Lesson / WY-02-12
A lack of supply describes a downward test in which visible selling activity and downward results weaken relatively, followed by a recovery of demand. State the comparison and its object: which earlier supply swing had higher volume, how downward range, duration and extension to a new low changed, and where the test occurred. A low-volume, narrow-spread decline at post-breakout support that is quickly recovered provides stronger evidence than the same appearance in the middle of a range.
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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A Fresh Look at a Single Candlestick
Understanding Volume
