Does one touch at 102 establish acceptance outside 99–101?
Reveal the worked answer
No.
A declared persistence/activity rule is needed.
Technical Analysis · TA-08 · Core
Auction theory
Was the new price accepted or merely visited?
What you will learn and prerequisites
- Explain the mechanism in the lesson question.
- Reproduce the worked comparison and recognize its failure case.
Read first: Market structure comes first
Auction theory organizes trade as a search for prices where business occurs. Value in this context means observed acceptance during a chosen window, not a fundamental estimate of a company's worth.
Understand the mechanism
Acceptance can be examined through time, volume and repeated exchange around a region. Rejection is a visit followed by movement away. Every trade still has a buyer and seller; imbalance concerns urgency and available liquidity, not the disappearance of one side.
Walk through the process
Start from a premarked balance. Declare what persistence or activity would count as acceptance before reviewing the outcome. Record both the time spent outside and the response on retest. An accepted move can still be too expensive to express through an option.
Pause before deciding
Describe what the example actually establishes and what remains unknown. A technical observation supplies context, not an automatic options entry. Contract cost, horizon, liquidity and the consequence of failure still need to match the thesis. Record the contrary branch so a named pattern cannot become an excuse to ignore new evidence.
A worked example
A prior balance is 99–101. A print at 102 followed immediately by 100 supports rejection. A separate branch holds 101.50–102.20 over several completed observations with activity concentrating there, supporting migration. Neither determines tomorrow.
Auction theory—worked comparison
Vertical: Spot (USD)
Horizontal: Auction observation
1. Fictional example
Read the graph as a data table
| Auction observation | Fictional example |
|---|---|
| 1 | 100 |
| 2 | 100.5 |
| 3 | 101 |
| 4 | 102 |
| 5 | 101.8 |
| 6 | 102.2 |
| 7 | 101.6 |
What would invalidate the reading?
Calling a profile cluster true fundamental value mistakes historical trading for business valuation. The entire auction can move after new information.
Check your understanding
Try the question before revealing its answer. These are reading checks, not trading certification or a site completion record.
What is the critical failure to avoid?
Reveal the worked answer
Calling a profile cluster true fundamental value mistakes historical trading for business valuation. The entire auction can move after new information.
Explain this risk before treating the example as a decision rule. A correct calculation does not guarantee a favorable market outcome.
Return to the question: Was the new price accepted or merely visited? State the observed facts, the assumptions and the failure condition separately.
Sources, assumptions and downloadable script
External references support definitions and conventions. Worked scenarios and prose are original. No current quotes or dealer inventory are claimed.
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