Formazione
Microstructural phenomenons: pre-test
Aggiornato
On the chart, Oct '94 is a pre-test of 92.26
I'm not sure it's a good example here, but it'll suffice to explain this easy concept.
Again, it's not the system's behavior principle, the reason of this microstructural phenomenon is all of us.
Forgot to mention before...
There's no such thing as, "A new wave started after "almost" hitting a level". NO. In 100% cases, a level should always be touched. because cheap/expansive is always 1 tick past the level, the main responsive activity will be concentrated after the level, never before.
However, some of us sometimes gets a lil heavy handed in scaling in/scaling out of the previously acquired position. That's why prices start to react (sometimes quite strong) in front of the level.
The main things to learn from here:
1) Pre-tests are not the systemic events, if you're responding at a level / a lil deeper past the level, nothing had changed for you at this points;
2) If you started to scale in before the level and got caught in a pre-test, just simply close your position with whatever revenue this pre-test offers a lil bit later and start scaling in again like nothing happened;
Caution: pre-tests are also a part of the recorded market activity as everything else, during which the things may change or may not change. Pre-tests should be taken out of the context and be processed as independent entities.
I'm not sure it's a good example here, but it'll suffice to explain this easy concept.
Again, it's not the system's behavior principle, the reason of this microstructural phenomenon is all of us.
Forgot to mention before...
There's no such thing as, "A new wave started after "almost" hitting a level". NO. In 100% cases, a level should always be touched. because cheap/expansive is always 1 tick past the level, the main responsive activity will be concentrated after the level, never before.
However, some of us sometimes gets a lil heavy handed in scaling in/scaling out of the previously acquired position. That's why prices start to react (sometimes quite strong) in front of the level.
The main things to learn from here:
1) Pre-tests are not the systemic events, if you're responding at a level / a lil deeper past the level, nothing had changed for you at this points;
2) If you started to scale in before the level and got caught in a pre-test, just simply close your position with whatever revenue this pre-test offers a lil bit later and start scaling in again like nothing happened;
Caution: pre-tests are also a part of the recorded market activity as everything else, during which the things may change or may not change. Pre-tests should be taken out of the context and be processed as independent entities.
Nota
Correction:Pre-tests should NOT be taken out of the context and should NOT be processed as independent entities.
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