Look at the above picture. You might have seen this pattern many times.
Market is in a bull trend. It pull backs and makes a low at point A. Afterwards it goes up and later returns to the same price level and print a beautiful pin bar.
As a trader what will be your action in this area?
Some possibilities are
1.You will keep a stop loss order just below point A if you are holding long position
2.You will sell just below point A expecting a breakout to the down side
3.You will go long above the pin bar with a stop loss below the candle
Will you buy at the circled area? Who bought there? Who absorbed both stop loss selling and breakout selling? Why?