A market-model trading approach that buys when price drops below the fair-value area and aggressive buyers absorb the selling pressure. The bet is that buyers focused on execution over price signal the upward fair-value shift will continue.
Let's say price was here, pumped up, and now it's here. How do we use this model to trade? The first rule is that fair value must be rising. So we do not want just a break of structure. We want a shift in fair valuation. And the second thing is we're going to wait for what we call a failed auction. We take the fair value area low, we take the fair value area high, and this is where price is agreeing now is the fair value. Aggressive sellers are more active on top. Aggressive buyers are more active at the bottoms. So whenever we see this price dropping below, this means that sellers are willing to pay lower and lower and lower prices to get filled. But we're getting into buyers', aggressive buyers' territory here. And so what you will often see in this situation is one of two things. Either sellers, these aggressive sellers, finding a wall of buyers that are absorbing this pressure, because if they were willing to buy all the way here and keep paying worse prices, they don't care about getting filled at the best price. They care about execution, not pricing. Then it's very likely that if we're here, They're gonna keep doing the same thing. This is the basic assumption, right?
