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Accumulation

HOW-TO: Accumulation Strategy 2024What if instead of buying a stock, crypto, currency only once and holding until we are in profit, we split our strategy capital and buy several times, until the total is in profit ? Yes, that is DCA you’d say. Ok, but what if instead of buying at predetermined intervals, we bought at oversold RSI, or on a double bottom, for example ? That’s the idea behind the Accumulation Strategy, which I’m going to explain in detail in this article. █  Simple Example The strategy comes with several features, and the easiest way to explain them is through examples. The Max Active Deals input allows to limit how many times the strategy can trigger a buy in a trade, just like the pyramiding setting. It can go up to 100. In this example, the strategy has 10 max active deals. and is using the RSI feature to buy when RSI crosses below a configurable threshold, here 25. Note: to get stronger signals, the RSI time frame has been set to 1 hour, since the chart is in a 30 min time frame. In this trade, the strategy bought 8 times (yellow arrows) before selling at take profit, but it could have bought twice more. █  Take Profit Feature Customisable in the input tab, this feature allows you to set one or multiple take profit(s). You can set the value in either %, pips, or Auto mode. To create multiple targets, increase the Number of take profit and set the Step between each TP. In our previous example, instead of just one, I set 3 TPs with 1% value and a step of 1. The strategy will sell progressively at a quantity split even at each take profit, until the last TP is hit. Note: Using multiple take profit is often used to improve risk management in trading. █  Built-in Entry Options The strategy comes with several built-in indicators, such as the RSI that we’ve seen, but here’s the list: MTF RSI cross, RSI divergences MTF Stochastic cross MTF Bollinger Bands cross Top & Bottoms Double Top & bottoms Higher/Lower Lows/Highs Custom External Entries If you want to use ANY external indicator from the TradingView library and use it as an entry signal, you can! For example, let’s use the Squeeze Momentum Indicator by Lazybear. After adding it to the chart, we select the first plot which is the histogram. Then we select the condition “crossover” and “0”. It will create a buy when the histogram turns green. █  Trend Filters In trading, we try to avoid going against the global trend. The strategy comes with several built-in trendlines, MTF, or you can use ANY external trendline from the TV library. The strategy offers other built-in filters such as volume, overbought in range/trending market, or flat market entry filters. █  Stop Loss The stop loss can be turned on/off. You can set the value in either %, pips, ATR or Auto mode. Note: When to use a Stop Loss? Using a stop kind of defeats the purpose of the strategy, but it can be useful if you plan to trade highly volatile and risky coins (remember LUNA ?) That is why the option is there. █  How to use the strategy The indicator access is unlocked by subscribing on my website. See the links below this article. █  Setting up a strategy You can set up a strategy on your own chart in just one click using the preconfigured charts I will share below, or you can simply add the indicator yourself and play with the settings. Backtesting Backtesting is automatically done in the Strategy Tester Tab. Creating Alerts Once you have your strategy setup on the chart: 1 - Set the alert message in the indicator inputs (scroll to the bottom, you will find an “alert’ section) 2 - Save your chart and do not touch it anymore unless you want to update your alert (optional but recommended) 3 - Create an alert on Cyatophilum Accumulation Strategy, using the option “alert() function calls only” (this is really important!) Only one alert is needed to handle all the strategy events! (entry, take profit, stop loss, etc.) Even a free TradingView user can create a strategy! Automation The subscription that I offer also comes with Automation bots using the Binance spot trading API . Important: if you wish to automate your strategies, make sure your TradingView account has access to alert webhook notifications . That’s it for this tutorial! Pretty easy right? No, I know it can get complicated at first. 😣 That is why I make preconfigured charts. Once you have access, click on the chart link, then click “copy”, then “save” your “layout” to get your own chart that you can use and edit. Enjoy! █  Preconfigured charts BTC/USDT Chart: www.tradingview.com ETH/USDT Chart: www.tradingview.com BNB/USDT Chart: www.tradingview.com MATIC/USDT Chart: www.tradingview.com EGLD/USDT Chart: www.tradingview.com
Education
by cyatophilum
Solana - Wyckoff Mark Up ExampleSolana vs. Wyckoff Logic SOLUSD example of mark up in the Wyckoff logic schematic. If unfamilar, there are market phases according to Wyckoff Logic: Accumulation: The phase where the market stops falling and begins to form a base, suggesting that demand is starting to overcome supply. It is characterized by a selling climax, where the price falls sharply, and the volume is high, indicating panic selling. After the climax, there is typically a phase of sideways movement, with occasional tests of the lows. This phase is labeled as the cause, setting up for a new upward trend (effect). Markup: After accumulation, the price starts to rise, signifying that the market is entering the markup phase. This phase is indicated by a rise in price away from the accumulation zone, often with increasing volume, which is interpreted as the start of a new uptrend. Distribution: This is the phase where the market tops out and is characterized by a buying climax. Supply begins to overcome demand as the "smart money" starts to distribute their holdings to the market. The distribution phase is also labeled as the cause for the subsequent downtrend. Markdown: Following distribution, the market enters the markdown phase where prices start to fall consistently. This phase is shown by a break of support levels with increasing volume, indicating a strong presence of selling pressure. The image also depicts the concept of "Volume" with a histogram at the bottom. The volume bars are colored in red and blue, generally indicating selling and buying volume, respectively. The histogram helps traders identify moments of high or low volume, which can be a sign of the strength or weakness of a particular price movement. Wyckoff's analysis technique is grounded in the study of price action, volume, and time, as they relate to supply and demand. It is a tool for understanding the market's structure and potentially predicting future price movements by identifying the actions of large institutional traders and investors.
COINBASE:SOLUSDEducation
by kingthies
Overview of accumulation breakout patternsWelcome to my new educational post As you can see in BCH/USDT chart, One weekly green candle is enough to overcome 1 year of bear/consolidation zone !! If you are surprised, let me tell you this is very normal behavior in crypto market as we saw this happened many times before Another example : DOGE / USD When to expect a coin to explode like that ? The accumulation pattern have many stages 1- After a period of bear market starts to deccelerate the price action becomes flat and usually take long time of horizontal accumulation between main supply and main demand (weeks / months / years ) 2- Multiple fakeouts can happen to make both buyers and sellers exhausted *The best buy (smart money) after the price reclaim the main demand after stoploss taken the second best buy after valid breakout (candle closing) The shorting is the vice-versa 3 - Finally the strong breakout take place and overcome many weeks / months or even years of bear / consolidation/ accumulation zone 4- After the coin make breakout many traders will avoid it in the early breakout but it will continue rise and rise ..and every time it rises more it becomes more risky Later it will turn to be crowded coin and many newcomers buy it at very high prices at this stage it becomes a gamble and MM will sell their profits on newbies Note : The distribution phase is the opposite of accumulation phase Note : not all coins can survive bear market, So the fundamental view has great role to support the coin I can tell you about potential coins in accumulation now which have chance to do similar thing : #FTT - #DYDX DO you know another potential coins in accumulation ? Tell me in comment section below ⬇️
Education
by Babenski
49
How to Use the Accumulation/Distribution IndicatorLearning how to identify accumulation and distribution in an asset is an important skill to have for any trader. Luckily, there’s a handy tool we can use: the aptly-named Accumulation/Distribution indicator. In this article, we’ll show you how this accumulation/distribution indicator works, where it’s best applied, and how you can combine it with other tools to boost your odds of success. What Is the Accumulation/Distribution Indicator? The accumulation/distribution indicator, also called the accumulation/distribution index, accumulation/distribution line, and abbreviated to A/D, is a cumulative indicator that uses price and volume data to measure the strength of an asset’s trend. It helps traders identify buying and selling pressure in the market and can show whether an asset is likely to continue trending or is due for a reversal. It was created by renowned trader Marc Chaikin, who also developed the famous Chaikin Money Flow indicator. Accumulation vs Distribution Accumulation occurs when buying pressure outweighs selling pressure, resulting in price appreciation. Conversely, distribution is where sellers have the upper hand over buyers, creating downward momentum. In practice, the plotted A/D line will move up when accumulation is present and down when distribution occurs. Accumulation/Distribution Oscillator Formula and Components The ADI seeks to quantify an asset's buying and selling pressure by considering its trading range and trading volume. First, it calculates the Money Flow Multiplier (MFM) using the following formula: MFM= ((Close−Low)−(High−Close)) / High−Low This results in a reading between -1 and 1. When the price closes in the upper half of its high-low range, the MFM will be positive. If it closes in the lower half, then MFM will be negative. In other words, if buying pressure is strong, the