Japanese Yen / U.S. DollarEducation
Why price reacts to s&d zones before breaking them
Why price reacts to s&d zones before breaking them.
We tend to see a reaction for one simple reason;
- BFI's need liquidity to accumulate a sizable position.
So, how would a reaction provide them with this liquidity?
- Retail traders will enter aggressively at these s&d zones
expecting price to move away from them. Now, BFI's will
use all this liquidity to accumulate a sizable position,
targeting the next pool of liquidity which is
retail's stop-losses on the opposite side of the zone.
We tend to see a reaction for one simple reason;
- BFI's need liquidity to accumulate a sizable position.
So, how would a reaction provide them with this liquidity?
- Retail traders will enter aggressively at these s&d zones
expecting price to move away from them. Now, BFI's will
use all this liquidity to accumulate a sizable position,
targeting the next pool of liquidity which is
retail's stop-losses on the opposite side of the zone.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.