medium · Order Flow Analysis absorption-exhaustion-imbalance
A trader observes a bar where the 'Top-Heavy' ratio (R_top) is 0.25. The bar closed lower.
What does this suggest about the activity at the high of the bar?
- The auction at the high is unfinished and will likely be revisited.
- Retail buyers successfully broke out but the move lacked volume follow-through.
- Aggressive sellers were exhausted at the top.
- A large participant was selling passively at the extreme high.
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