MFM will rise, and vice versa. Second, it generates the Money Flow Volume (MFV) with the following: Money Flow Volume = MFM × Volume For the first candle in a given chart, the MFV is the first A/D value. Since the indicator is cumulative, the MFV is added to the previous A/D value. In essence: First Calculation = (ADI = MFV) Subsequent Calculations = (ADI + MFV) This then creates the A/D line. While it may seem unnecessary to know the formula, it can provide us with significant insight into how an accumulation/distribution rating is given. For example, a strong bullish trend may cause an asset to close high in its trading range, producing an MFM reading close to 1. If this is backed up by high volume, the A/D line will surge upward. However, if the volume is lacking, then the A/D may only increase slightly. Thankfully, we don’t need to perform this calculation ourselves. With the free TickTrader platform we offer at FXOpen, you’ll find the accumulation/distribution indicator and dozens of other tools ready to help you navigate the markets. How to Use the Accumulation Distribution Indicator There are three popular ways to use the A/D indicator: identifying reversals, trend confirmation, and trading breakouts. Identifying Reversals One of the most effective uses of A/D is to spot potential reversals using divergences between the price and the A/D line. A bullish divergence occurs when the price falls, making lower lows, while the A/D line trends upward, creating higher lows. Conversely, a bearish divergence can be seen when an asset makes new highs, but the A/D puts in lower highs. It essentially shows us that while the price is moving in a specific direction, the underlying pressure supporting the move is waning. The example above demonstrates that fewer sellers are participating as the trend progresses lower; eventually, buyers take over and push the price much higher. Trend Confirmation A/D line can also be used to confirm the direction of a trend. In this context, traders monitor the alignment of the line with the price action. In an uptrend, both the price and A/D should be rising. If the A/D moves in the same direction as the price, it confirms the strength of the uptrend and suggests that the buying pressure is likely to continue. As in the chart, traders could have used the A/D and price alignment to position themselves in the direction of the bull trend. Similarly, during a downtrend, the price and the A/D should be falling. If the A/D is falling alongside the price, it indicates that the selling pressure is strong, and the downtrend is likely to persist. Trading Breakouts Lastly, A/D can help traders confirm breakouts beyond support/resistance levels. If there’s a critical level that a trader is watching to jump in on the breakout, a breakout beyond a similar level in the A/D indicator can signal the start of a new trend. In the example, we see a strong resistance level, both in price and the accumulation distribution chart. As the move is confirmed by A/D, breaking out above both dashed lines, traders have confidence that the price is ready to move higher. Integrating the Accumulation and Distribution Indicator with Other Tools While the A/D indicator is a valuable tool on its own, it’s best to use it in combination with other indicators to help filter out false signals and improve the accuracy of your predictions. Let’s take a look at two indicators to integrate with A/D: moving averages and the Relative Strength Index (RSI). Moving Averages Moving averages are a popular tool used by many traders to determine the direction of a trend, especially when two moving averages cross over. As mentioned, the trajectory of the A/D line can show traders that a trend is supported by volume; similarly, a price sitting above or below a moving average can indicate a trend’s direction. Using the two together can provide an at-a-glance reading of a trend, which can be extremely useful for trend-following traders. In this example, we’ve used the Exponential Moving Average (EMA) cross indicator in TickTrader, with two 20-period and 50-period EMAs. The fast EMA crosses above the slow EMA, showing that a potential bullish trend is forming. The price continues to stay well above the 50-period EMA as time progresses, demonstrating that there’s a strong bull trend. We also have confirmation from the A/D line that the bullish momentum is backed up by supporting volume. Seeing this, traders can be confident that the trend will continue. When the EMAs cross over bearishly, as seen on the right-hand side, traders may start looking for the A/D line to confirm that a bearish trend has started and exit their position. RSI Similar to the A/D indicator, RSI can be used to both spot divergences and confirm trends. The divergences are the same as A/D; a lower low in a price with a higher low in the RSI indicates a potential bullish reversal, while a price making a higher high and a lower low in RSI is regarded as bearish. Meanwhile, an RSI reading above 50 is typically seen as bullish, while below is bearish. Using the two indicators together can offer traders extra confluence that the market is headed in a particular direction. In the chart shown, we can see that the price is making a lower low. However, the Apple stock’s accumulation/distribution line shows a bullish divergence, as does the RSI. Traders could have marked the most recent area of resistance (dashed line), and then waited for the price to break out above it before looking for an entry. This move was confirmed by the RSI moving above 50, showing that bullish momentum is truly entering the market and offering multiple factors of confluence. What to Do Next You now have a comprehensive understanding of the accumulation/distribution indicator, including its formulation, its three main uses, and how to combine it with other indicators for extra confirmation. Ready to put your newfound knowledge to the test? You can open an FXOpen account to apply what you’ve learned and hone your trading skills across a diverse range of markets, from forex and commodities to stocks and indices. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
3
📈How to Day Trade with Trend: Accumulation📍The accumulation stage in trading refers to a period when market participants are accumulating a particular asset, typically with the expectation of a future price increase. During this phase, the price of the asset tends to range between two significant levels known as support and resistance. Traders closely observe these price levels as they provide valuable insights into the potential direction of the upcoming breakout. 📍Support and resistance levels are psychological and technical barriers that the price of an asset tends to respect. 🔹Support represents a price level where buying pressure is expected to outweigh selling pressure, causing the price to "bounce" or reverse its downward movement. 🔹Resistance represents a price level where selling pressure is expected to exceed buying pressure, causing the price to reverse its upward movement. 📍During the accumulation stage, the price of the asset oscillates within a range defined by these support and resistance levels. Market participants who believe in the potential upside of the asset accumulate it by buying at or near the support level. As the price approaches the resistance level, some traders start to take profits or sell their holdings, creating selling pressure that prevents the price from advancing further. This creates a cyclical pattern of price movement between the support and resistance levels, resulting in a range-bound market. It's important to note that the accumulation stage and subsequent breakout are not always easy to predict. False breakouts, where the price briefly moves beyond a support or resistance level but quickly reverse 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
2
Uncovering Wyckoff Accumulation Secret PatternWyckoff Accumulation & Distribution is a trading strategy that was developed by Richard Wyckoff in the early 1900s. It is based on the premise that markets move in cycles and that traders may recognize and use these cycles. In accumulation phase Wyckoff strategy involves identifying a Trading Range where buyers are accumulating shares of a stock before it moves higher. This allows traders to enter into positions at lower prices and benefit from the eventual price increase. Wyckoff Accumulation is an effective way for traders and investors to gain on market movements and make profits from their trades. The Wyckoff Trading Ranges feature a chart pattern called Descending Wedge. This pattern involves two trendlines, one falling and one rising, which converge to form a wedge shape. This pattern indicates that the price of an asset is likely to break out in the direction of the falling trendline. In my understanding, "Continuous Weakness" means a shift away from selling towards buying. Sellers fail to hold the pressure, so buyers take the lead leading in D,E: MARKUP phases. Kind regards Artem Shevelev Please check out my older Education Ideas Consider put like and follow my page for more updates)
BITSTAMP:BTCUSDEducation
by ArShevelev
3
📊 Four Market PhasesThe four market phases in trading are characterized by different levels of buying and selling activity, trading volumes, news and sentiment, and price trends. By understanding these phases, traders and investors can better anticipate market movements and position themselves to take advantage of opportunities as they arise. 🔹 Accumulation In this phase, the market is characterized by low trading volumes and a lack of clear price trend. Buyers and sellers are more or less balanced, and prices tend to remain within a certain range. This phase is often seen as a period of accumulation by smart money investors who are slowly building up positions before the market begins to trend. 🔹 Uptrend In this phase, the market experiences a sustained rise in prices, driven by increasing demand from buyers. This is typically accompanied by higher trading volumes and positive news and sentiment. Traders may look to buy into dips during this phase, in order to take advantage of the overall trend. 🔹 Distribution In this phase, the market begins to show signs of weakness, with prices starting to trend sideways or even decline. This is typically accompanied by lower trading volumes and negative news and sentiment. Smart money investors may begin to sell into strength during this phase, as they look to lock in profits before the market turns lower. 🔹 Downtrend In this phase, the market experiences a sustained decline in prices, driven by increasing supply from sellers. This is typically accompanied by lower trading volumes and negative news and sentiment. Traders may look to sell into rallies during this phase, in order to take advantage of the overall trend. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
