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The sellers won this round, but what else can we gather. Notice that the bar opened at 42 and went all the way up to 58; during this rise the buyers were clearly in control. So we can infer that during this bar control shifted from buyers to sellers. It could have been that control shifted from buyers to sellers and back again many times in this bar, we don't know; but we can conclude that buyers had control and that sellers gained control from the buyers. So we have more information, sellers won the round and they wrestled control from the buyers. This bar is sometimes called a bearish reversal bar. Look again at the previous bars (figure 11), which of these bars clearly indicate a shift in control? Action: Could we improve our trading with this new information? Try trading with Market Master, this time look to open a position when you see clear evidence of a shift in power from one side to the other and get out on a trailing stop. 37 Multiple bars (bars in the context of the chart) Can we learn more about the market when we see the individual bar in the context of what has gone before it? Look at this bar: Figure 13 Buyers have been in control from open to close. How would the significance of this bar alter if we saw it in a sequence of bars moving up or down? Examples: Figure 14 The market is trending up (figure 14) and the bullish bar suggests that the buyers are still in control and will continue to push prices higher. 38 Figure 15 This time (figure 15) the market has been trending down, and the bullish bar suggests that buyers have come in to arrest the fall and perhaps reverse the trend. So the same bar has a different significance in each case. In the first example it signifies a continuation of the trend and in the second a reversal of the trend. What about a reversal bar 39 Figure 16 The last bar (figure 16) a bearish reversal bar, suggests that an attempt by buyers to reverse the trend has failed and prices will continue lower. |
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