📈 Auction Market Theory, the backbone of price action

Most traders stare at candles without asking the real question: what is the market trying to do here? Auction Market Theory breaks it down into four simple steps:

🟡 Define Value

Price first establishes a fair value, a balance zone where most of the #trading happens. Roughly 70% of volume lives here. Think of it as the market’s comfort zone. 🟡 Test Extremes

Price pushes outside that zone. If rejected, it snaps back to value. If it breaks, we #move into discovery, a new area of business. 🟡 Imbalance

This is where things accelerate. One-sided order flow creates sharp, directional moves. These aren’t levels you fade, they’re moves you ride. 🟡 Rebalance

Eventually, the market pauses and either builds a new fair value area or returns to the old one. Balance always follows imbalance. This cycle repeats endlessly. Balance → test → imbalance → rebalance. The skill isn’t predicting the cycle but recognizing which phase you’re in and #trading with it, not against it. 💰 Powered by Startups

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