1/ A GUIDE ON VOLUME CLIMAX 📉📈
~A THREAD 🧵~
Please like & RT if you find this useful
@PAlearner @Puretechnicals9 @SJosephBurns @SouravSenguptaI @PAVLeader @annacoull
~A THREAD 🧵~
Please like & RT if you find this useful
@PAlearner @Puretechnicals9 @SJosephBurns @SouravSenguptaI @PAVLeader @annacoull
2/▶️In the business of speculation there are operators and market makers, who have the tools and the ammunition to rig the price.
▶️We have to use volume to know whether the price movement is true or is moving abnormally.
If price is the king, then the volume is the queen.
▶️We have to use volume to know whether the price movement is true or is moving abnormally.
If price is the king, then the volume is the queen.
3/ ▶️When the major tops and bottoms are formed two things happen:
✅Generally after a prolonged uptrend, the retailers are buying out of greed and the institutions are selling.
✅After a long downtrend, the biggies are buying and the retail is selling out of fear.
✅Generally after a prolonged uptrend, the retailers are buying out of greed and the institutions are selling.
✅After a long downtrend, the biggies are buying and the retail is selling out of fear.
4/ ▶️When we learn about volume, we are taught that the more the volume during a trend the better it is.
But, it’s only half the truth, too much of anything is bad and that is true for volume also.
#knowledgesharing #StockMarket
But, it’s only half the truth, too much of anything is bad and that is true for volume also.
#knowledgesharing #StockMarket
5/ ▶️Most of the times volume climax appears when a stock breaks out after a long extending move, and then both the prices and volumes fail to hold at higher levels. During this time, the prices and volumes will have their biggest increments as compared to the past few candles.
6/ ▶️By seeing these big moves and volumes retail traders jump in to buy the stock as they think that if you don’t buy it now you will lose a great opportunity to earn money.
7/ ▶️The institutions are successful in their mission, and now it’s time to dump the prices, and again buy from the retail at lower prices and this cycle repeats again and again.
8/ When the market has moved sharply lower in a price waterfall and a bearish trend, supported by masses of volume, this is a buying climax. It is the wholesalers who are buying and the retail traders who are panic selling. A
buying climax for us represents an opportunity.
buying climax for us represents an opportunity.
9/ At the top of a bull trend, where we see sustained high volumes, then this is a selling climax. The wholesalers are selling to the retail traders and investors who are buying on the expectation of the market going to the moon!
10/ Example of Volume Climax seen in #SorilInfra
11/ Example of Volume Climax seen in #CAMS
12/ It should be noted that volumes should dry considerably after volume climax, if they are retracing with above average volumes after the volume climax, the stock may have more steam left. Like all approaches even this is sometimes fails. ɴᴏ ʜᴏʟʏ ɢʀᴀɪʟs ɪɴ ᴛʀᴀᴅɪɴɢ.
11/ The technique is a subjective one, requiring discretionary decision making. I believe there are no short cuts to success. Technical analysis, in all its aspects is an art, and interpreting the volume price relationship is no different.
12/ It takes time to learn, and time to be quick
in your analysis. However, just like the tape readers of the past, once mastered is a powerful skill.
in your analysis. However, just like the tape readers of the past, once mastered is a powerful skill.
13/ Thank you.
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