Thrust Pullback and Measuring Move Analysis

Thrust Pullback and Measuring Move Analysis

In this article, I am going to discuss Thrust Pullback and Measuring Move Analysis in detail. This is a continuation part of our previous article, so please read our previous article before proceeding to this article. As part of this article, I am going to discuss the following pointers in detail which are related to Thrust Pullback and Measuring Move Analysis.

  1. Thrust and pullback analysis
  2. Measuring move
  3. Volume and price analysis
Thrust, pullback and Measuring move Analysis

Strengthening or weakening of a trend may also be observed through the analysis of thrust and pullback and measured move.

THRUST Analysis

Thrust Refers to the distance between the current swing high to a previous swing high (in an uptrend) or swings low (in a downtrend). Increased thrust is a sign of potential trend strength. Shortening of Thrust is a sign of potential trend weakness.

Thrust, pullback and Measuring move Analysis

The increased thrust of T2 when compared with T1 indicating greater strength within the trend. Also compared with T3 to T2 indicating strength on the upside.

Thrust, pullback and Measuring move Analysis

Shortening of thrust, T2 when compared with T1 indicating weakness with the trend. T3 is then much shorter than T2, indicating weakness developing with the trend. T2 is unable to project to the same distance as T1 did. Something has shifted in the balance of supply and demand. The fact that the market was unable to do so indicates either a decrease in bullish pressure and/or an increase in bearish pressure.

The uptrend is showing signs of weakening

The uptrend is showing signs of weakening The uptrend is showing signs of weakening

ALL REVERSE FOR DOWN TREND

DEPTH OF Pullback

DEPTH Pullback refers to the distance with which a price retraces the previous up move or impulse move

DEPTH OF Pullback

Increased depth is a sign of potential weakness of a trend. Decreased depth is a sign of potential strength of a trend.

DEPTH OF Pullback

PULLBACK DP1 is the distance with which the pullback retraces IMPULSEMOVE IM1. DP2 is the depth with which the pullback retraces IM2. And DP3 is the depth with which the pullback retraces IME3

Note that

DP2 is a much smaller percentage of its IMPULSE MOVE IM2 when compared to DP1. D2 has a smaller depth than D1, indicating a potential weakening of the bears, and therefore strength within the price trend.

Note that DP4 is significantly larger than DP3, indicating potential strength within the bears, and therefore potential weakness within the price trend. The increased depth of pullback DP3 indicates increasing bearish pressure and a potential weakening of the trend.

The same concept applies to the downtrend.

MEASURING MOVE (relative strength of move)

Comparing impulse swing with the previous impulse swing in the same direction to find whether strength increasing or decreasing or equal

Thrust Pullback and Measuring Move Analysis in Trading Thrust Pullback and Measuring Move Analysis in Trading Thrust Pullback and Measuring Move Analysis in Trading

Volume and Price Analysis

Before going forward, we have to identify a few terms:

Swing: A high or low where the price changes direction.

Leg: The distance between two swings

General Rules for Interpreting Volume to determine the health of a trend

1.) If the PRICE is rising and VOLUME is rising, it means the market is STRONGLY BULLISH.

Volume helps us to determine the health of a trend. An uptrend is strong and healthy if volume increases as price moves with the trend and decreases when the price goes counter-trend (correction periods or ‘pullbacks’).

2.) If the PRICE is rising but VOLUME is falling, it means the market is WEAKLY BULLISH.

When prices are rising and volume is decreasing, it tells that a trend is unlikely to continue. Price may still attempt to rise at a lesser pace, and once sellers take control (which is usually signified by an increase in volume on a down bar or candle), prices will fall

3.) If the PRICE is falling, VOLUME is rising, the market is STRONGLY BEARISH.

4.) If the PRICE is falling and VOLUME is falling, the market is WEAKLY BEARISH.

Thrust Pullback and Measuring Move Analysis in Trading

Thrust Pullback and Measuring Move Analysis

Volume strength and weakness analysis

Volume is always analyzed by comparing; it can be to previous legs or swings. The reason for volume analysis is to look for increases or decreases compared to previous swings or legs to identify whether there is an increase or decrease in strength.

1) Compare the volume of the current price swing with the volume of the previous price swing in the same direction?

2) Compare the volume of the current price swing with the volume of the previous price swing in the opposite direction?

Compare the volume of the current price swing with the volume of the previous price swing in the same direction?

Means compare the current impulse swing vs previous impulse swing. What it is telling? Volume increasing or decreasing or same volume

Thrust Pullback and Measuring Move Analysis

LEFT SIDE image 1

Compare the volume of UP-swings (A) and (B). Note the decreased VOLUME of the leg (B), indicating a reduction in bullish VOLUME. Weakness is appearing on the bullish side.

When comparing the current up leg B volume with the previous up leg A volume. It shows volume decreasing. When prices are rising and volume is decreasing, it tells that the trend is unlikely to continue. Price may still attempt to rise at a slower pace, and once sellers take control (which is usually signified by an increase in volume on a down bar or candle), prices will fall

RIGHT SIDE IMAGE 2

When comparing the current up B leg volume with the previous up leg A volume. Note the increasing VOLUME on A legs, indicating an increase in BULLISH STRENGTH. BULLISH price swings are showing signs of strength

ALL CONCEPT REVERSE FOR DOWN TREND

Thrust Pullback and Measuring Move Analysis

Compare the volume of the current price swing with the volume of the previous price swing in the opposite direction?

Means compare impulse volume vs retrace volume. In general, a healthy trend has increasing volume on impulse move and decreasing volume on retrace volume

Thrust Pullback and Measuring Move Analysis

LEFT SIDE IMAGE 1

When comparing the current up leg B volume with the previous up leg A volume. It shows volume decreasing. Strength is now clearly on the BEARISH side.

The price movement is expected in the direction of strength. When prices are rising and volume is decreasing, it tells traders that the trend is unlikely to continue. Price may still attempt to rise at a slower pace, and once sellers take control (which is usually signified by an increase in volume on a down bar or candle), prices will fall

RIGHT SIDE IMAGE 2

When comparing the current up B leg volume with previous up leg A volume IT SHOWS PRICE is rising and VOLUME is rising, it means BULLISH PRESSURE OVERCOME BEARISH PRESSURE. TREND CONTINUE IN UP DIRECTION

Thrust Pullback and Measuring Move Analysis

In the next article, I am going to discuss How to Trade with Smart Money. Here, in this article, I try to explain the Thrust Pullback and Measuring Move Analysis in Trading. I hope you enjoy this Thrust Pullback and Measuring Move Analysis article. Please join my Telegram Channel to learn more and clear your doubtshttps://t.me/tradingwithsmartmoney.

19 thoughts on “Thrust Pullback and Measuring Move Analysis”

  1. @Bikash : Can you please confirm any book on trading, please tell I want to learn options trading, thanks in advance

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