No indicator in specific. Simply a different insight into trading that I got from looking at those damn charts for so long. Thinking about the mechanics of the exchange, at some point, you start understanding what is causing the moves.
I have always been skeptic about the various support/resistance lines and trading channels theories. That have always sounded like hubris to me and in fact markets could really be totally random for all we know. BUT, if enough people believe and practice those technical analysis theories, they become like a self fulfilling prophecy.
I'm not sure if the development of those techniques have been accidental or seeded in the conventional wisdom for the benefit of few people who figure out that training the herd on how to react, they could harness a system that would otherwise be chaotic and unpredictable.
If a sufficient number of people set a 'Take profit' stop on their order on a major resistance line price. Once that price is reached, all the 'take profit' stops are triggered and make quite a drop in the price. This drop, if big enough, then creates a chain reaction that triggers all the 'stop loss' orders. And THAT makes a big hole.
Since I saw it happening yesterday, it did happen at least 3 others times. Since it is not a 100% sure thing. You cannot just program an order to buy or sell at a certain level and forget about it. You need to monitor the market either manually or with software automation to spot early sign of what is happening. The opportunity window is very small. 3-4 minutes max because after, it is over...
I have always been skeptic about the various support/resistance lines and trading channels theories. That have always sounded like hubris to me and in fact markets could really be totally random for all we know. BUT, if enough people believe and practice those technical analysis theories, they become like a self fulfilling prophecy.
I'm not sure if the development of those techniques have been accidental or seeded in the conventional wisdom for the benefit of few people who figure out that training the herd on how to react, they could harness a system that would otherwise be chaotic and unpredictable.
If a sufficient number of people set a 'Take profit' stop on their order on a major resistance line price. Once that price is reached, all the 'take profit' stops are triggered and make quite a drop in the price. This drop, if big enough, then creates a chain reaction that triggers all the 'stop loss' orders. And THAT makes a big hole.
Since I saw it happening yesterday, it did happen at least 3 others times. Since it is not a 100% sure thing. You cannot just program an order to buy or sell at a certain level and forget about it. You need to monitor the market either manually or with software automation to spot early sign of what is happening. The opportunity window is very small. 3-4 minutes max because after, it is over...
