hard · Order Flow Analysis absorption-exhaustion-imbalance
A 5-minute NQ bar opens at $15,500.00, has a low of $15,492.00, and closes at $15,504.00. The lower wick shows stacked selling imbalances at three levels, and the point of control (POC) for the bar sits at $15,502.00, near the top of the range rather than at the wick.
How does the POC location affect the reliability of the wick-body reversal read?
- The POC forming away from the wick strengthens the reversal read, since volume built where buyers regained control.
- The POC location is irrelevant to imbalance analysis and should not factor into the trade decision at all.
- A POC far from the wick contradicts the reversal, since real reversals require the POC to form inside the imbalanced zone.
- The POC forming above the wick suggests the selling imbalances were themselves erroneous prints and should be discounted.
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