In this post I would like to draw you attention towards Engulfing price action and stop hunting after an area is engulf.
Price Action usually depend on few puzzles. First of them is Flag limit of a zone & second is price Action zone & whole the Price action evolves between these two zones. When an area is engulf, then we should set our focus to another important flag of the zone which is FL or even stop hunting zone. Usually, these areas are MPL zones or you can say Maximum Pain level when we have an area which is already given away (Strong support or resistance) & then price move backs to the zone and after Faking out the zone, there is usually significant Drop or Rise is seen.
Our focus should be on the reaction of the price, when Price again visit that area. Price usually visit that area with strong collection of orders. It could be these of areas & location few times. Price can compress to that zone or even price can create Stop hunting zone. Best way to spot those zones is usually stop hunting.
Stop Hunting process usually depends on way wyckoff explain the sign of strength or weakness
Wycoff usually spot end of trend with strong buying or even selling Climax and then accumulation & then another trend starts which can be either testing the distribution zone above or even with markup zone, when we have new trend in sight. But our focus is on testing the distribution zone again. I’ll create a video explaining the chart with engulf and then test of area with conviction.
