Distribution example on the USDJPY market

Distribution example on the USDJPY market

This is a small-scale distribution on TF 1h.

1) Buyers receive increased profit from rising prices. Everyone wants to be buyers. However…

2) Look at the dynamics of prices and the relationship to volumes. Growth slows, but volume remains high. EVRT. This means the resistance (by professional Limit sell orders).

3) SB. Supply Bar after a bar of indecision. Selling pressure confirms the weakness at 109.40.

4) After this elegant SLKB, the market receives a bullish momentum.

5) However, look at activity on growth after SLKB. This is no demand. The Chart says it is too expensive to buy.

6) However, inexperienced traders enter the long. Perhaps they use the signals of their lagging indicators.

7) The trap for buyers slams. The market drops sharply at high volume. This is SB, as well as a bearish change in the character of market behavior.

8) Wave ND.

9) Wave S.

10) Buyers (they were recently in the majority) close at a loss.

Actually, you can play a short-term advance. In favor of this idea you have minor bullish arguments:

11) Bounce from the downward channel line
12) Activation of stop-loss buyers at a level that shows a blue thin horizontal line.

But buying is a high-risk idea as there is a zone of weakness on top. Assess your chances.

Hope this review has been helpful, thanks for reading.

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