Lesson / WY-02-12
A supply test examines whether selling pressure can still produce downward results at support, in potential accumulation or during a retest within an advance. A demand test examines whether buying can still produce upward results at resistance, in potential distribution or on a rally within a decline. Compare both with earlier action in the same direction and use subsequent results in the opposite direction to assess whether the test changes the structure.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗Timestamps
7 lessons · Chapter contents
01Tests: What Is Being Examined, and Where?↗02Supply Tests and Demand Tests↗03Absorption: Active Trading with Little Further Progress↗04Exhaustion: Declining Activity and Diminishing Progress↗05Assessing a Lack of Supply or Demand↗06Reactions and Follow-Through: Testing the Interpretation↗07Confirming Absorption and Exhaustion from Market Evidence↗Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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