ZoneTraderPro Exhaustion Trading Pattern

The ZoneTraderPro Exhaustion Trading Pattern is a pattern that usually occurs after a strong market move without any retracement. This first retracement is the opportunity for retail traders to enter the perceived trend. Unfortunately for them the program trade that started the trend is over. The market found value and profit taking has started.

The pattern and indicator work on all markets.  In the below picture we see the Exhaustion Pattern combined with Tick Divergence to form the most powerful and consistently profitable ZoneTraderPro pattern.  In this trade the previous $TICK high was a 456 and the market made a small retracement, giving the late buyers an opportunity to enter the trade on the pullback. 

As the market trades to the blue counter trend resistance zone there are not enough buyers of the underlying cash market at the NYSE, giving us the Tick Divergence when $TICK can only reach an 253.   The statistics also tell us that about 50% of the time the market will not trade through the blue counter trend zone.  That zone printed over a minute before the market actually traded there, giving the trader the trader an excellent exit target based on statistics.  If the profit target had been set lower, you lost at least 6 ticks and were not able to take the full available profit.  The trade is followed by a successful trend trade.

Exhaustion Trade
Exhaustion Trade

Exhaustion With Tick Divergence

The exhaustion trading pattern also does an excellent job at calling a market tops and market bottoms. In the below described picture we see the exhaustion trade marking a market top. 

It is also very common to see these trades marking both tops and bottoms.

Exhaustion Tick Divergence Patterns

Importance of ZoneTraderPro Theory

Exhaustion Oil Example

Order Flow and Exhaustion Patterns

When the ZoneTraderPro Order Flow Pattern indicator is used to confirm a price pattern, we see excellent trading opportunities.

At this exhaustion pattern we had a stopping ratio, trapped buyers and the exclusive ZTP Order Flow sell signal all occurring on the same bar.