Jump to content

Characteristics of Impulsive Move


Recommended Posts

Screenshot_20230821-190812_1.png.750d3d32875afbaaa913294ea75c9ac2.png

Impulsive moves tend to have three characteristics common among all of them. These three can help clue you in to when an impulsive move is starting, or in play. They are;

1. Large Candles (bodies)
2. Mostly of one color (green/.      bullish, or red/bearish)
3. Closes towards highs/lows of the move

Let’s examine all three points.

1) Large Candles communicate to us there is strong participation and order flow behind this particular candle. When you see large candles forming consistently in one direction, they indicate strong order flow behind them from the institutional side. Since the larger players are behind them, they give us a clue of the direction we want to take, essentially surfing the waves they (institutional) are creating.

Notice how in the above chart, the candles that stand out the most are the red ones, particularly the ones towards the top left, they are the largest in these entire series, communicating strong order flow behind them.

2) Mostly of One Color – this ingredient is also common among impulsive moves as it communicates something critical to us. More specifically, how the  bears were able to maintain control of the price action over time.

In the chart above you will notice in the down leg how bears had complete control of the market.

By maintaining control over time, the market is communicating who is the more dominant side because they are not allowing the other to take control of a candle for that time period.

It is important to look at price action not just based on structure of the candles, which is one dimensional. Price doesn’t just move in a vacuum, it moves in time, and HOW price moves over time can communicate a lot of information to us as traders.

3) Closes Towards the Highs/Lows of the Move – If you think about it, when the market is in a strong trending move, let’s say using a 4hr chart, and the candle that closed in the direction of the trend (in this case downtrend) has a very small wick, thus a strong close towards the lows, what does that communicate?
It should communicate that there is very little profit taking from the players behind that candle. If they were worried going into the close of that candle about an upcoming support level holding, or perhaps the bulls may take control of the market, they would likely close their position, or take profits right before the candle closed.
But when you have a strong close with a very small wick, this usually indicates very little profit taking, thus a confidence the move will likely continue. This is highly useful to us as traders, and will be common among impulsive moves like in the charts above.

  • Great! 1
Link to comment

I've said times without number that contributors like this makes people realize the whole lot of opportunities in the crypto-trading space. I'm also a trader and I find this kinda resource very handy as we begin yet another trading competition (KCGI)

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      23,016
    • Total Posts
      95,381
    • Total Members
      43,634
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Xihluke
    Joined 27/09/23 08:37
  • Posts

    • Online casinos have undoubtedly made it incredibly convenient to access a wide variety of casino games from this link. The ability to play from the comfort of your own home or even on your mobile device while on the go is a significant advantage. However, convenience should always be balanced with responsibility.
    • The AUD held early gains after Australia monthly CPI rose last month; AUD/USD faces still resistance ahead, while AUD/NZD is testing key support.   Source: Bloomberg   Australian dollar AUD/USD United States dollar Forex Inflation Consumer price index  Manish Jaradi | IG Analyst, Singapore | Publication date: Wednesday 27 September 2023 05:11 Interest rates could remain higher for longer The Australian dollar held early gains after consumer price inflation accelerated last month, reinforcing the growing view that interest rates will remain higher for longer.  Australia's CPI accelerated to 5.2% on-year in August, in line with expectations Vs. 4.9% in July, and 5.4% in June. While the monthly CPI figures tend to be volatile and not necessarily a good predictor of the quarterly CPI, which holds more relevance from the Reserve Bank of Australia’s (RBA) perspective, stubbornly high inflation raises the risk that the RBA remains hawkish for the foreseeable future.  AUD/USD 5-minute chart   Source: TradingView AUD/USD technical analysis Former chief of RBA Philip Lowe said earlier this month that there is a risk that wages and profits could run ahead of levels that are consistent with inflation returning to target in late 2025. RBA held the benchmark rate steady at 4.1% at its meeting earlier this month saying recent data is consistent with inflation returning to the 2-3% target range by late 2025. Markets are pricing in one more RBA rate hike early next year and have priced out any chance of a cut in 2024.  Meanwhile, risk appetite has taken a back seat, thanks to surging US yields amid the growing conviction of higher-for-longer US rates. Chicago Federal Reserve (Fed) president Austan Goolsbee highlighted the central bank’s priority, saying the risk of inflation staying higher than the Fed’s 2% target remains a greater risk than higher rates slowing the economy more than needed.  Furthermore, worries regarding the Chinese economy and geopolitical tensions continue to weigh on sentiment. While authorities have responded in recent months with several support measures, those measures have yet to trigger a meaningful turnaround in sentiment.  On technical charts, AUD/USD’s rebound has run out of steam at vital resistance at the late-August high of 0.6525. AUD/USD daily chart     Source: TradingView AUD/USD holds below crucial resistance Given the failure so far to clear 0.6525, the path of least resistance for AUD/USD remains sideways to down, given the lack of upward momentum on higher timeframe charts (see the weekly chart). Any break below the early-September low of 0.6350 would trigger a minor double top (the August and the September highs), opening the gates toward the October 2022 low of 0.6170.  AUD/USD weekly chart   Source: TradingView AUD/NZD market analysis AUD/NZD is testing the lower end of the range at the July low of 1.0720. Any break below could clear the path initially toward the May low of 1.0550. However, broadly the cross remains in the well-established range 1.05-1.11 so a break below 1.0550 wouldn’t necessarily shift the bias to unambiguously bearish.  AUD/NZD daily chart   Source: TradingView       This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
    • Before diving into cryptocurrencies, it's crucial to educate yourself about blockchain technology, the various cryptocurrencies, and the underlying principles. Stay updated on market trends, security practices, and regulatory changes. Understanding the technology and the market is essential to making informed decisions.
×
×
  • Create New...
us