1
How to Study Price and Wave volume RelationshipHi 👋 In this post I would try to throw some light on the Price & Wave Volume relationship (popularized by late David Weis). This method may help trades in two ways: 1️⃣Ride the trend 2️⃣Picking the end of a rally I came across this chart randomly and found that there are a few principles that I can discuss with the help of this chart. Before reading any further I want to disclose that this technique was not originally developed by me. However, different authors may have different interpretations when it comes to some techniques of discretionary trading. This is a small piece of what I have learnt as a big follower of price action trading. I don’t want to go for bar by bar analysis here due to time and space constraints, so I have marked a few important places (as numbers in green rectangles) that are important and need to be discussed. The numbers in white are the cumulative wave volume in crores. This means just keep on adding the volume of each up bar until there is a reversal. I have taken the reversal a 2points on closing basis. Which means I keep on adding the volume until the price closes 2points below the close of the previous bar. The opposite is true for down waves. 🚀Point1 If you look at the upwave preceding the downwave at point1, it is the sharpest of the rallies from March 2020 lows (scroll back the chart a bit). Also wave volume is the highest (37cr) compared to 10,19 and 18cr on previous upwaves. At point 1 there is 10cr volume on the downwave, which is the highest on any downwave in the rally from Mar2020 lows. This is an alarming signal that sellers are getting active. But this may not impress us to liquidate our trades as we need further evidence to confirm this weakness. 🚀Point2 Here we have very high volume accompanied by the widest bar (in the rally) but closing in the middle. These three things confirm here that sellers have stepped in and the stock is weakening. 🚀Point3 There is a rally back to the highs but this time with lesser volume (29cr compared to 37cr) than preceding rallies. This is our second confirmation that buyers are turning there back at this level, at least for now. This is a sure exit opportunity for investors who bought at the lows. 🚀Point4 There was a sharp reaction with huge volume of 31cr and very wide bar, closing off of its lows. At this point there is still confusion that the trend has reversed or not. If it was a reversal then there would have been a follow through of 31cr volume on the downside but it is not so. For the next 3 days price sustained above the low of this wide downbar. 🚀Point5 The sellers again tried to push to the stock down but look at the volume in this wave. Are you getting it now? Its just 13cr instead of 31cr on the last downwave. This infers here that seller are not interested. So if seller are not interested then what will happen? Buyers will take over. 🚀Point6 The sellers tested the level of 1, 4 and 5 a few more times, buyers holds it and that develops a support. There was a very strong rally (compared to rallies in the last one year) back to the highs and volume is again 23cr which is lesser than volume at previous highs. Lesser volume could have 2 interpretations – there are less sellers this time and/or buyers are not interested. 🚀Point7 The stock is back to the support again. But volume on downwaves is much lesser in relative terms. In fact, it decreasing from 13 to 4 and then 2cr (see chart). Where have the sellers gone? They don’t want to sell at the support. 🚀Point8 Lack of selling leads to buying and eventually to new highs. Notice that there in very less volume at point 8 (only 4cr). This time sellers attempt (5cr) was failed quickly (without hitting support) and new highs were made outside resistance (developed at 2, 3 and 6). At this stage, when the price is closing outside the resistance, I would expect more volume to come in. More volume at this stage would indicate that buyers are interested but that is not the case here. 🚀Point9 Point 8 looked like a failed breakout attempt. The price fell back into the trading range (between support and resistance ). If I look at volume here, it is 15cr on this downwave. In the immediately preceding fall with 17cr it touched the bottom end of the range but this time with 15cr it is just at the middle of the range. This signifies re-accumulation at point 9. 🚀Point10 Re-accumulation lead to a rally back into resistance. We have 13cr as of now. Its too early to say, before this upwave ends, but 13cr is less (for me at this point) to push it any further. It seems holding back in the range. 🚀🚀Final thoughts This is a very nice and rare example showing both distribution (by the seller at resistance level ) and accumulation (by the buyers at support level ). Normally the price peeps outside the range on both sides and fails to follow through, until there is a decisive break on either side. I hope you learnt something new in this post. Now you can do one thing, press 🚀 to encourage me to write more educational stuff. Thanks for reading.
NSE:ADANIPORTSEducation
by Bravetotrade
TRADE FROM ACCUMULATION ZONESHello everyone! Today I want to analyze a very useful topic - how to trade from accumulation zones . Accumulation Surely you have noticed that the price first makes an impulse, then stops, after which it makes an impulse again. This is the simplest scheme of price movement. Each stage can be disassembled and a good trader should be able to trade at each stage. Accumulation is the stage at which the price moves sideways, that is, accumulates. This stage exists due to the fact that the price cannot constantly move up or down, there are moments when the strength of sellers or buyers ends and you need to take a break, gain a new position and push the price. Trading is possible inside the accumulation, but using a different technique, today we will discuss how to trade when the price has left the accumulation zone. beginning First , you should note the resistance and support levels between which the price moves in the accumulation zone. They are usually easy to identify. If you can't identify them, don't trade, wait for a situation that will be clear to you. Exit At the moment when the price goes beyond the accumulation limits, we start looking for an entry point. Most often, if the price has broken through the accumulation zone down, the price will continue to go down. But there are times when the price makes a false breakout and goes in the other direction. Such moments occur and you should not forget about them. It is impossible to always know where the price will go. If the price has broken through the zone down, you can go straight into the short - it will be an aggressive entry. It is aggressive because there is a possibility that this is a false breakdown and the price will go further up. A conservative entry will be when the price rolls back to the zone and begins a reversal from it. A reversal means that the price cannot go higher back into the zone and will fall down. Similarly, long trades are opened only in the other direction. As you can see on the chart, accumulation zones appear not only during the reversal, but also during the continuation of the trend. In situations where the price after the accumulation zone went further towards the previous trend, it means that the trend is strong enough, although there was resistance on the other side. Positions are always opened the same way: 1. Identify the area of the field. 2. Waiting for the breakdown. 3. Looking for an entry point (aggressive entry or conservative). This technique is very simple and it works quite well . The main thing is to follow the rules and don't risk too much. In addition, the direction on the higher timeframe is important. And don't forget the most important rule: the trend is your friend . Thanks! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
11
Relationship Between BTC.D and BTC price and Altcoin priceshello friends today i want to tell you how can you peredict altcoins behavaior according to the bitcoin price and bitcoin dominance. so come with me to say you how it works: liek you can see in below chart : if BTC price increase and BTC .D( Bitcoin Dominance) increase too ====> Altcoins price decreases. if BTC price decrease and BTC .D increase ====> Altcoins price Dump and decrase heavy.this is dump phase. if BTC price go sidewalk(without up or down) and BTC .D increase ====>Altcoins price dont change and this is accumulation phase. if BTC price increase and BTC .D decrease ====> Altcoins price increase quickly and this is altseason. if BTC price decrease and BTC .D decrase too ====> Altcoins prices go sideways. if BTC price go sidewalk and BTC .D decrease ====> Altcoins prices increase. hope this article be useful for you. please support me for more useful subjects. thanks friends.
CRYPTOCAP:BTC.DEducation
by TraderAmin-KZ
Dark Pool Buy Zones™Some traders try to watch Level 2 data to discern when the large-lot orders come through to get an idea of when the big institutions are accumulating in the Dark Pools, but you really don’t need that. Plus, whether that’s accurate is questionable since Dark Pool transactions are reported way after they were transacted. “Dark Pool buy zones” is a term I coined because Dark Pools use precise controlled orders that trigger automatically over extended periods of time. Since the Buy Side Institutions using the Dark Pools are primarily buying for the long term, price can sometimes drop down before moving up, creating a range in the price action, what I call “the buy zone.” When you learn to recognize the Dark Pool Candlestick and Indicator Patterns, you can be ready for the bottom to develop and look for Dark Pool accumulation patterns to plan your trading. Below is an example. Ford is still falling, but the Dark Pool buy zone support is close. I’ll be waiting to see how the bottom develops around that level before making my decision to trade. Happy TechniTrading! Please like and follow if you found this interesting.
