medium · Volume Profile Analysis trading-strategies
In a trending market, price retraces to a prior session's Point of Control (POC) and immediately prints a long lower wick on high volume.
How does Auction Market Theory classify this behavior?
- Initiative buying above prior value, signaling that the established trend is accelerating into a parabolic, late-stage phase.
- A failed auction at the POC implying the market must later probe lower to locate fresh, willing buyers.
- Responsive buying at a prior fair-value level, reinforcing the trend's structural integrity.
- Rejection of the trend as trapped longs at the POC are forced to liquidate into the next rally.
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