Phase C

It represent the test (false breakout with high Volume).
  • Phase C is known as the test, and it is composed by the false breakout event, which is perhaps the most important of all the logical events.
  • Phase C is very well informed traders will attempt to induce the un-informed traders to the wrong side of the market, in order to generate liquidity for themselves.
  • This is also a way that large traders have to test if the interest in the direction of the prior trend has faded or not.
Extra Information:
Exhaustion: Both candles show exhaustion, if both are bullish and have same volume but both are near to a supply. Means buyers start taking profit here, so we can see reversal.

Useful Information:

  • If the interest in the prior trend direction does not faded enough, the Large Trader's campaign will fail, and the moment after the range will be a re-accumulation or redistribution.
  • If the interest in the direction of the prior trend is faded, then the large well informed traders campaign will be successful and the market will reverse the direction.
Note: This is why Phase C mainly denominated as the “Test”.
  • In accumulation Phase C will be Spring.
  • In distribution Phase C will be Up-Thrust.
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