Exhaustion Gaps

Trying to make some points here.

Importance of Gap evaluation.

If you manage to identify the gap correctly, you know where you are and what’s the game plan should look like.

From the arrow on the bottom to the swing high there was 138 pips.

1. Exhaustion gap spotted

2. Wait for price to pull back beyond the 8-hour EMA of opens

3. Aim for at least 138 pips from the entry area to the furthest fractal print.

From the upper arrow to the swing low there was 160 pips.

4. Wait for two outside fractals to appear in a declining order and draw a trendline. Every time the price exceeds this line you get an entry for the bow back target.

This is now upside down to understand my points better.

5. The bow back is shaped by the volatility first compressing then starting to expand. The bow target is in the neighborhood of the closing price (average closing price) of the swing point’s hourly candle / candles.

If this makes a smidge more sense to you than an Elliott Beethoven looking for a beat of the swing point for an entry, clap your hands!