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difference is that - exhaustion can exist only in relations to the future or past. You say buyers exhausted - but who putting the BIDS? Buyers. So are they exhausted? For every buyer there is a seller. No other option. This is transaction way of thinking.
Compare to what you say LACK? You know the standart ammount of transactions? Or you compare to the previous ammount of transactions? if somewhere somehow transaction1Vol<transaction2Vol this does not mean this is exhaustion. If you think this is exhaustion when you EXPECT the opposite. If you expect you have expectations and you trapped within your mind trap. What if after "buyers or sellers exhaustion" market will continue even stronger to move where it was moving? Buyers or sellers refreshed?
Reaction does not works with the past. ANy reaction may be. You do not expect only one variant. You do not expecting.
You going with what market gave you.
This is YOUR way of thinking. Market goes higher and volume of transactions dries out. There is a lack of transactions.
Buers exhausted. Waiting for short. Aha. I am in. Short short short. Here we go as i expected. BOOM market goes higher and volume increases.
This is my way. Market goes higher and volume of transactions dries out. There is a lack of transactions compare to lower prices
Buyers/Sellers NOT INTERESTED to trade as volume dries out. I do not know where they want to go.
All i know THEY DO NOT ACTIVE here. Not that much sellers or buyers to stop out -not that much price will move.
This is NOT a FALSE breakout as you can see. No one play this game this is why there is not movement. Market goes down and i see Vol increase - this means now we have fuel buyers or sellers will be stoped i do not know. I am flowing with selling activity as it moves price down. Sudden i see sellers stop to HIT BID and i am MANAGING my trade.
What will happen next i do not care. I have +1 tick and trade is over.
This is 2sided way of thinking INCLUDING every part of system. This is why you should watch MONOTAPE and not much
of you doing this. THis is why never you will learn to think in the correct way about order flow.
Frow away all FUTURE and think in 1 second frame. Only this. 1 ROW of your tape. Does it tells you what will be?
No. Try this exercise - PUT ONLY 1 ROW at your SMALL and BIG tape and try to watch for 2 hours with a chart.
Your brain will be not able to think in a patterns way and will be FORCED to think in another. Transaction way
Reaction is the actions according to the INFORMATION that CHANGES existing percieved PICTURE of a market or has IMPORTANT meaning for PARTICIPANTS. Anything can be reaction - depends on a point of view. I am watching everytime i enter how market reacts to my entry even than my entry does not change anything.
@bloom, I posted this elsewhere but leaving this here as you follow Dr Hawkins. After using path to surrender, I came across another beautiful work by Michael Singer, essence is the same but offers another perspective. Checkout The untethered soul if you havnt already, beautiful work. Audio version is a pleasure to listen too.
The only way that I have seen the Tape used successfully, is by watching the Tape at Critical Support / Resistance Levels.
If you see Selling at Support level, the price my break down . If you see Lots of big buyers at Resistance, the price may break up. You could also use the NYSE TICK at S/R Levels for the same idea
The problem is for every seller there is a buyer
If you see large buyers than you see the large sellers too )))
If you see large buying at resistance you see also large sellers at the offer. Price may reverse or brake 50/50
If you see selling at a support level you see large selling to large buying. Price may return or brake. 50/50
What is >50% the chance is than you see LARGE buying or selling, price will go SIGNIFICANT
Nothing more