#PriceAction
Wanted to cover a quick write up on certain trends that trap traders with current PA.
The market has shifted higher consistently printing higher lows- higher highs all while short participants have entered short positions anticipating breakdown at every level.
Wanted to cover a quick write up on certain trends that trap traders with current PA.
The market has shifted higher consistently printing higher lows- higher highs all while short participants have entered short positions anticipating breakdown at every level.
Letβs cover this move
Open interest was hitting all time lows all while futures markets were trading below spot.
What does that means?
Longs were not entering the market but rather price was being pushed up via spot buying as a result you had declining open interest.
Open interest was hitting all time lows all while futures markets were trading below spot.
What does that means?
Longs were not entering the market but rather price was being pushed up via spot buying as a result you had declining open interest.
On a price action perspective:
Disbelief:
Short participants short the rally anticipating lower prices all while paying negative funding to keep their positions open and evidently getting trapped.
Disbelief:
Short participants short the rally anticipating lower prices all while paying negative funding to keep their positions open and evidently getting trapped.
Euphoric:
You ideally want to build a top that lures participants into longing at the same time you might see certain delta such as spot selling/funding flip favorings shorts etc.
These tops trap long participants who anticipate higher prices.
You ideally want to build a top that lures participants into longing at the same time you might see certain delta such as spot selling/funding flip favorings shorts etc.
These tops trap long participants who anticipate higher prices.
Conclusion:
Try to separate yourself when the sentiment is strong.
The markets goal is to trap funds while seeking higher liquidity.
As price trends ask yourself; what is it reaching for? Have we collected enough liquidity on the opposite end.
Give the market narrative.
Try to separate yourself when the sentiment is strong.
The markets goal is to trap funds while seeking higher liquidity.
As price trends ask yourself; what is it reaching for? Have we collected enough liquidity on the opposite end.
Give the market narrative.
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