So essentially can we not say the theory behind this strategy is that, high impact news is released. this news acts as a catalyst to bring in increased volume. Sometimes, a large institution may use this additional liquidity to fill their orders in at such a strong rate that despite the influx of orders in one direction, price can not move much. Since price does not move, those orders that got absorbed will eventually have no choice but to close their position which means price will pop in the opposite direction as they offload their position. The main key take always from this are trapped orders will be squeezed pushing the price to the other side, and we have a whale on our side. Can you please let me know if what I said is accurate? And please let me know if I missed anything.
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So essentially can we not say the theory behind this strategy is that, high impact news is released. this news acts as a catalyst to bring in increased volume. Sometimes, a large institution may use this additional liquidity to fill their orders in at such a strong rate that despite the influx of orders in one direction, price can not move much. Since price does not move, those orders that got absorbed will eventually have no choice but to close their position which means price will pop in the opposite direction as they offload their position.
The main key take always from this are trapped orders will be squeezed pushing the price to the other side, and we have a whale on our side.
Can you please let me know if what I said is accurate? And please let me know if I missed anything.
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