Effort to Move-down bar
Effort to move up down is a firm long down closing bar with its volume in agreement with the size of bar. The bar has small or no tail signifying lesser buying pressure.
An effort to move down bar is generally associated with sudden selling activity by professional buyer, the buyers having deep pocket and internal information of the underlying asset. The effort to move-down bar is formed after sellers have distributed equity at higher prices.
Valid effort to move-down bar
A valid effort to move-down bar can be found after some distribution i.e. sideways movement at top of rally. A effort to move-down bar after a rise i.e. long green candle followed by a long red candle cannot be considered as a valid effort to move-down bar. Such type of a bar could also be result of failed supply test.
A valid effort to move-down bar can also be confirmed if it has a no demand bar or distribution bar i.e. small size large volume before it.
What after a valid effort to move-down bar?
A effort to move-down bar needs to be confirmed before any trade can be taken. A effort to move-down bar is a calculated move by professionals after they have set in the stage for mark-down of prices. Even after taking all due considerations even professionals can never be sure whether their move is successful or not. They use some bad news or negative market sentiments to make such moves.
How can a professional confirm the move ? The only way to confirm the move is by taking a supply test. If the effort to move bar is followed by demand test, you can always take a short position on confirmation of no demand.
Examples of effort to move-down bar
Below is the daily chart of APPLE INC for May 2021. Effort to move down bar has been marked with "ED" which is just located below distribution zone.
Resources
Learn more on volume price analysis and other technical fundamentals through the Book "A Complete Course to Volume Price Analysis- Read the market Bar by Bar" by Achal. Pinescript codes for identification of bars also available in book to assist you during your learning.
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