EURUSD H1 – Undergoing Distribution
Dynamic trend: Down
Background: W1 – weak; D1 – neutral
In point 1 there was Buying Climax on high volume. The next bar was a down bar, which showed selling by the smart money.
In point 2 there was an Up- thrust. If the spread is narrow (as in this case), then the value of this signal is not great, but taking into account the weakness in the point 1 and the previous up-bar with a large volume and a narrow spread, it informs us that the supply has probably overcome demand.
In point 3 there was a top reversal bar. Maximum of the down-bar above the high of the up-bar, but the volume lower, indicating weakness.
In point 4 more reversal bars, with VSA signaling supply.
Selling on the distribution phase is risky, since the market doesn’t have any clear direction and is prone to shake-outs of the highs.
Consider selling using a sell-stop order when «No Demand» bar appears (riskier). Or a sell-stop order when the price breaks down 1.1130 and «No Demand» bar will appear (less risky).