Can anybody explain psychology of sellers and buyers in gap up, gap down, opening uptrend quickly changing to downtrend.
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In Gap Up the previous day buyers would generally get into profits and in a tendency to book those profits sell off may come in markets, but in most of the cases the last swing low wouldn’t be breached if it continues the rally, and vice-versa for gap down
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Sellers:
If the previous day market is trending in upward direction and the market opens gap up then the sellers love to cover their position/book the profit.
If the previous day market is trending in upward direction and the market opens gap down then the sellers will usually wait and creates confusion resulting in confusing candle. But if the market opens gap down more then 50% of previous day candle then sellers usually book the loss resulting in huge negative candle
Thanku brother for the insight