Notes on price movement

Generally if you look at short term time frames you have 3 kinds of movement.

1. Movement caused by absorption (price rejecting a level)
2. Movement caused by strong buying action (buyers stepping in at a level)
3. Chaos, alternate buying selling of equal strength or short term trends without follow thru. (This is choppy — impossible to trade)

At the higher time frame, there tends to be larger movements (levels get established), or you see symmetric motion (channels/pullbacks/etc). The history of the movement is important — consistency allows for safer entries (trend days/etc).

Generally the action after a purple marks the next stage.

Key points on higher time frames:

1. Balance between cycles: action can be clean, with single reversals mean revert around extremes. Dirty/many dots are generally trending. And there is not predictive power in any extreme reversals. You can see the long term balance between market buying and price motion changing over time. Good spots to look for a low of the day when the balance between PriceNormal and Quick has gotten closer and closer and you have clean reversal with PriceNormal < Quick -> but they are close. Generally a trend reversal can occur when the retest of that quick market buying level has caused a price action where it’s much higher.
2. A higher time frame dot is generally composed of basically some amount of purple selling -> purple/yellow buying after. That moment can be a reversal, but it also can simply be a strong covering moment that pauses and then continues selling (the price motion after the action is definitional to what happens next).
3. Sometimes a dot is simply just a couple of purple cycles on a 100 tick time-frame and then normalized a bit however.
4. Cycle of strong sell -> strong buy -> makes it past zero but no green (-10) before back into strong buying is a strong trend reversal
5. Some price action is simple: look for the reaction at a level, wait for the retest at that level and buy at absorption then watch for the reaction to occur, and hold on if it does or dump.
6. Strong 100 tick price action can just be pull-backs on higher time frame -> NOT reversals.
7. Entering on retest can be very effective in general for higher percentage successful entries
8. A couple purples that take price nowhere against trend can really give away the strength of the future epic trend