Purpose: Recognize When to Exercise Patience in an Oversold Market with Ongoing Selling Pressure

When the green area (oversold conditions) combines with the red line (bearish momentum), PIQL Pro is signaling that, although the market is oversold, selling pressure remains strong. This combination calls for patience, as a reversal may not be imminent.

What It Means

•Green Area: Indicates oversold conditions, where prices have dropped significantly and a potential reversal could be on the horizon.

•Red Line: Shows that bearish momentum is still active, meaning sellers remain in control.

This combination suggests that while the market is oversold, it could stay in this state longer as selling pressure persists, making an immediate rebound unlikely.

How to Act

Wait for Confirmation: Avoid entering long positions just because the market is oversold. The red line signals that bearish momentum is still present, so it’s wise to wait for clear signs of a reversal before taking action.
Be Patient: Markets in oversold conditions can sometimes stay there longer than expected, especially when strong selling momentum remains. Practicing patience in this scenario can save you from premature entries.

Real-World Example

Imagine you’re analyzing a commodity market that has dropped significantly, entering the green area and indicating oversold conditions. However, PIQL Pro also shows the red line, suggesting that bearish momentum is still in play. Instead of buying immediately, you’d wait for further confirmation that a reversal is actually starting, such as the green line appearing or other bullish signals, before considering a long position

Key Takeaways

Green Area + Red Line = Caution in Oversold Conditions: This combination signals that, despite oversold conditions, bearish momentum remains strong.
Trading Action: Wait for further confirmation of a reversal before entering long positions, as patience is crucial in this setup.

Practical Tip

Review a case study where this combination appeared, and develop a plan for when you would consider entering a long position. Focus on the signals you’d need to confirm a reversal and prevent premature entries.

By recognizing this signal, you’ll know when to be patient and avoid entering too early, improving your timing and decision-making with PIQL Pro.

Green Area + Red Line = Bearish Momentum in an Oversold Market

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