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Does price just happen to stop at the high area and bounce off the low area because of market participants?
Or is it always manipulated? Is this a sign, ever so subtle, that some big player is manipulating it for some reason?
Consider you have an endless bank. You could be buying, then sell some, only to buy some more. You could have limit orders on the bid to accomplish this. When it gets too high you sell so it drops back down then you buy some more. You keep doing this until you have bought what you set out to buy. You even have booked orders on the ask just for grins and giggles. You have an endless bank to do what you want. You are a big player.
When you reach what you were required to buy, you pull your offer orders and...
wala you create an expansion move
Al Brooks calls these areas barbed wire if I remember correctly
You have to take into consideration that there are two sides to every trade.
Buyers think the price will rise and seller think the price will fall. Someone is going to be wrong.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
I totally understand there is always a buyer and seller. The aggressiveness of one side is what moves the market, because there is always an equal amount or a 1:1 relationship between buyers and sellers in a trade.
Consider, If you are a big trader and you want to accumulate a s-load of contracts, you need to buy contracts from others. You do not care who the other side is, you just want to accumulate contracts in this example. Most important to understand such a trader has no fears, they know if they dump a huge order on the market at any given point in time they highly likely if not always affect the market in a desired direction. I believe there are only a handful such organizations in the world who fit this level of "big guy".
Consider this big guy has a plan to obtain a large number of contracts say 10,000 This big guy always have a goal of making a profit from their events/actions/manipulations. The big guy does not want to tip his hand by simply dumping a 10k order on the market as it would adversely affect the desired outcome. The big guy would want to accumulate the desired number of contracts within a desired price range, something defined in their overall plan for this "event".
So the big guy starts to buy. The accumulation process will eat up all the sell orders in the book and thus price will rise. Price is allowed to will rise to the edge of plan's pre-defined acceptable price range (to the tick). At this point the big guy starts to sell. They sell just enough until price starts to fall back into the plan's buy range. There is no concern for who is on the other side, the only concern is that price is moving back down into the desired range. Once price is in the desired range they start buying again. They keep track of the overall accumulated inventory (total buy orders filled and open).
Notice the lower edge of this barbed wire coil in the first image is not at a fixed tick level. It is simply where the big guy again gains control and his buying starts to cause the market to rise again.
This process repeats until the objective required inventory level is obtained.
Such an action would make the market look choppy or like the barbed wire as in the first image.
This big guy likely would most likely have placed booked offers well above the range. When they hit the desired inventory level, they remove those booked ask orders and hit the buy gas pedal. This would cause price to rise past the upper edge and ignite the expansion move.
This is why I view the coil/barbed wire as manipulation and lead to my question are all moves manipulated. One just needs to see it and use the edge it provides.
I guess you won't know unless you know who is doing the trading.
I can see big operators pushing the price down to where the stops most likely are. They need liquidity to fill big orders.
To me the barbed wire areas as you refer to them show an agreement between the buyers and sellers as to the perceived value of the asset. A break from that area shows a change in perception by traders of the value, usually caused by new information.
The big boys are fighting among themselves. Not sure thats manipulation. At any rate it's not anything we can control, but it might be something we can take advantage of.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
