We can see the following happening:
- in the 15min timeframe there's a clear accumulation going on.
- There's a run up towards old resistance and an old orderblock (which I've not indicated)
- There's a smart money reversal
Then the interesting stuff happens.
- Because of the initial drop down from the smart money reversal, the 5 minute timeframe shows an optimal entry for a buy. So there's some accumulation of long orders happening.
- The lower timeframe makes a run towards resistance, accumulates there and then goes higher to form another high.
- The lower timeframe also creates a smart money reversal
- A lower timeframe low risk sell (which is also the same for the higher timeframe as this would have been the entire consolidation at the top there)
- We can see price drop with certainty, moving away from the consolidation there
- A very small consolidation forming distribution for the 5 minute chart and then
- Another drop down to arrive at the new distribution/re-accumulation zone for the smaller timeframe.
This is the important part.
Normally the 5 minute timeframe would continue stacking long orders here, but because of the higher timeframe premise, they should not.
- We can clearly see that the smaller timeframe distribution zone is actually the 1st distribution zone for the larger timeframe.
- Then another drop occurs and the larger timeframe arrived at it's destination. Presumably trapping or stopping out 5 minute chart traders.
Both buyers and sellers can be right within both and markets. This is only to show why one side of the market tends to make a mistake opposite to another. Note: this serves for my own training purposes, again setting in stone whatever I've learned from the ICT.