Sideways price action after a downtrend as "smart money" builds positions.
In the world of trading, one of the most common mistakes beginners make is relying on a single timeframe to make decisions. They might see a bullish breakout on a 5-minute chart, buy immediately, and then watch the price collapse because the daily chart was in a strong downtrend. Sideways price action after a downtrend as "smart
Do not buy at the top of the HTF range. Wait for the intermediate timeframe to pull back to a support area (like the 20 SMA, a previous volume point of control, or a prior swing low). Do not buy at the top of the HTF range
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A sustained uptrend with higher highs and higher lows—the most profitable phase for long positions.
Shannon simplifies market movement into four logical phases: