Rejection Setup
This article is not your typical relationship rejection we are learning about markets rejection of higher or lower prices setup but with Volume Profile.
Table of Contents
Rejection Setup Definition
- This setup is based on finding a very strong rejection of either higher or lower prices and applying Flexible Volume Profile to it.
- The key to trading this setup successfully is identifying the strong rejection in the chart.
- Sometimes, the strong rejection looks like a strong pin-bar created at a swing point, but sometimes, it is not so clear, and there are other Rejection candles.
- We don’t care what candle pattern is bcoz, the candles changes with the time-frame.
- What matters the most is that the rejection is strong and that the aggressiveness within it is evident.
Basically Spot Rejection of Higher or Lower Prices.
Rejection of Higher price
Rejection of Higher Price
- We look for buying activity followed by sudden price reversal and a consequent strong selling activity.
- When there is a strong price reversal, we get the information that one side of the market became very aggressive and strongly rejected some price level.
- We are interested in the place where the heaviest volumes within the rejection were added to the market
- Not good in major Uptrend.
- Best results in Sideways and Downtrend market.
Short Trade Scenario
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Rejection of Lower price
Rejection of Lower Price
- We look for selling activity followed by sudden price reversal and a consequent strong buying activity.
- When there is a strong price reversal, we get the information that one side of the market became very aggressive and strongly rejected some price level.
- We are interested in the place where the heaviest volumes within the rejection were added to the market
- Not good in major Downtrend.
- Best results in Sideways and Uptrend market.
Long Trade Scenario
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That’s all for this setup and remember this setup is my least favorite so do through back-test of this setup. Next is reversal trades.