medium · 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 who transacted in the wick are firmly in control and will likely push higher next bar.
- The market is in complete equilibrium at this point, so no directional trade of any kind should be taken.
- Aggressive buyers tried to push the market higher but were overwhelmed by passive sellers, trapping the buyers.
- Passive buyers fully absorbed all of the aggressive selling pressure and are now preparing the market for a rally.
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