Hi @farmlife Yeah, that looks like a brief test for supply -...

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    Hi @farmlife

    Yeah, that looks like a brief test for supply - most probably in response to the potential weakness (unconfirmed weakness) seen in the previous bar which closed poorly. The next bar being up suggests the weakness may not have been confirmed.
    See below for a little spring on that same chart.

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    And just on the reversals, generally you are looking for an initial down bar with a wider than average spread and one that closes poorly (down near the low of the bar, or generally in the lower half of the bar). It is usually be seen by the wider market as "threatening" and infers that a price breakdown maybe about to occur.

    In saying that, I do agree that these formations come in all shapes and sizes (the market generally doesn't perform 'text book' perfectly), so some flexibility needs to be allowed for when identifying bar arrangements. So on that weekly one you posted above, it isn't really a perfect example, but maybe some form of reversal. It has certainly preceded an attempt to support the market - as price seems to have been knocked sideways since, and into a trading range which may prove to be a form of accumulation zone.

    hope that helps, let me know if it doesn't.

    cheers
    Last edited by Jako8557: 09/06/20
 
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