If price paints just little bit outside of our PD arrays, that’s fine. Its simply a mohawk. If we get a mohawk and then price closes a body inside the PD array, nothing has changed in terms of narrative.
💎For entry we use the last down close candle.
💎When you read OF and you look for down candles to offer support, you use the entire range of the 2 down candles.
Reclaimed OB is when price returns to it and offers support.
❗As a new student there are some basic rules that we need to follow. Don’t trade Mondays and don’t trade Lunch hour. Trade the 8:30AM to 11:00AM Morning session and the Afternoon session 1:30PM - 4:00PM. Once you are more experienced and you know what you are doing you can trade Mondays and Lunch hour as much as you like.❗
💎There are a couple variations of Balanced Price Range.
In the beginning of the lecture, we studied the fist variation. This over here is the 2nd where BPR forms with just 3 candles. 1 single pass down, pause, 1 single pass up. 💎We use the highest and lowest extreme between the 2 imbalances.
A BPR has a definitive boundary which we don't want to see breached on a candle's body. We don’t want to see candle close below EQ. Wicks are allowed. They do the damage.
A lower movement in the dollar is considered risk-on. When the dollar is lower, all foreign currencies are higher, and it gives the freedom for stock indices to go higher, knowing that the dollar index and index futures are not lockstep. Every point higher on indices is not a lower move in the dollar. It's much like bonds and the yields. The yields will move and they'll cause a long-term effect on foreign currency because they're going to chase that yield. But the yields can change and there's a delay between all of that shifting in the currency. It's not an immediate thing, just like the Commitment of Traders net trader positions. Just because the commercials are net long doesn't necessarily mean it's time for you to go long. So there are rules to all these things.
Why do we expect that Imbalance to remain open? Because we have another BPR. Just like the one we reviewed just now. The only difference is that, there are more candles in between. That is simply time distortion.
When we have BPR, price should never come down and through the midpoint EQ of that range. That means there would be a small portion of this Gap left open.