This happens often. Not only on GBPUSD

This happens often. Not only on GBPUSD

Here are two GBPUSD charts. I will use them to provide an example of real market nature. If you will know the genuine cruelty of market character, it will be easier for you to create trading ideas. You will understand price movements more properly when your first question will be – who loses money on this bar?

Well, here are 2 charts:
The first one contains the order-book from the moment of 00:00 of 24/Jan/2020.

Note:
1] Buyers were in profits. The proportion had extremely sized. This is typical for market tops (stage of distribution). Why? Because these profits often turned into losses. Because the crowd often buy market tops.

But before slide down, the cruel market wants to make as many fools as possible. That is why sellers [2] should be knocked out from their positions. How? Look here [3]. Got an idea?

Switch to chart 2.

It contains the order-book from the moment of 24:00 of 24/Jan/2020.

Study this [1] move. Wide tail up, closing on lows. Who loses money on this bar?
Note:
[2] No more BUY-STOPs (stop-losses of sellers were triggered).
Position Book Confirms:
[3] – Not many sellers in good positions.
[4] – A lot of buyers Trapped. You will see how these bars will decrease in future amid price decline.

IMO. Market is prepared for Down move. Not financial advice ))

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