A trading setup that waits for fair-value to rise, then enters when price drops below that area with low volume. The idea is that sellers are conceding to lower prices while buyers get more aggressive, creating a setup to catch the bounce.
Let's say price was here, pumped up, and now it's here. How do we trade this? So 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. Okay, then we know we're on the long side. And the second thing is we're going to wait for what we called a failed auction. And a failed auction is if this is the current level of fair valuation, let's say, then here there's no volume at all. Here's a little bit more volume, right? Because this is this little volume here, a little activity in trading here. Okay. 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 because This is much more aggressive in the, in terms of is it a fair price to trade at, right? And so what you will often see at this situation is one of two things. Either sellers, this aggressive sellers finding a wall, the punch to the wall that Fabio always says, 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 going to keep doing the same thing. Mhm. This is the basic assumption, right?
