Lesson / WY-02-12
Tests, absorption and exhaustion all require subsequent price validation. After price leaves the observation area and crosses the test leg or local structure, sustained trade in the new area or further same-direction swings support the judgment. A later retest that holds adds evidence, but is not a mandatory stage for every valid event. A brief rally that crosses no local resistance is insufficient to establish a successful supply test.
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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Understanding Volume
