Sharp price moves are usually born from an imbalance: far more buy orders than sell orders (demand), or the other way around (supply).
The area where that sharp move started often becomes a place where price reacts again when it is revisited, because there are still orders left there.
Characteristics of areas worth watching
- Followed by a strong move that leaves the area quickly.
- Not yet retested (still "fresh").
- Aligned with the trend direction on a higher timeframe.
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