NYSE:FEducation
by MarthaStokesCMT-TechniTrader
1
HOW-TO: Accumulation StrategyIn this idea I will make an in-depth tutorial on how to use the Accumulation Strategy and how to automate it. █ PRESENTATION The strategy is in the form of an invite-only script providing backtesting and alerts. Here is a link to the script page: Goals  • Steady profits. Smalls profits over time and no drawdown as long as you don't sell in loss.  • Peace of mind. It is meant to be a "set it up once and let it run for a while" automated strategy.  • No loss. Never sell in loss. Drawbacks  • Small profits. No leverage, just spot trading.  • Lengthy trades. Trades can take up to several days or even weeks in worst case scenario. We will see how to avoid that. Strategy  • Use volatility. Take advantage of small waves in the market.  • Buy the dips. Use a combination of technical indicators to buy bottoms or oversold prices.  • Accumulation. Buy small amounts several times as price moves to better position yourself.  • Take profit from total volume. Sell everything once price is in profit at the configured percentage value. █ BACKTESTING Backtesting is the process of creating a strategy. Finding a good pair  • By Market Cap. Take a category you are comfortable with (DeFi, Metaverse, DAO, etc) then look at coins in the top 10 market cap.  • Volatility. The more volatile the coin is, the better.  • Ascending/Sideways trend. This is where the strategy will work the best. We will see just below how to filter off bear markets.  • Pick a timeframe. Usually from 5m to 30m, can be higher or lower. I look at the average bar, I like something around 0.5-1% bar height, the chart should not have too much noise, otherwise go higher timeframe. Though not too high, since we want to take advantage of the volatility. Build your entries You first have to create "entries" that will then end up being a buy signal, after passing through some optional filters.  • Entry settings    • Go Long/Go Short     The indicator allows to trade both sides of the market. In these examples, I will only go long-only for simplicity.    • Max active deals     This is the maximum consecutive buy signals allowed for the strategy. Example with 10: the strategy will buy up to 10 times until take profit is hit.    • Minimum bar delay between deals     Puts a minimum delay between each entry signal, in bars.    • Minimum price difference in % between deals     Sets a minimum price percentage between each entry signal. Leave at 0 to disable.  • STOCH & RSI entries   Creates entries when the RSI or STOCH crosses below a configurable value. The length and resolution of the oscillators are configurable.  • Other entries   Signals using some of my other custom indicators are BUILT-IN:    • Top & Bottoms    • Higher lows, Lower lows    • RSI Divergences Entries are combined using a OR logical gate. I usually go with RSI and STOCH entries on higher timeframe using the resolution input, then add Top & Bottoms or Higher lows if I feel like it needs more entries. Once you have chosen a combination of entries, let's move on to the filters.  • Trend Filter   You can pick a trendline from a list, usually a simple EMA 200 will do the trick. Using slope change or price cross, it will filter off entries if the market wave is bearish, thus avoiding taking risky trades.  • MTF Trend Filter   The same thing, but higher timeframe. It is used to filter with the market wave, meaning the more global trend. It is a good habit to combine the 2 trend lines to drastically reduce the risk. The Adaptive Tilson T3 is one of my favorites, combined with the CROSSOVER condition.  • RSI filter   Useful with entries other than RSI to filter overbought entries. Use a higher timeframe to filter more aggressively. I would advice to use all 3 filters if you can. It will prevent getting into lengthy trades as we will see below. Adjusting  • Backtest parameters   First you should go to the backtest parameters tab. Here is what is used in this example:    • Initial capital: 1000 €    • Order size: 100 € (the max deals is 10 here, total deals should not exceed initial capital)    • Pyramiding: 10 (the number of max deals)    • Commission: 0.075 % (Binance spot trading)  • Take Profit    Configure the take profit, in price %. I usually go with something from 1 to 4 %. In some cases, activating the trailing TP can be interesting.  • Backtest results   In addition to the strategy tester, the indicator has a backtest panel containing useful information. Here are some of it:    • Net Profit (% and fixed)     Useful to see how volatile a pair is compared to others.    • Avg # Bars in a deal     Average number of bars a trade can take to be completed. < 100 - great, > 100 - can be improved, > 200 - bad    • Avg # Days in a deal     Same information but in days.    • Max # days in a deal     Maximum number of days a trade took to be completed. < 30 - great, > 30 - can be improved, > 60 - bad Example of settings that can be improved: The Avg # bars and Max # Days in a deal are flashing red and orange. It means it can be improved. By adding the 3 filters, increasing the stoch entries timeframe and reducing the take profit to 3%, we are getting a much more secure strategy: All the settings are in green, we know that over 421 days, the maximum days a trade took is 13.78, and a trade takes 1 day in average. █ AUTOMATION When you subscribe on my website, you unlock access to the indicators but also an automation system for Binance. The system is using the indicator alerts to automatically place orders on Binance using their SPOT Trading API. You can find a tutorial here . Create a bot The first step is to create a bot for your strategy. Make sure you have enough capital in your account for the strategy. Set the order size/quantity with the same value as in the indicator backtest parameters. Create the alert I recommend to create one chart layout per strategy. Once you are done setting up the indicator, set the alert messages. You will find the text fields at the bottom of the indicator input settings. You will typically need to fill "Long Entry" with the buy message, and "Long Take Profit" with the sell message. Once you have done that, save your chart. Click add alert on the indicator. Select the condition "Alert() function calls only". Tick "Webhook URL" and set the URL. It can be the one from my bot system or if you use another bot system with webhooks it will work too. Give your alert a name and click create. Make sure the alert is created in the alert tab. The alert will save the indicator, settings and timeframe at the moment you create it. If you decide to change an indicator setting, you must remake the alert. Fees If you trade on Binance, I recommend to enable BNB Spot trading fees, and always have a few BNB on your account to pay for the fees. That way, you can use a sell 100% quantity order without needing to take fees into account, unless you are using the strategy to trade BNB. In this case, use something like sell 99% in your sell message. Supervise Once your strategy is running, you can supervise it in the strategy tester in real time, in the alert logs and in the bot logs. ═════════════════════════════════════════════════════════════════════════ █ SCRIPT ACCESS Indicator and automation tools access can be purchased on my website. The link is in my signature below. █ SAMPLE USE CASES I will update this HOW-TO idea whenever I backtest a new pair, sharing the configuration and a link to a shared chart that you can copy and edit yourself. Example on MANA/USDT: Link to the chart: www.tradingview.com Thanks for reading. More to come below.
Education
by cyatophilum
2
HOW TO: Differentiate Accumulation vs DistributionHello, in this video I discuss a current active trade on AUD/JPY (see my page) and how I decide whether a consolidation phase is in accumulation for a wave up, or distribution for a wave down... I believe that the AUD/JPY pair is in a distribution phase and I explain why in the video. don't usually make videos and I'm sort of congested today so sorry if sound quality isn't subpar... :) safe trading and have a good weekend!
Education
by UnknownUnicorn37609548
Mastering The Wyckoff Method of Technical Analysis Introduction: ----------------------------------------------------------- In the time period of April in 2021 Bitcoin reached its local high of roughly US $65,000 per coin, shortly after when May came along many social channels quickly lit up with the now infamous “Wyckoff Distribution Schematic” (This was one popular video that described it here: www.youtube.com), and shortly after BTC came crashing down back to the $30,000 region playing this schematic almost perfectly. I myself was trading Bitcoin using the Wyckoff Method at this time, and I was introduced to a plethora of new traders and investors trying to understand the complicated Wyckoff method, but the fact of the matter was, many were sharing or educating others in incorrect ways to use this method. From this day I took more of an interest in educating others in the Wyckoff Method, and below I am going to pick apart, introduce and help you master some of the key concepts used in this method of analysis. Bitcoins Chart March-May 2021 Read more about the Crash in 2021: www.aljazeera.com Who is “Wyckoff”?: ----------------------------------------------------------- Richard Demille Wyckoff (November 2, 1873 – March 7, 1934) was considered one of the five “titans” of technical analysis, along with Dow, Gann, Elliott and Merrill. At age 15, he took a job as a stock runner for a New York brokerage. Afterwards, while still in his 20s, he became the head of his own firm. He also founded and, for nearly two decades wrote, and edited The Magazine of Wall Street, which, at one point, had more than 200,000 subscribers. Wyckoff was an avid student of the markets, as well as an active tape reader and trader. He observed the market activities and campaigns of the legendary stock operators of his time, including JP Morgan and Jesse Livermore. From his observations and interviews with those big-time traders, Wyckoff codified the best practices of Livermore and others into laws, principles and techniques of trading methodology, money management and mental discipline. Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. Wyckoff also has techniques he believed offered advantages when markets were rising or falling (bullish and bearish). Wyckoff offered a detailed analysis of the "trading range", a posited ideal price bracket for buying or selling a stock. One tool that Wyckoff provides is the concept of the Composite Operator , another is Volume based analysis . Who is the Composite Operator / The Composite Man?: ----------------------------------------------------------- “…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2) Based on his years of observations of the market activities of large operators, Wyckoff taught that: The Composite Man carefully plans, executes and concludes his campaigns. -The Composite Man attracts the public to buy a stock (financial asset) in which he has already accumulated a sizable line of shares by making many transactions involving a large number of shares, in effect advertising his stock by creating the appearance of a “broad market.” -One must study individual stock charts with the purpose of judging the behaviour of the stock and the motives of those large operators who dominate it. -With study and practice, one can acquire the ability to interpret the motives behind the action that a chart portrays. Wyckoff and his associates believed that if one could understand the market behaviour of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them. Above excerpt from: school.stockcharts.com Many traders and investors who follow the Wyckoff Method treat the Composite man as a real entity, for Cryptocurrency holders this might be seen as a whale who controls the price. Wyckoff himself did not find it necessary to define a importance between the Composite man being an imaginary being, a creation of one's own mind or a real entity, but defined an importance towards “Thinking” like the Composite Man, by thinking like a “Large Operator” we change our Psychology. But what does this mean? In the book titled, “The Compound Effect” by Darren Hardy (Founder of Success Magazine) there is a section titled “Find Your Fight” in Chapter 3, in this section Darren describes how hate is often as strong as a motivating force as love, but why is this relevant? A person who is in love may do crazy things, but so will a person who is consumed by hate, as both are powerfully motivating forces. By creating a “Enemy” (Someone to hate) our mindset changes to a defensive manner, we are now in “Battle” with our Enemy. Here is a quote from the book, which is one of my favourites: “Contrary to social correctness, it can be good to hate. Hate disease, hate injustice, hate ignorance, hate complacency, and so on. Sometimes identifying an enemy lights your fire.Some of my greatest motivation, determination, and dogged persistence came when I had an enemy to fight. In history, the most transformation stories and political revolutions came about as a result of fighting an enemy. David had Goliath, America had the British. Luke had Darth Vader…” And as traders; we have The Composite Man… A great article on the Composite Man can be located here for further education: www.wyckoffanalytics.com Wyckoff's "Five Step Approach": ----------------------------------------------------------- The Wyckoff Method involves a five-step approach to stock selection and trade entry, which can be summarized as follows: 1. Determine the present position and probable future trend of the market. Determine what the current characteristics of the price structure and Supply & Demand are, (are we in a Uptrend, Downtrend or Sideways) by getting a general idea of the Price Structure, Sentiment & Supply and Demand we can determine if we want to be in a long or short trade, or no trade at all, and what the probable future direction of the market may be. Refer to Section “Market Phases & Cycles” below to understand this further. 2. Select stocks in harmony with the trend. In an uptrend, select stocks that are stronger than the market. By selecting assets moving with the Primary Trend, we are increasing chances of success. (For example, if the dominant asset in Crypto, Bitcoin is on a strong uptrend is it fair to assume that you are going to have more success trying to long other Cryptocurrencies which are highly “correlated” and likely to follow in that direction. Financial Assets that “decorrelate” and show stronger increases during uptrends and smaller decreases on pull backs may be showing signs of being stronger then the market as a whole (long position), for shorts we are looking for Assets that are showing weakness and stronger decreases then the market as a whole. 3. Select stocks with a “cause” that equals or exceeds your minimum objective. Every action, has a reaction, every cause, has an effect, this statement basically means that if you are going to enter the market and take a position, look for assets that have a rational and reasonable cause for you to reach your target objective. A great example is using Price Target Measurements when trading Chart Patterns, each Chart Pattern is the cause, and the Price Target is the effect. If there is a Cause, but no Effect, then it is a potential sign of weakness. Please see “Wyckoff Laws” below for more information. 4. Determine the stocks' readiness to move. Use a pre determined system to determine how close assets are to entering the Mark Up or Mark Down Phases. Find the right system to see when a asset is about to Uptrend or Downtrend. Use the 9 Buying & Selling tests, aswell as the Wyckoff Schematics explained below to understand this concept further. 5. Time your commitment with a turn in the stock market index. Financial Markets are highly correlated, this means that we want to be timing our investments and trades with the Leading Market Assets or Index’s (A Index is basically a grouping of the Top Stocks or Companies in that Industry, for example, SP500, AU200). Why do we want to time? Lets use Bitcoin as a example. Sometimes Bitcoin is almost correlated to 80-90% of the Stock Market, that means the price moves almost in sync, so by watching the price movements and analyzing the Stock Market we can also get clues on the direction of the asset we are trading. If Bitcoin is moving up, but the Stock Market is heading down, and the correlation is HIGH, we can assume that the upside move may not be likely to continue. Market Phases & Cycles: ----------------------------------------------------------- According to Wyckoff, the market can be understood and anticipated through detailed analysis of supply and demand, An idealized schematic of how he conceptualized the large interests' preparation for and execution of bull and bear markets is depicted in the figure above. The time to enter long orders is towards the end of the preparation for a price markup or bull market (accumulation of large lines of stock), while the time to initiate short positions is at the end of the preparation for price markdown. Also note the different Phases of the Market. Before we continue below, please click on the image below for my basic introduction to Market Phases & Cycles, which is an important topic to have an understanding of before continuing onto Wyckoff Schematics. This is also relevant to understand Cause & Effect mentioned below. Notice how each Cause has an Effect! To simplify the concept - Markets move in cyclical patterns, with a full cycle usually having Accumulation > Reaccumulation > Distribution >Redistribution, there can also be Micro trends within the cycle. Uptrends (HH, HL), Downtrends (LL, LH) and Sideways movements form the price structures which make up the Phases of the market, which in turn create the Cycles. Three Laws of Wyckoff ----------------------------------------------------------- Wyckoff Analysis is fundamentally based off the Three Laws of Wyckoff, which can be found and recognized across many different types of Analysis, the Laws help give insight to our analysis and choice of buying/selling. 1. Supply vs. Demand --------------------------------- Wyckoff states when demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. When sellers outweigh the buyers, the market is dominated by Supply, a large supply of an asset to sell, means greater selling pressure and a higher probability of a decrease in price. A sign of Demand (Buying Pressure) is a shortage of Supply, in a Cryptocurrencies case it would mean that the demand of buyers on exchanges outweighs the supply available for purchase on exchanges. As the amount up for purchase quickly falls to a low number the greed of participants drives them to want to pay higher prices for an asset. When buyers outweigh sellers, the latter occurs with a higher probability of increase in prices. A sign of Supply (Selling Pressure) is a shortage of Demand, in a Cryptocurrencies case it would mean that the demand of buyers on exchanges under weighs the supply available, institutional investors and funds hold majority share of the SUPPLY and with no interest in buying from the retail participants we see investors (sometimes impatient or fearful) become sellers in anticipation of there being no increase in price in the short term (relative to their perspective). Using this secondary chart below, we can clearly see the "Demand (Green)" and "Supply (Red)" areas of Siacoin SC. We can see that both the Demand & Supply areas are respected and have strong reactions, and with patience we will see if the dominating factor on Siacoin right now is Supply or Demand, but considering some of the points I will go into below so far its looking like it is shifting into the favour of demand currently with a visit to the 0.5 (50%) of the Trading Range. Take note of the small abbreviations at the start of the TR (Trading Range) for now - see Wyckoff Schematics section later. Other ways to analyze Supply & Demand in Cryptocurrencies are more literal - for example you can literally go onto the Blockchain and see the wallets of coins, how many each holds, what % of the Supply is owned by Siacoin itself, the amount of wallet holders, I will not go into this type of analysis in a detailed manner as it is not my expertise. 2. Effort vs. Result --------------------------------- Wyckoff states that every effort should lead to a result in the financial markets. Here is a example of a “Effort Vs Result” in a Trading Range (Parallel Channel) using Volume & Price Analysis (Please Click the Image, for Further Educational Idea) This statement is applied to our charts by using data on Trading Volume. When we see abnormally large trading volume at key areas on the chart, we can usually expect a continued move in that direction, if the Effort produces no result though, that abnormally large trading volume can give us a sign that the participants betting on the market to move in that direction have not gathered enough momentum to do so (Marked in Light Blue), which leads to them being trapped (Marked in Dark Blue) and then a reverse in the opposite direction in price (Marked in Purple). Effort Vs Result can also be interpreted in a number of ways, lets analyse the above Siacoin SC chart using this concept: In the first image, the Trading Range is created, once at the lower range, volume decreased (this was not just a singular occurrence, with the whole Crypto market having similar low volume and "choppiness" but within this low volume area we can see there was two larger red volume bars, these two bars showed us a increase in sellers in this area, (An effort) but no Result (further Decrease on the next candles) this gives us a sign that the sellers may not be the dominant force now (A “Divergence) leading us to test the previous dominant force area above as supply. This then led us to test the upper Trading Range, where the exactly same thing happened in the opposite. In the 3rd image, we can finally see that the effort of the buyers is now leading to zero result, the trading range is starting to drag out and the volume of sellers is dropping off, in a REAL breakout the volume should continue to increase with the prices. We can see below that never happens here. As the images progress the Supply is obviously Dominant. This leads us to the current chart, where we can see that now the sellers are losing momentum and the buyers have just stepped in. (See the volume?) In the current trading range on SC (Siacoin) we can see quite a lot of abnormally large green bars at the upper range, this shows us that even though a large amount of buyers did in fact come into play here, the upper ranges dominant force was the Supply, and prices then headed towards the lower range.We are now in the process of “Testing” that lower range for Demand. So far the circled Red Bars (in the First chart, the original chart of this post) show us the sellers may be trapped locally. 