Traders Laboratory - View Single Post - The 2 bar reversal
View Single Post
  #3 (permalink)  
Old 09-05-2007, 02:33 AM
Anonymous's Avatar
Anonymous Anonymous is offline
Anonymous has no status.

 
Join Date: Jan 2007
Posts: 458
Thanks: 13
Thanked 94 Times in 57 Posts
Re: The 2 bar reversal

I do not want to steal this thread, but since TG uses VSA, I would just point this out.

The first bar in this 2 bar reversal pattern has volume less than the previous two bars, closes lower, closes on its low and has a narrower range than the previous bar. Simply, It is No Supply.

Note two other points:

1. This No Supply is in the range of a High Volume Candle. That is within the body of a high volume WRB to be exact.

2. The close of the No Supply candle is supported by the opening range.

Understanding volume and support/resistance are keys to successful market trading. As price moved down towards that area (opening range) it becomes a good time to pay attention. It does not make much sense to go long, or short, just because price is moving towards an possible support/resistance area, but it does make sense to start looking for Smart Money involvement, or lack thereof.


Last edited by Anonymous; 02-07-2008 at 07:41 AM.
Reply With Quote