Today I want to talk about a question that people often ask me: Brother, what do you mean by position movement, why do you want to move there, and how do you predict it?

The so-called position movement means that after the market has been moving for a period of time, there will be a new supply and demand balance point. The area of ​​long and short conversion is the position of long and short positions, which is also the place we need to protect.

The predictability of prices comes from the execution of orders and the remaining orders. Let’s talk about these two points in detail.

First, let’s take a look at what price predictability is.

The reason why price movement is predictable is due to the imbalance between supply and demand of orders.

What is a supply-demand imbalance? Supply is greater than demand, or demand is greater than supply and demand What does a supply-demand imbalance mean?

If the short position loses to the long position at a certain price, the short position will suffer a floating loss; if the long position loses to the short position at a certain price, the long position will suffer a floating loss. As shown in the figure (taking the current hourly k of BTC as an example):

Large background structure: 1.2.3

2. Long and short conversion

The structural position can be understood as the position of each long-short conversion. The structural position where supply and demand reach a certain balance point or destroy the balance, or even a strong dynamic K.

3. Long stop loss position moves up

The structure position on the left side changed from short to long in the early stage. The subsequent price tested the structure position many times and got support. Therefore, a large number of long stop loss orders gathered at the structure position. When the price went up later, the long stop loss position was raised again, and some people used pin to enter the market again to do long. A large number of long stop loss orders gathered at different prices on the left side. This will become the driving force for the price to go down: hunting liquidity.

4. All long stop loss positions are hit

5. Supply and demand imbalance k and imbalance area

Until an imbalance K appears, all long stop loss orders on the left are hunted out, resulting in the initial failure of the longs that have entered the market: the longs that entered the market at high positions will immediately turn into floating losses when there is a small profit;

The bulls who entered the market at a low price will either exit when the high price hits the protection level, or the price will return to the bottom to break even or make a small loss. The bulls here have already felt regretful and even doubted the need to hold a long position again.

6. Determine the entry area for short selling Based on the supply and demand imbalance K-line and area, the entry area for short selling can be preliminarily determined. Because the imbalance area tells us that the longs who entered the imbalance area were defeated by the shorts, and the price went down, causing the long positions to be stopped or floating losses. The price directly went down to an extreme balance point in the bulls' psychology. The longs who had entered the market would bear the failure of this transaction. When the price returned to its imbalance area later, the long positions on hand would be released, causing the price to go down again. We can complete a short transaction by using the increased liquidity and establishing a short position together.

7. The price accurately tests and moves downward. When the long positions are reduced at a large level and turnover begins, and supply exceeds demand, a test K will appear. The price tests the imbalance area and the K-line results obtained tell us that the longs who entered the market at a high level are no longer bullish and have released their own long orders, increasing short liquidity and causing prices to move downward. This is the available liquidity order for us to make a profit. If the longs on the left side do not close their positions or reduce their positions in the imbalance area, the longs will work in vain, and even turn from profit to loss.

In summary: The reason why price movement can be predicted is due to the imbalance between supply and demand. As long as the supply and demand imbalance area is found, the price movement can be predicted. Follow the homepage of Haogege to learn technology and don't get lost.