A classic setup for finding trading opportunities
2024-10-13

Hi traders and investors! 

In a recent post, I talked about a classic setup. You can find the post below in the related ideas section. I decided to elaborate on it a bit more because this setup frequently appears across different assets, and certain elements of this setup are common in various trading methodologies. In this article, I used a bar chart because bars take up less space, making it easier to see other elements of the chart.

Take a look at the chart. The seller's move from the 52,550 level updated the previous local high. The bar with the highest volume in this entire buyer's movement is the bar from September 18. The 50% level of the entire buyer's movement lies within this bar (!).

Next, we see the seller's movement, and on October 3, a test is formed within the key buyer's bar, at the level of 59,828.11. The price didn't reach the 50% level (59,524).
The key seller's bar in this movement (the bar with the highest volume) is the bar from October 1. The 50% level of the entire seller's movement is within this bar (!).

Next, we see the buyer's movement, and on October 5, a test is formed within the key seller's bar, at the level of 62,484.85. The price didn't reach the 50% level (63,163.06).
Then we see the buyer's attack on the test level of 62,484.85 and the 50% level of the seller's movement (63,163.06), followed by the seller returning the price below the test level, accumulating volume for a downward move. After that, the local minimum of 59,828.11 was updated.

Then, the seller attacks the test level of 59,828.11 and the 50% level of the buyer's movement (59,524), and the buyer returns the price above the test level, gathering volume for an upward move. What happens next... we will soon see.

This is how the buyer's attack on the 50% level of the seller's movement looked on the 4-hour time frame. 

No differences whatsoever. Although, maybe I didn’t look hard enough. The key bar of the seller's movement intersects the 50% movement. First, there’s a test below the 50% level (test level 62,975), then an attack on the test level and the 50% level.

 Hope you found it interesting. 

 Good luck with your trading and investments! 