3. Cause vs. Effect --------------------------------- Wyckoff states that every cause in the market leads to a proportional effect. The market has phases, such as Accumulation, Reaccumulation, Distribution and Redistribution. Each phase should have a "Effect" to match the cause, Accumulation has a Markup, aswell as Reaccumulation, And Distribution and Redistribution are followed by a Mark Down. The phase is the cause, the mark up is the effect. Click on this link for a quick infographic on the Market Phases (Consider each phase as a Cause) which then should have an Effect (Mark Up or Mark Down Phase), this creates the “Market Cycle” and all markets move in cycles: ibb.co This is similar to how a Bull Flag has a target measurement (Mark Up) and a Bear Flag has a target measurement for the downside (Mark Down). For more information on Flag Patterns click the below image, notice on the bottom right picture how the Flag has a measurement which is represented by a extended line, the previous line and the Flag is the Cause, the extended line pointing upwards is the Effect in this case: In this case, if we see a breakout to the upside of this current trading range on SC Siacoin (the Cause) we can assume the Effect will be a strong breakout above the range leading to Mark Up Phase, otherwise the Cause has no Effect, in this situation meaning the range might fail and break downwards. This is similar in a way to Effort vs Result explained earlier, For every Effort, there should be a Result, for every Cause, there should be an effect. Wyckoff Schematics ----------------------------------------------------------- A trading range (Sideways Movement, Zig Zag) shows us an equilibrium between buyers and sellers, and the Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure. Each Trading Range can be an important Phase in the larger Market Cycle, giving us potential clues and hints within the overall trend. The Wyckoff Schematics help us identify the different between Accumulation and Distribution Trading Ranges (Or Reaccumulation or Redistribution) - In a Trading Range the price Zig Zags up and down until eventually a breakout occurs, using the Wyckoff Accumulation Schematic we can see there are some clues in the similarities of the chart and the schematic that tell us Siacoin may be ready to at least test of the upper bounds of the Trading Range. It is important to note that most Trading Ranges start with obvious characteristics, which we will delve into further below, the first characteristics of the Trading Range (TR) help us identify that we are now moving in a sideways trend: When paired with the Wyckoff 9 Buying and Selling Tests - the Wyckoff Schematics are a great tool to help measure potential entries, exits, risk and to read the price movement in general. There are four types: Accumulation , Reaccumulation , Distribution & Redistribution. And each Trading Range is Analysed in 5 key phases: By splitting our Schematics into 5 key phases, the characteristics become easier to recognize and identify.Remember this when moving forward in this section. Phase A: The trading range (TR) is created (example above) Phase B: The Supply & Demand of the TR is tested Phase C: Deviation outside TR or Final point before reversal Phase D: The new trend begins Phase E: The trend continues In phase D & E, the obvious “Change of Trend” is evident, refer to this infographic below and you can see how a trend contains Higher Highs, Higher Lows (HH, HL) or Lower Lows, Lower Highs (LL, LH); we will come back to this soon: 1. Accumulation : --------------------------------- In accumulation, the shares purchased outnumber those sold. There are roughly 9 characteristics of an Accumulation Range: 1. PS (Preliminary Support) the first Support area that was lost, creating the upper bound of the TR. 2. SC (Selling Climax) the climactic action that is bought up quickly creating the lower bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large selling volume, but no further downside. 3. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 4. ST (Secondary Test) a secondary test of the initial Demand Area created by the SC. 5. Spring (Fake Out) & Test or LPS (Last point of Support). Spring is usually a great example of Effort vs Result. Spring is then confirmed by a test of Support. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 6. JAC (Jump Across the Creek) the Creek is an imaginary line created by the previous downtrend (similar to a Moving Average), we want to see the price “Jump” across the creek. 7. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. BU/LPS (Back Up / Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner.The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend.The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Remember; Accumulation is the Cause, Markup is the Effect. Examples & Links : Accumulation Schematic #1: school.stockcharts.com In this schematic, the Spring is located in the end of the TR, showing trapped sellers. Accumulation Schematic #2: school.stockcharts.com In this schematic, there is no Spring action, instead the price starts moving upwards from the LPS Area (Last Point of Support), the Spring (in this case, ST) is located at the middle of the TR, showing trapped buyers. Example of Accumulation #1 Analysis (Click image, press play to see the result!): Example of Accumulation #2 Analysis: 2. Reaccumulation : --------------------------------- After Accumulation, comes Reaccumulation. Where after a extended upside move, a repeated sideways movement occurs which leads to another extended upside move. ReAccumulation is known also as a Trend Continuation. The characteristics are almost identical to Accumulation, except the previous price movement leading up to the trading range is upwards : Here are the characteristics explained : 1. PS (Preliminary Supply) the first selling area creating the Trading Range. 2. BC (Buying Climax) the climactic action that is sold up quickly creating the upper bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large buying volume, but no further upside. 3. Shakeout (Fake Out to the downside trapping sellers) (I have marked this as SC, to simplify the process as a Shakeout is quite similar in its characteristic. 4. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 5. ST Area (Secondary Test Area) a secondary test of the initial Demand Area created by the Shakeout. 6. Spring (Fake Out) or LPS (Last point of Support) A Spring occurs when price falls underneath the Trading Range, triggering stop losses and usually inducing investors to Panic Sell, (this is the most profitable area to buy). Spring is then confirmed by a test of Support. Spring is usually a great example of Effort vs Result. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 7. JAC (Jump Across the Creek) is when the price “Jumps” across the Trading Range, giving us a final clue before the breakout occurs. The “Creek” is an imaginary line formed from the projected path of the previous price swing highs, this can be used similar to a Moving Average. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner.The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend.The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Reaccumulation = Cause, Mark Up = Effect Examples & Links : It is important to note that Reaccumulation can appear as Accumulation, in the image below we can see that MANAUSDT looked like Accumulation Schematic #2, yet was actually Reaccumulation due to the previous uptrend. And in this example Reaccumulation looked exactly like Schematic #1 of Accumulation! Reaccumulation Schematic #1: ibb.co In this schematic, the Spring is located at the end of the TR, showing trapped sellers. Reaccumulation Schematic #2: ibb.co In this schematic, the ST (or Spring) is located at the middle of the TR, showing trapped buyers. Traditional Reaccumulation Schematics: ibb.co (Credit: Roman Bogomazov / www.wyckoffanalytics.com) Example of Traditional Reaccumulation #2 Analysis: (Press Play!): 3. Distribution : --------------------------------- Above we learnt that in accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The shares sold outnumber those purchased. In a Distribution Trading Range two of the key characteristics are the UTAD/UT (Upwards Thrust / Upwards Thrust & Distribution) above the Trading Range, and the SoW's Signs Of Weaknesses with strong volume at the bottom end of the range. The start of the trading range should be easily identified by a BC (Buying Climax). The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR . There are roughly 9 characteristics of an Distribution Range: 1. PS (Preliminary Supply) is the first selling area creating the Trading Range. 2. BC (Buying Climax) is the climactic action that is sold up quickly creating the upper bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large buying volume, but no further upside. 3. AR (Automatic Rally) is a low volume, quick reaction visiting the other side of the TR, usually indicating long covering. 4. ST (Secondary Test) a secondary test of the initial Supply Area created by the BC. 5. SOW (Sign of Weakness) are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 6. UT or UTAD (Upwards Thrust) in a UT (Upwards Thrust) a significant amount of buyers enter the market, “Buying the Breakout”, but their Effort, leads to no Result and this variation of a “Bull Trap” is the most significant characteristic of the Distribution TR. A UTAD (Upwards Thrust and Distribution) forms within the middle or end of the Trading Range; there is an obvious lack of Result vs Effort, with abnormally large buying volume signature, yet price fails to get back above this area again. It can look similar to a miniature Trading Range (Distribution). 7. UTAD or LPSY (Last Point of Supply) In Schematic #1 we have the UTAD at the end, in Schematic #2 we have it in the middle (simplified). If the /UT is found in the middle then we are looking for the LPSY to confirm the Resistance, when price revisits the initial Supply area created at the start of the Trading Range, and then successfully decreases from that area. 8. SOW (Sign of Weakness, Fall under the Ice) just like how in Accumulation we Jump Across the creek, in Distribution we do the latter and Fall Under the Ice. SOW (Sign of Weakness) are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 9. LPSY (Last Point of Supply) instead of revisiting the initial Supply area created at the start of the Trading Range, in LPSY (Last Point of Supply) revisits the recent Supply (Resistance) area, usually a former Support. The term may be used in a plural manner, with multiple LPSY forming the Lower Highs (LH’s) that make up the basis of a market trend. We should then enter the Mark Down phase as described at the start of this article. Distribution is the Cause, and Mark Down is the Effect. Examples & Links : Distribution Schematic #1: school.stockcharts.com In this schematic, the UTAD is located at the end of the TR, showing trapped buyers. Distribution Schematic #2: school.stockcharts.com In this schematic, the UTAD is located in the middle of the TR, showing trapped buyers. Example of Distribution #1 Analysis (Press Play!): Example of Distribution # 2 Analysis (Press Play!): 4. Redistribution : --------------------------------- After Distribution, Comes Redistribution. Where after a extended down move, a repeated sideways movement occurs which leads to another extended downwards move. Redistribution is also known as a Downtrend Continuation. Redistribution is said to be difficult to analyse, so my general advice is to treat Redistribution as a method to spot an additional Distribution Schematic after a Distribution Schematic and a Mark Down has already occurred previously recently on the chart (Similar to a Bear Flag Pattern after a Distribution). The characteristics are almost identical to Distribution sometimes, except the previous price movement leading up to the trading range is upwards : Here are the characteristics explained : 1. PS (Preliminary Support) the first Support area that was lost, creating the upper bound of the TR. 2. SC (Selling Climax) the climactic action that is bought up quickly creating the lower bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large selling volume, but no further downside. 