Do you look for or trade exhaustion?
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Thread: Do you look for or trade exhaustion?

  1. #1

    Do you look for or trade exhaustion?

    Hi,

    Second time I am starting a thread . I have been studying exhaustion lately, if I could find a method to see it, as I believe I could dramatically improve my trading. Let me attempt to explain what I mean.

    I consider exhaustion in the order flow point of view. Meaning simply this...(using a bullish example). When all those who would like to buy have done so and there is no one (in the long run ) left to buy. You can use that zest to get a sell.

    Why do I want to be able to see this? Since I believe that when the buying has exhausted (on a very long term or short term basis) that price will probably reverse even for a while until new price swings attract other participants.

    Thus I am looking for a means to identify that condition in the price structure. I have looked at Big candles and some price patterns such as hammers and shooting begins (affectionately known here as pin bars) but do no see anything constant. Likewise I have looked at oscillator divergence and again see nothing that's consistent enough to be called a border.

    So my question for you is that: If are you willing to talk about here how you spot it?

  2. #2
    Quote Originally Posted by ;
    .. .thanks for sending these. I've read them but will look over it again to try to find something I've missed. These books are very technical, and I'd imagine that is what I seem to be looking for. IT IS NOT... I am looking in order flow and the way that impacts price. I do not trust or rely on tick values. . .and that is all we get here in Currency Market. Most of the examples are from futures and indices markets where the volumes are volume statistics. And yes they hold value, but not in the...
    There are some alternatives. . .You can trade currency futures options ( put-to-call ratio). . .COT report could be an additional valuable asset. . .and last but not least, some ECN brokers offer you the benefit of appearing at their order publiions to get an idea about order flow and market sentiment. . .Regards

  3. #3
    Quote Originally Posted by ;
    There are some alternatives. . .You can trade currency futures or options ( put-to-call ratio). . .COT report may be an additional valuable advantage. . .and last but not least, some ECN brokers offer you the benefit of appearing at their order books to get an idea about order flow and market sentiment. . .Regards
    I am actually considering that. Currently my information feed doesn't cover currency futures. I only trade index mini futures. I will look to that.

  4. #4
    If fatigue is real. . It's challenging to see because liquidty dies off though out the day or week and picks up. Example Slow news day may see liqudity. Or London open might have high liquidity by london lunch time price might be postponed in a 10 pip range waiting liquidty and to appear to select up again.

    Instead of Studying exhaustion... you may do research on when liquidty is low and high. It might be of more use. to you. . I gave you a couple of hints of where to begin looking.

    I use liquidity changes all of the time. . I expect them and its really reliable.

  5. #5
    This is a good subject,

    exuastion is the the exit stage,every period of time and also the momentum within that interval gets the initial energy and the point where it's exuasts,its own maxiamun possible,it can not within this quantified interval surpass it.so exuastion is essential in commerce managment .your r/r ratio is essential .regardlee of this period of time you measure it will have a maximun ptentential its own exuastion point.

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