easy · Order Flow Analysis footprint-delta
A trader is looking for a short entry. They see a red candle with a long upper wick. The footprint shows buying imbalances in the upper wick but the Commitment of Traders (COT) is near the high, and the bar closes near its low.
What does this 'Wick-Body' pattern imply?
- The buyers in the wick are in control and will likely push higher in the next bar.
- The market is in equilibrium and no trade should be taken.
- Aggressive buyers tried to push the market higher but were overwhelmed by passive sellers, trapping the buyers.
- Passive buyers absorbed the selling and are preparing for a rally.
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