Technical analysis is a game of probability and is often flaunted extensively by the gamut of retail traders that rely on chart patterns, momentum oscillators and volume profiling to identify entry and exit points combined with other probability sets such as Elliot Wave theory, Wyckoff and Fibonacci sequencing.
Market Makers and institutions in this context often perturb and distort the technical chart – for candlesticks are not the prudent representation of true price movement in a fixed domain interval (something I will explain in detail in an extension to this article). They in fact, the Market Makers and institutions, use iceberg orders / exchanges do the same to ladder their positions on high probability zones . They often absorb significant drawdown as they permutate the spectrum of stop losses that can hold across a given domain time interval
Usually you will notice they generate aggressive order blocks which are confluent with many traders stop losses and limit zones, they will then push the price in the opposite direction to form inducement and distort the chart picture through big moves
These moves are designed to peturb the retail trader and provide you with a series of conflicting retail patterns
These patterns confuse and disrupt the masses of retail traders whom flock given the same strategy which is often seen by all – such as golden ratio – wave 2 retracements – OTE and other. I cover alot of the behavioral finance elements in this article “Playing With Fire – Animal Spirits Ensconce Progress and Trepidation In Economies” which i wrote in 2019.
ICT alluded to the Quasimodo pattern which is in effect a displacement out of the key POI (point of interest) where traders hold their limits , then a share reversal to induce other traders
This situation in crypto given the breadth and spread of leverage liquidations allow you to be prudent, patiently either timing your entry across session intervals or days of the week
Know that the MM and insto does not give two fucks about your sessions or days of the week and if the chart is deformed they have other intentions
I will share some elaborate examples in an extension to this post.
EDIT: 0811 AEST 02/03/25