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Module 5: Lesson 9

10. Compression

A price reaction that presses the price of a spring is called compression. Compression can take many different forms.

There is a ladder-shaped staircase in some of the Trending, and the shaped triangle is shrinking.

However, it has one equation: wicks in opposite directions will empty the order on the way to the genuine supply and demand zone. Shadow wicks on compression means buys will be up, while shadow wicks on compression means sells will be down.

“As a general analogist of the SPACE and TIME concepts, space and time have generally been mixed with our coming to being. I frequently entered the market because of compression, as compression is the first indicator. It cleared supply and demand before the price reached the zone… As a result, the price has given us the initial signal before turning in a new direction; otherwise, the price would not have been compressed. This demonstrates that the price is anticipating events. There are no other explanations for this price reaction, and no traders can provide alternative explanations with analysis charts to back them up.

I was recently in the USDJPY-based compression market, and I didn’t take into account the news at the time because I didn’t care about the news, and the price eventually dropped… and the compression was done before the news came out.

There is a supply cluster on the left chart, similar to the chart above and some of the charts I previously thought, that, when it comes to price in the zone cluster that miraculously affects the news or world events that cause the dollar to weaken, the conclusion I can come to is the same as you.

I am not a talker, but It is incredible how the world’s events coincide with the zone” (Red sword 11, March 2011)

In layman’s terms, compression is the process of emptying buyer and seller orders in anticipation of upcoming news or global events that will be as biblical to drastic candle movements as we see when the NFP or FOMC are released.

For instance, TF H4 requires 4 hours to close and open new candles. Price compresses to a single zone but does not stay there; instead, the price appears to slow down its movement toward the zone until an event or piece of news occurs, at which point the price spikes into the MPL zone and makes a significant jump.

Compression can take the form of an uptrend market bias with realizing HH and HL, resulting in most buyers being trapped in SL or floating until the stop out or margin call.

Optional Assignment

Please create two charts that clearly show compression. Best of luck!