3rd stab down (aggressive), or trade the breakout (in which case I don't know where to put the stop).
Just something which I thought might be interesting!
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