3. AR (Automatic Rally) is a low volume, quick reaction visiting the other side of the TR, usually indicating long covering + (UT/UA Upwards Thrust / Action) The Upwards Action or Upwards Thrust takes out the Supply above the AR area, before heading back down. 4. ST (Secondary Test) a secondary test of the initial Demand Area created by the SC. 5. UT or UTAD (Upwards Thrust, or Upwards Thrust And Distribution), in a UT (Upwards Thrust) a significant amount of buyers enter the market, “Buying the Breakout”, but their Effort, leads to no Result and this variation of a “Bull Trap” is the most significant characteristic of the Distribution TR. A UTAD is basically a UT (Upwards Thrust) with a Distribution also (miniature Bearish Trading Range) that usually forms within the middle or end of the TR. 6. LPSY + Test (Last Point of Supply) is when price revisits the initial Supply area created at the start of the Trading Range, and then successfully decreases from that area, the test confirmed by tapping the upper Supply Area before heading into the TR again. 7. SOW (Sign of Weakness) *sometimes* with a potential UTAD (Upwards Thrust and Distribution): Signs of Weakness are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 8. SOW (Sign of Weakness, Fall under the Ice) just like how in Accumulation we Jump Across the creek, in Distribution we do the latter and Fall Under the Ice. 9. LPSY (Last Point of Supply) instead of revisiting the initial Supply area created at the start of the Trading Range, in this LPSY we are visiting the Supply area created near the bottom of the Trading Range. We should then enter the Mark Down phase as described at the start of this article. Redistribution is the Cause, Mark Down is the Effect. Examples & Links : It is important to note that Redistribution can appear as Distribution just like Accumulation as Reaccumulation as mentioned earlier, here is a example on ETHUSDT: Redistribution Schematic #1: ibb.co In this schematic, the UTAD is located at the end of the TR, showing trapped buyers. Redistribution Schematic #2: ibb.co In this schematic, the UTAD is located in the middle of the TR, showing trapped buyers. Example of Redistribution #1 Analysis (Press Play!): Example of Redistribution #2 Analysis (Press Play!): 5. Failure of Schematic : --------------------------------- Wyckoff based trades can also fail. It is also important to note that Wyckoff Schematics are not a guarantee, more so a system for you to analyse the market and know potential lower risk areas to position your trades. In this example below (Click+Press Play!) we can see that the Accumulation on BATUSDT did have a strong breakout, but never entered into a correct markup phase and then "failed" when the price came back inside of the TR (Trading Range): Nine Buying/Selling Tests: ----------------------------------------------------------- Whereas the three Wyckoff laws provide a big-picture foundation for the Wyckoff method, the nine buying and selling tests are a set of narrower, specific principles to help guide trade entry. These tests help delineate when a trading range is drawing to a close and a new uptrend (markup) or downtrend (markdown) is about to begin. In the book, by Hank Pruden, named "The Three Skills of Top Trading" , as well as the following article by Jack K Hutson the Nine Buying and Selling Tests of Wyckoff are discussed and outlayed similar to the above image: These nine tests can be difficult to understand, or even apply to your charts, so I have summarised them and modernised these tests for a purely candlestick chart and simplified point of view. Alot of analysts beforehand made use of P&F (Point & Figure Charts). At the top of your Tradingview chart, you can see a small icon, if you click it you can see the different types of charts available, we are currently on Candlesticks, Point & Figure is another option that was used for some Wyckoff Analysis, but in my simplified version we are just using Candlesticks: ibb.co Here are my simplified Buying & Selling Tests explained with images 1. Buying Tests : --------------------------------- I am using the chart of ZILUSDT as a example. Wyckoff Buying Tests for Accumulation (Simplified Version) 1. Downside price target complete or close to complete of any previous Bearish Patterns (Bear Flag Pattern used for Target Measurement: www.thepatternsite.com ) 2. PS, SC, and AR/ST on chart (Remember our first chart above, with Supply & Demand? ON the left we can see creation of the trading range with the Selling Climax (SC), Automatic Rally (AR), and Support Test (ST) we also covered this in the chart below (The 2nd below is showing that on ZILUSDT): 3. Bullish Signs (volume or price increases on rallies and diminishes during reactions) 4. Diagonal Resistance Broken 5. Higher lows & 6. Higher highs 7. Asset stronger than the market (more responsive on rallies and more resistant to reactions than the market index or other dominant assets) 8. Base forming (horizontal price line) (It can resemble a Flat Base Pattern: www.thepatternsite.com) 9. Estimated upside profit potential is at least three times the loss if the initial stop-loss were hit (Risk to Reward; 3:1) We can now see we have completed all 9 Buying Tests: And for the final images, we can see that ZIL has a massive upside move, moving to the Mark Up phase from our Buying Tests Analysis: Aswell as starting to complete a larger Accumulation #1 Structure as desribed above. 2. Selling Tests : --------------------------------- I am using the chart of XTZBTC as a example. If you missed it above, dont forget to see the original 9 Selling Tests: ibb.co Wyckoff Buying Tests for Distribution (Simplified Version) 1. Upside price objective complete of any previous Bullish Patterns on higher timeframes, or close to complete (Bull Flag Pattern used for Target Measurement: www.thepatternsite.com ) 2. Bearish Signs (volume decreases on rallies and increases on reactions) 3. Preliminary supply, buying climax (PSY, BC) We also covered this in the chart below (The 2nd below is showing that on XTZBTC): 4. Asset weaker than the market (more responsive than the market on reactions and sluggish on rallies) XTZ was a perfect example of Selling Test #4, as you can see it was much weaker than Bitcoin at the time, which was leading the market. 5. Diagonal Support Broken 6. Lower Highs & 7. Lower Lows 8. Crown forming (It can resemble a ugly Double Top Pattern: www.thepatternsite.com) 9. Estimated downside profit potential is at least three times the loss if the initial stop-loss were hit (Risk to Reward; 3:1), we have now completed all 9 Selling Tests! And for the final images, we can see that XTZBTC has a massive downside move, moving to the Mark Down phase from our Selling Tests Analysis: As well as starting to complete a larger Distribution #2 Structure as described above. Refer to your schematics above if your confused. Conclusion: ----------------------------------------------------------- Not only does the Wyckoff Method teach the novice Investor/Trader the techniques, foundations and methods needed to analyse the market, it also helps create a system and mindframe towards observing and timing the market, which allows the trader to be much more rationalised and organised in their train of thought as well as much more risk averse. By using the Wyckoff based analysis on Siacoin we can clearly see this token has potential for more upside, although we do need to be cautious as a significant pullback on Bitcoin could easily “Fail” the “Spring” action of the TR (Trading Range) in the original analysis image above. What would a successful accumulation breakout look like on Siacoin? Refer to the original chart at the start of the post. I have made a small drawing, describing the characteristics we need to see for this to progress further. You can use that drawing along with the next below to get a rough idea of what a successful breakout will look like, compare with the Accumulation Schematics you studied above. What would a failure of accumulation look like on Siacoin? I will give two examples: 1. Failure of Spring 2. Failure of Phase E (Uptrend) I hope you enjoyed my explanation of the Wyckoff Method - Thank you and if you found this writeup insightful, educational and informative don't forget to hit Subscribe, Like & Comment so others can also potentially see and benefit from this post, if you wish to see these concepts in action, I recommend visiting my signature as well. Other Resources & References: ----------------------------------------------------------- Websites: Wyckoff Analytics: wyckoffanalytics.com Wyckoff SMI: wyckoffsmi.com Videos: Wyckoff Youtube: www.youtube.com Wyckoff SMI Youtube: www.youtube.com Stockcharts.com Youtube: www.youtube.com (I didnt cover volume much in this article, check out the above video for a Volume Tutorial) Articles: school.stockcharts.com school.stockcharts.com school.stockcharts.com www.wyckoffanalytics.com www.wyckoffanalytics.com Magazine of Wall Street Database: (Founded by Wyckoff) shorturl.at Books: www.amazon.com www.amazon.com References: en.wikipedia.org school.stockcharts.com
SEducation
by Worth_The_Ri5k
22
