Price Action Breakdown

The fair value of any given forex pair, stock or commodity is an area where price has spent most time trading at, an area where supply met demand and buyers and sellers both, agreed that this price area corresponds to their current expectations.

The fair value of any given forex pair, stock or commodity is an area where price has spent most time trading at, an area where supply met demand and buyers and sellers both, agreed that this price area corresponds to their current expectations. Balance in action. The Fair Value Area represents a state of equilibrium where supply meets demand. It's characterized by price rotating up and down within a confined range, forming a sideways movement. This area is where the bulk of trading volume occurs, indicating agreement between buyers and sellers on the current fair price. Identifying Fair Value Areas: Look for areas where price spends the most time trading Observe repetitive up and down movements in the same price area Seek to leave out as much blank space as possible above and below the value area Imagine removing the time axis to see a "bulge" or "swelling" of price activity By mastering the identification of Fair Value Areas, traders gain insight into market structure and potential future price movements, laying the groundwork for more informed trading decisions.

The excess price you have seen in the above examples, that takes shape above or below a value area, can be interpreted in the following way. It shows the footprint of the long term trader and his intentions. Beyond the boundaries. Excess price occurs when price moves briefly outside the Fair Value Area, revealing clear supply and demand zones. These excursions are typically short-lived, with price quickly returning to the value area. Excess price is crucial because it shows the intentions of long-term traders, who have the power to move markets significantly. Characteristics of Excess Price: Brief price movements outside the Fair Value Area Quick rejections and returns to the value area Forms strong support or resistance levels More pronounced rejections (tails) indicate stronger supply/demand Understanding excess price helps traders identify potential turning points in the market and areas where long-term traders are likely to enter or exit positions. This knowledge can be leveraged to make more informed trading decisions and to anticipate potential market reversals.

The control price is basically a pivotal support and resistance level inside the value area. Pivotal price point. The Control Price is the price level within the Fair Value Area where the market shows the greatest trading activity. It acts as a gravitational center, attracting price movements within the value area. Understanding the Control Price is crucial for identifying potential support and resistance…