Note - I had no time and just sat down for a few minutes and thought - hmmm I could get some pips out of this. currently -7 pips but watching.
So I;ll describe it and you tell me .
So to the left, what I’ll call background for this trade is a pretty big decline on the 5 mintue charts the big oval far left - with much volume so lots of selling and lots of selling pressure - -
but big oval in middle suggests way less volume and selling pressure is basically gone then.
price is still floating down, but just cause of folks like me i suppose
but then there is a solid pin bar with high volume - I’ve labeled stopping volume?
So is it stopping volume, it looks like it - a few bars earlier, however (7bars) i see a high volume down bar - so telling me maybe there is a bit of selling pressure yet. but turning that around after seeing this pin, maybe that too is a sign of weakness to the downside, or some will call strength in a move up?
SO this is an inverted head and shoulders and my entry long is just sort of a hey I think the move is going up and soon so I entered. (not really a plan yet, but I am applying what I think I know. so we’ll see
Sorry the pic is small I needed that to show the whole story.
Well done PT on taking this trade.
I’m halfway into Master the Market and ejoying it. I recognize some of what you’ve posted and would love to hear Petefader’s take on this.
I have the MT4 demo but don’t think the volume figures tally with Petefaders charts.
Where can I get better volume charts from?
You’re not including the regular daily cycle with your analysis.
“big oval in middle suggests way less volume and selling pressure is basically gone then.”
This was the time of day when volume almost always decreases…you can’t read too much into it.
The other thing is how to define stopping volume. My general rule is that Volume must at least match the highest Volume of the trending move to be called stopping volume. Higher than any volume during the move is best.
If you look at during the down move…there is a high volume area, and from there it continued down. Common sense says the “stopping volume” you pointed out would not be enough to turn the tide.
Your on the right track…there are just nuances to learn.
Well here goes, sorry this may show I really don’t know wtf I am looking for.
Your question was basic and understadable enough. So I post a picture.
My answer is literally a guess. I checked the daily time frame to notice it may be coming into a bit of resistance - so based upon that , I figure it is accumulation- - -
But that defeats the purpose of the question.
I do not see - how you get ‘accumulation’ out of “two” candles???
hell I don’t even know that accumulation is right?
I think I can make a pretty strong case for teh re-distribution too- price is falling yes, and folks like me - think hmmm a big pause, and it’s fallen a long ways - it’s got to turn around . … and so we all start buying - - just as big money doesn’t give a crap which direction it goes, because they’ve already pulled in profits and no longer have a substantial position.
Therefore - it is re-distribution, but we dont’ know if price will continue to fall or not cause we don’t know what big $ is doing.
The candles you pointed out are correct. The main charactaristic of accumulation is very high volume DOWN bars following a mark down. The two candles I’m refering to are the highest volume, and they are UP bars. That means there is continued weakness. Buy orders being absorbed.
Just to be clear, anything can happen and we are talking probability. If it was to move up from here without a proper accumilation, smart money could find a way to get with it…like a large move down on news, where they finally dump shorts and switch to a long biased position as most traders sell.
VSA principles say that high volume down bars usually contain buying and its better to wait for confirmation. The next bar was equal in vol and APPEARS to be absorbing the herd. I would’ve waited for a test of that close of some type of NS (no supply).
I made my entry off the 15m. Loving the support at .2925 (near weekly close) … Nice vol increase followed by NS. Closed half the trade at +20 and now BE +2 on the other half.
My understanding is that a high volume down bar is only an indication of buying if there is a long downward wick. If it closes near the bottom of the range, and especially if it closes past a support level, it is an indication of strong selling pressure.
That, combined with the other candles, looks like accumulation to me.
It could be either or. Thats why I wait for the next bar to confirm it. Smart money uses the herd to buy into their selling. I think the herd was attracted by the long up wicks (especially the one last night) and SM used to this absorb the selling on the weekly close (the next bar after your entry confirmed this as it contained equal vol and even more so with the following bar).
Now I’m looking for .2956 to hold as this is where the most recent highest vol is (besides this morning) and there was no real selling pressure after. London pushed price up and US did as well.
And if you’re on the short side, I think you meant distribution.
Not really. It’s simple English really. To accumulate means to gather/build and to distribute means to shed/release. Gather = buy and shed = sell. I can understand your confusion if English is not your first language.
There is a great site called dictionary.com or you can even take a look at the image on the first post for further clarification.
