To start successfully find good trades, we should answer these questions from small check-list:
1. Who is responsible for price action? Strong holders or weak holders? (price will go in the favor of strong holder)
2. Is market oversold or overbought on the way up? (in the first case we have weak short sellers, in the second - weak long bueyrs)
3. Is market oversold or overbought on the way down? (in the first case we have weak short sellers, in the second - weak long buyers)
Remember, there are not only situations when we have "win-lose" situation and "strong-weak" market configuration, we can also have "strong-strong" market configuration, when market is careless about retail traders and their positions (this is when we have elongated trends).
As a trader, you should know how to read inventory and to play on the strong side.
1. Who is responsible for price action? Strong holders or weak holders? (price will go in the favor of strong holder)
2. Is market oversold or overbought on the way up? (in the first case we have weak short sellers, in the second - weak long bueyrs)
3. Is market oversold or overbought on the way down? (in the first case we have weak short sellers, in the second - weak long buyers)
Remember, there are not only situations when we have "win-lose" situation and "strong-weak" market configuration, we can also have "strong-strong" market configuration, when market is careless about retail traders and their positions (this is when we have elongated trends).
As a trader, you should know how to read inventory and to play on the strong side.
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