RLinda | Market cycles and the role of the market maker 🤠

4 Jul 2022

The price channel is a limited trading range in which the price moves during a certain period of time. In other words, it is a "corridor" on the price chart. The boundaries of the price channel are outlined by two lines: resistance and support.

A resistance level is a price level from which price reverses as it approaches from the bottom to the top. This level is as if it is resisting the price, preventing it from going higher.

A support level is a price level from which price reverses when approaching from above downward. This level as if supports the price, not allowing it to go lower. A resistance level is a price level from which price reverses on the downward approach.

Accumulative flat is a limited area within which there is only a slight fluctuation in price. In some cases, a consolidation is referred to as a sideways trend movement in which there is only a slight change in price, varying within a fairly narrow corridor.

A bear market is a period when the price of an asset has fallen by about 20% or more from recent highs. At this point, the investor fear index increases and panic is possible in the market. A bear market is the same as a bear market, it is also called a downtrend. It is opposed to a bull market. Bullish - vice versa

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• Always before a move in one direction, the market maker forms an accumulative flat, the price in it trades from border to border.
  
  
• An accumulative flat can form for a long time. The narrower and the longer is the consolidation, the stronger is the momentum.
  
  
• Before a large impulse movement, a large player forms a shakeout relative to the upper and lower boundaries, determines positions, and after all bids are activated, moves towards the larger accumulation of players.
  
  
• Then a distributive drop (free) is formed where there is no resistance from the support side, since earlier the balance was already broken. Bids are collected and the ratio of buyers and sellers begins to change. Price passes into consolidation after the fall.
  
  
• The subsequent fall is the entry of liquidity from those players who had previously entered at the highs
  
  
• The price after the fall goes into consolidation, if we see that there is no deep pullback, it means that the big player is not interested and the resistance limit zones do not allow the price to grow.
  
  
• To determine the boundaries and consolidations, to understand where the big player is gaining and where he distributes them, it is better to use the higher timeframes, and for entry points - the lower ones.

Sincerely, R. Linda!

*The wording is taken from google