Hello all,
Second time I am starting a thread here. I have been studying exhaustion lately, as I think if I could find a reliable way to spot it I could dramatically improve my trading. So let me try to explain what i mean.
I consider exhaustion from an order flow point of view. Meaning simply this...(using a bullish example). When all those who wish to buy have done so and there is no one (in the immediate future) left to buy. You can use that conversely for a sell.
Why do I want to be able to spot this? Because I believe that when the buying has exhausted (on a long term or short term basis) that price will most likely reverse even for a short while until new price swings attract other participants.
Thus I am looking for a way to identify that condition in the price structure. I have looked at Large candles and some price patterns like hammers and shooting starts (affectionately referred to here as "pin bars") but do no see anything consistent. Likewise I have looked at oscillator divergence and again see nothing that is consistent enough to be called an "edge".
So my question to you is this: Do you look for or trade exhaustion? If so are you willing to discuss here how you spot it?
Second time I am starting a thread here. I have been studying exhaustion lately, as I think if I could find a reliable way to spot it I could dramatically improve my trading. So let me try to explain what i mean.
I consider exhaustion from an order flow point of view. Meaning simply this...(using a bullish example). When all those who wish to buy have done so and there is no one (in the immediate future) left to buy. You can use that conversely for a sell.
Why do I want to be able to spot this? Because I believe that when the buying has exhausted (on a long term or short term basis) that price will most likely reverse even for a short while until new price swings attract other participants.
Thus I am looking for a way to identify that condition in the price structure. I have looked at Large candles and some price patterns like hammers and shooting starts (affectionately referred to here as "pin bars") but do no see anything consistent. Likewise I have looked at oscillator divergence and again see nothing that is consistent enough to be called an "edge".
So my question to you is this: Do you look for or trade exhaustion? If so are you willing to discuss here how you spot it?
Do more of that which succeeds and less of that which does not - Dennis Gar