Air pockets after a fast move

[Fairman]

Air pockets after a fast move

Fast moves do not just go far. They go through nothing.

When price accelerates, resting orders get filled and not replaced. Liquidity providers step back to avoid being run over. The book behind the price is a vacuum, so even small orders keep pushing it.

A common sign is a candle that travels ten pips in a few seconds and then pauses, with a few pips of choppy movement before another leg. The pause is not a rest. It is liquidity coming back.

A scalper entering during the acceleration is paying a wide spread and taking slippage on top. An entry in the pause is cheaper but may miss the next leg.

The vacuum also works on the way back. When the market reverses, the lack of resting orders can produce a sharp snap-back that goes through the old range with equal speed.

Several traders have noticed that a pullback after an acceleration retraces much further than the usual indicators suggest. The air pocket works in both directions.

What does the retracement after a fast, news-free spike usually look like on the pairs being traded?