The VCP is an essential pattern for swing traders, as it signals the potential for a significant price move. The pattern occurs when a stock goes through a series of contractions in price and volume, indicating that selling pressure is waning and the stock is setting up for a potential breakout. Key Components of VCP: Trapped Buyers (TBs): These are investors...
JS-Masterclass #4: The Volatility Contraction Pattern The Volatility Contraction Pattern (VCP) is a vital concept for successful traders and a key element in our JS-TechTrading strategy. In this tutorial, we will cover the following: 1. Why is it important? 2. The ‘Overhead Supply’ Concept 3. How to identify a VCP? 4. The Perfect Entry Point 1. Why is it...
This is the anatomy of a breakout trade. First, you want to see a large advance in the stock. At a minimum, price should be at least 30% above its 52-week low. Stock will often be up several hundred percent before forming this pattern. Next, you want to see a series of pullbacks - each with a shallower depth than the last. Mark Minervini refers to this as a...
Observed Carepls have similar pattern to my previous trade at Rubberex (Up trend + VCP pattern). Up trend confirmation: 1) Stock price above MA50 trend line. 2) MA50 trend line above MA200 trend line. VCP 1) Observed 3 contraction where the contraction % getting lesser. (1st contraction ~64%, 2nd contraction ~12% and 3rd contraction ~8%) 2) VCP very much related...
Currently I no longer holding any Rubberex. Just intent to record down my trading plan below for future reference. 1) Observed Rubberex is in up trend based on MA50 above MA200 trend line. 2) Observed VCP formed in Rubberex where the contraction of the price getting smaller. (1st contraction ~30%, 2nd contraction ~38% and 3rd contraction ~9%) 3) Bought Rubberex...