What are Supply and Demand Zones and How to Trade with Them?What are Supply and Demand Zones? ▷ Demand Zone (Accumulation Area): Accumulation comes from a Latin word meaning to increase something over time. A strong uptrend can only exist if buyers outnumber sellers. During a trend, price moves up until enough sellers enter the market to absorb the buy orders. The origin of strong bullish trends is called an accumulation or a demand zone. Demand Zone is where traders are willing to buy aggressively because the balance has shifted to the demand side. Here, buyers are dominant and sellers weak. The demand zone represents a period of implicit buying, typically by institutional buyers, while the price remains fairly stable. This area is characterized by mostly sideways price movement. Before a trend starts, price stays in an demand zone until the “big players” have accumulated their positions and then drive price higher. This can be contrasted with the Supply Zone, where institutional investors start to sell. ▷ Supply Zone (Distribution Area): Bearish trends are created when sellers outnumber buy orders. Then, price falls until a new balance is created and buyers become interested again. The origin of a bearish trend wave is called a distribution or a supply zone. At Supply Zone traders are willing to sell aggressively because the balance has shifted to the distribution side. Here, sellers are dominant and buyers are weak. Support and Resistance Levels vs. Zones If you have an idea of how to trade with support and resistance zones, you might find supply and demand zones very similar. You won’t be mistaken; Supply and demand zones are natural support and resistance levels. You’ll often find supply and demand zones just below/above support and resistance levels. Types of Supply And Demand Patterns There are two types of patterns: “Reversal” and “Continuation” patterns. While a pattern is forming, there is no way to tell whether the trend will continue or reverse. As such, careful attention should be paid to whether the price breaks above or below the zone. ▷ Continuation Patterns If price continues on its trend, the pattern is known as a continuation pattern. We have two continuation patterns: “Rally-Base_Rally” and “Drop-Base-Drop” ▷ Reversal Patterns When price reverses after a pause, the pattern is known as a reversal pattern. The established trend will pause and then head in a new direction as new energy emerges from the other side (bull or bear). Reversals that occur at market tops are known as distribution patterns. Conversely, reversals that occur at market bottoms are known as accumulation patterns. We have two reversal patterns: “Rally-Base_Drop” and “Drop-Base-Rally” How to Find Supply and Demand Zones? On a price chart, the demand zone is characterized by sideways price movement on above-average volume. When a stock price doesn't fall below a certain price level, and moves in a sideways range for an extended period, this can be an indication to investors that the stock is being accumulated by investors and as a result, will be moving up soon. The demand and supply zones are encompassing the base on the beginning of the move. The most important thing is to first finding a sharp move in either direction, after which you can identify its starting point and roughly define the supply or demand zone: • Look at the chart and try to spot successive large candles. • Find the base from which price started the quick move. Usually, before that you have a small sideways move, that is where your supply / demand zone is. • Draw the zone It is very hard to be precise with those levels and here it is more of an art than science. To make it easier to identify these levels, you can use another tool for confirmation. How to Trade with Them? One way to trade with supply and demand areas is reversal trading. After identifying a previous strong market reversal, wait for the price to return to that area. If a false breakout occurs, the chance of seeing a successful reversal is extremely high. Some candlestick patterns such as "Engulfing", "Pin Bar" and "Tweezer Blades" can help you identify trend reversals. Be careful, trading in the opposite direction of the trend is very risky. Technical analysts typically recommend assuming a trend will continue until it is confirmed that it has reversed. Trend reversal trading can be a profitable way to trade the markets. However, like any other trading strategy, there is a correct and a wrong way to do it. Pros and Cons Being able to recognize whether an asset is in the demand zone or the supply zone is helpful to investing success. Demand Zone is the origin of a big rally in price. Identifying this area could help investors spot good entry points into an investment before its price begins to rise. Once the price leaves an demand zone, not all buyers got a fill and open interest still exists at that level. Supply and demand traders can use this knowledge to identify high probability price reaction zones. As with anything else, supply and demand zones have their cons, as well. Understanding chart movements such as those seen in the accumulation area can work well during times of relative stability. Still, prudent investors know to pay attention to larger economic events that can quickly reconfigure charts (like the covid-19 epidemic) Key Points • Accumulation / Re-accumulation zones can becomes distribution/Re-distribution zones over a period in the Stock Market • The narrower a supply/demand zone before a strong breakout is, the better the chances for a good reaction the next time typically. • Good supply and demand zones are quite narrow and do not hold too long, which shows strong imbalance between buyers and sellers. • The stronger the breakout, the better the demand zone and the more open interest will usually still exist. • Always look for extremely strong turning points. They are often high probability price levels. • Each time the price re-tests a supply/demand zone, more and more previously unfilled orders are filled and the level is continually weakened. Conclusions Supply and Demand Zones are a great way to identify areas of buying and selling as well as support and resistance, but they work best when combined with other kinds of technical analysis.
BITSTAMP:BTCUSDEducation
by BobRivera990
8
Correlation of price movementTHESE ARE TWO THEORIES. THE FIRST IS ACCORIDNG TO WYCKOFF, THE SECONS IS THE DOW THEORY 1) Accumulation begins with the price stopping and the formation of support, followed by the end of sales, the opposite level is gradually formed - resistance and the price goes into a sideways movement. It has a name - Accumulative flat or consolidation. Dow says that it is impossible to trade in flat, this is not a place to trade 2) Consolidation ends when there is an update of the tops and someone from the sides - buyers or sellers, starts winning in the market, but it is quite difficult to break through from the first time and often a large player deceives the players in this way by making a false breakout. 3) Wyckoff's theory mentions retests of the support level, a sequential movement that follows a stop. Assessment of the state of the lower limit of accumulation, after which the market reverses and moves in the opposite direction to the previous movement. The accumulation is exited and the trend is reversed. TREND In essence, a trend is the direction of the predominant movement of indicators. Usually considered in the framework of technical analysis, where the direction of price movement is implied. Charles Dow noted that in an uptrend, the subsequent peak on the chart should be higher than the previous ones, in a downtrend, subsequent downturns on the chart should be lower than the previous ones. There are upward, downward and sideways trends. A trend line is often drawn on the chart, which connects two or more price troughs in an uptrend, and connects two or more price peaks in a downtrend.
Education
by Lingrid
8
1 year: Impact of Institutional accumulations on Bitcoin pricesAny feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :) In this post, we have attempted to cover some of the major institutional accumulations that has happened in Bitcoin since June 2020. Bitcoin's rise over the past 1 year has been phenomenal. The rise does not only mean in terms of prices, but also as an attractive asset class that provides a much-needed diversification. During the pandemic, the response towards Bitcoin has been nothing short of extraordinary. Both institutional investors and retail traders understood the importance of Bitcoin in building long term wealth. The data presented in this analysis has been researched and curated from different portals such as Tradingview, Coindesk, Forbes and Twitter. We have reviewed five different dates where the volumes have spiked up massively owing to news surrounding accumulation of institutional investors. It should be noted that the dates mentioned here reflect the news coming to limelight regarding the accumulation. It does not necessarily imply that all the accumulation happened on that exact day. 02nd June 2020: BTC closed at $9525.73 Fidelity Investments stated in their report that the number of institutions buying Crypto derivatives products has more than doubled. 27th July 2020: BTC closed at $11,046.19 Report shows Bitcoin futures surging past 186% as institutional accumulation of the underlying continues at a massive pace. BTC jumps up above $11k. 20th October 2020: BTC closed at $12,802.67 Paypal announces its acceptance of Bitcoin for payments. This time the accumulation is fuelled from both institutional and retail end. 17th December 2020: BTC closed at $22,814.24 Grayscale investments increased their Bitcoin holdings by double digit figures over the past few months. Bitcoin shot up by approximately 7% following the report. 29th January 2021: BTC closed at $34,249.64 Carthie Wood's ARK publish that Bitcoin climb unto $400K as hedge funds and several other institutions are steadily increasing their Bitcoin and crypto holdings. Another interesting piece that has come up very recently is MicroStrategy NASDAQ:MSTR , a business analytics firm has purchased around 13,005 Bitcoins, amounting to approximately $489 million, on Monday, 21st June 2021. ---------------------------------------------------------------------------------------- Any feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :)
BITSTAMP:BTCUSDEducation
by Mudrex
BCD. Using volume to notice ideal market behavior.Volume is in the foreground once again. One predictor of if a trend will continue, versus if price movement is a momentary aberration, is to see what volume is doing during rises and pullbacks. For us to say that the up-trending market action will continue it is ideal to see above average buyer volume on the leg candles (the large green/white candles) followed by decreasing relative volume at the same time that price is pulling back. What is the thing we are trying to avoid? If price makes a big green leg out candle then is immediately followed by equal or larger red selling volume, we might not have as much confidence that the rise in price will continue. We might even think that any proceeding pullback may actually be the start of a more coordinated downward push. In the example I have charted here you can see large buyer volume on the legging out, then dwindling volume on the the pullback. That's pretty much the gist of it. For bonus: You may or may not have the idea to check OBV (on balance volume) to determine if accumulation is occurring. The OBV here clearly shows that it is steadily rising in tandem with price. This tells us, at the very least, that this cryptocurrency is no longer in a period of distribution. At least for the present moment. ---- The same thing just flipped upside down is true for selling. You want to see large red volume bars followed by diminishing volume bars during the relief rally period. The best part about this is you don't have to take my word for it. I have searched through my libraries investment section, and read a portion of it. In my opinion (now you might have to take my word), the most useful book is "a beginners guide to day trading" second edition. by Toni Turner. It's just so frickin' simple and good in all the right ways. I had a strong foundation before I started reading it, but it's packed full of timeless trading material, and it reinforced and added on non-destructively to everything I already had acquired. Toni Turner clearly knows how to trade, and also how to make information highly absorbable. I'm grateful the result is a book.
BEducation
by emehoke
2