HI,
I cannot find right place to post so writting here, please move it to the right place if its wrong.
Could you explain what does it mean "Long liquidation?"
Means that someone - "weak hands" has been trap on the TOP and then on lower prizes they dumping their longs "selling" so Smart Money buying from them?
Liquidation refers to the act of exiting a securities position. In the simplest terms, this means selling the position for cash; another approach is to take an equal but opposite position in the same security, for example, by shorting the same number of shares that make up a long position in a stock. A broker may forcibly liquidate a trader’s positions if the trader’s portfolio has fallen below the margin requirement or she has demonstrated a reckless approach to risk-taking.
You probably mean when the profile shape looks like a 'P' or a 'b'. In theory, short liquidation will occur at the end of a down trend and the profile will look like a 'b'. VSA traders would say price is showing signs of accumulation at the end of the trend. Conversely, long liquidation will occur at the end of an up trend and the profile at the end of the session will display the shape of the letter 'P'. The upper part of the profile will show lots of activity. Again in VSA terminology it is called distribution.
To help you remember them here are some tips...
When the profile at the end of the day has a 'b' shape you can think of the verb to buy as investors have started to buy, when the profile has a 'P' shape, well! i personnaly think about the verb to Perish as in all ascending trends Perish over time, this is associated with selling.
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