Trading with the liquidity providers

Rather than guessing "the direction", ask who has to do what next. The market is full of players under constraint, and a constraint is more reliable than an opinion.

Three readable constraints

• A large buying iceberg needs price to come down to it in order to execute. As long as it is there and has size left, the dips are bought. When it is done, the support disappears without warning.
• A desk executing a selling VWAP sells the bounces: the highs cap below the VWAP, and every push up is an opportunity for it. As long as its program runs, the VWAP is a resistance.
• After a failed sweep, the trapped have to cover: their stops become the fuel of the rejection. The more people the trap caught, the more violent the opposite move.