i have drawn the value area along with its limits and control price.
What observations can be made by analyzing each component?
The value areas. Each value area is taking shape at a price level lower than the previous. This is a clear indication of a downtrend. The control price it has a downwards slope. Another indication of a downtrend. In a downtrend, when price rotations become small and they happen in the upper part of the value area, the trend is most likely to end. The narrower the rotations, the bigger the break of value will be.There is less trading activity below the control price so the market has to move higher and find another control to gravitate in order to facilitate trading on both sides of the value area.The less time price spends at a certain price level, the more effective that price level will be in providing support or resistance for future price action.
What observations can be made by analyzing each component?
The value areas. Each value area is taking shape at a price level lower than the previous. This is a clear indication of a downtrend. The control price it has a downwards slope. Another indication of a downtrend. In a downtrend, when price rotations become small and they happen in the upper part of the value area, the trend is most likely to end. The narrower the rotations, the bigger the break of value will be.There is less trading activity below the control price so the market has to move higher and find another control to gravitate in order to facilitate trading on both sides of the value area.The less time price spends at a certain price level, the more effective that price level will be in providing support or resistance for future price action.
Trade closed: target reached