Scenario 1 : Eating Thru Resitance
when u notice that a good sized order on the backside gets hit frequently with good size
and it gets eaetn up without or just marginal new money coming in @ backside ..
then u consider to join the piranhas and put in a laybet @ 3,70 .. sometims it goes so fast that u will miss the train.. but hey.. it doesent mather the markets will be therfore evere and the next setup is just arround the corner ;)
so we see 50 print @3,70 wich we say is an average price.. /is always relative to the current market) we see that the backside doesent get a refill.. we stand with 350
we see 100 print a good size and the backside does nothing we stay with
250 @3,70 and we notice that the lay queue increased in size at this moment
we could put in a lay bet @3,70
again we see a nice sized print @3,70 150 get matched and we only stand with 100 left
ie. there is no new supply coming in @this level.. no supply against an increase in demand..
this level has to break ! ;)
and bam the remaining 100 have been trading and we break thru the resistance level..
Scenario 2 : Absorbtion (Compressed Bounce)
we can also see a bounce off that resistance level @ 3,70 we then have to judge the bounce, is it supply that overcomes demand? , does supply gets absorbed ? ie do we hold gains ?even if supply is coming in.. ?
on this battle something like this can happen
lets say we bounce off 2 ticks , but now focus on the money on the backside its not that big noir strong..
and we have no follow thru..
next we trade back up to resistance.. we even test resistance with a print @3,70 of 50
and please look at the good size on the layside.. compared to previous size on backside
now we bounce off again but this time only 1 tick lower
and again the backside size is small but layside even increased again.
and eventually we trade back to 3.70 with big prints and an increase of size on the backside..
time to think about a lay bet.. and a breakout to follow
so whats happened here is that the remaining supply at this level.dried out and got absorbed by the demand wich on the same time increased..
this u will notice on how far we bounce back and if we move back up we should bounce off
each time one tick or two lower then before..
aswell as demand should have signs of strenght ,while the selling pressure should be weak
and should get weaker the more we test the resistance level... this may go on for awhile..
but its a good scenario as u could get in a lil lower then @ resistance..
Scenario 3: Holding Gains
here is a scenario wich on first sight looks like supply is overcoming demand at resistance
but only on first sight! ;) as u also need to focus on whats happening to the layside when big prints hit the market..
as if u dont see it on first sight its doesent mean that there is no size (ice berg)
we see an increase @ resistance 3,70 of 1500 wich is big , we also notice
a print of 200 @3,65 but we still stand lay with 250 , so there is probably
more money on th layside then first excpected..
another big print of 500 and we lost some money on the laside but we still stand with 100
(u can often see that some money gets temporarely eatne but then we have a refill pretty fast a sec. later)
there u go we have a refill and stand 300 @3,65 .. so even thou we have big prints hitting the layside.. we are holding gains .. this is a n indication that there is size on the layside and a sign of strenght as the layside is able to absorb the bomabardement of the backers
another big number hits the market as we print 700 and we still stand with 300 @3,65 ..so this is the last confirmatinn we need.. and we would get ready to lay.. as soon as we see prints of good frequence and size on 3,70
no the attack starts and we see a big print of 500 @ 3,70 while the size at lay increases and the backside looses size .. this could be the start of a frantic and fast eating thur the 1000 @3,70 wich would unfold in a simillar way then scenario 1 we spoke about...
so whats happening here is that there is more size on the layside.. wich isnt revealed and the heavy selling pressure gets absorbed.. wich results in an inbalance in favour of demand.. so if there is size that can keep up with supply and whithstands its attacks.. till the supply dries out and demand increases at the same time.. there is only one way price will go.. and that is up !
Scenario 4: The Lure
another scenario would be . if u see lay orders get pulled to lure in backers .. ie to make the marketlook weak at resistance.. wich is a part of an article i work on in the future,, about spoofing and games played on the ladder .. there is alot to tell... ;)
so let say someone pulled the 250 from 3,65
and u see that someone jumps in on the backside with 100
and as soon as this happens it gets hit and u see another nice size on the layside
the 200 get pulled again.. and now a backer moves its order from resistance 3,70 to 3,65
and yet again as soon as this happens someone takes the 300 @3,70 and we stand again with a good size on the layside..
if u see that money gets pulled and as soon as a backer got lured in.. and that back money gets matched with size.. all the time ..
this is a signs that someone with good money and prob bigger pockets want to buy there
and therfore u should to ;)
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