Basic Operator Analysis : How to Read Price & Volume

Many readers are curious on how we read big boys movement by looking into price and volume.

You will find our explanation is more reasonable and solid compare to traditional analysis on candlestick that always can’t explain why certain candlestick happen and not convincing. Some even said the traditional analysis is an art into the explanation. What does this suppose to mean?

In this post we will be sharing to you some of the basic understanding of candlestick and volume interpretation in our own analysis.

Many traders will know about shooting star candlestick but not many know exactly the reason why shooting star is an indication of reversal from the top.

Let us explain to you in the big boys approach in Shooting Star

Often traders only look at the daily chart and wait for the confirmation for price reverse. Probably after you have read this you will start to sell your shares once you see this.

Basically in daily chart it doesn’t show you much about why is there a long upper shadow. Now let’s look into the 5 mins chart.

The above 5 mins chart is price movement during the day of the long upper shadow.

You can see since morning until end of the day there are many price pressed down after each surge. So why this happen?

Basically the big boys are attracting the buyers in by creating price up with volume, so retail traders will think there are many buyers coming in which they starts to think is bullish and want to be part of it. In a way, we call it creating the greed in you so you don’t want to missed it.

If you understand well enough, you will notice most of the time when you buy shares, you will always want to queue at the buy side. Because you want to buy it cheaper, you are not alone, with our own experience and training many traders in the market, many investors and traders always adopt this thinking of :” I want to buy it at a lower price, if the price doesn’t hit the price i queue at I will not buy.”

So after the big boys push the price up with volume, sometimes they will leave 1 price with lower volume order and 1 big volume 1 price below to show that you can queue at above “support” (as shown in above image) and successfully attract many retail traders and investors in by queue at lower buy queue, then they starts to throw their shares down to the investors and traders.

Traders and investor who park there will happy because they think they are right about the price and they are able to buy it a “cheaper” price than just now without knowing they just fall into a distribution trap. On the other hand the big boys are happy also, because they get to distribute their shares.

This is the reason why you see a low upper shadow most of the time at the top, because the big boys are throwing their shares out to the investors and traders and also explain why there are many shadows at the top of the stock price before a sharp plunge, because they are distributing.

What does Doji mean?

Doji is a candlestick with no candlestick body (open and closed at the same price.).

The normal explanation is bull & bear are indecisive/ buyer & seller indecisive. So what does it mean by indecisive? If the market is indecisive what should you do? Indecisive also? Because the market not sure, I also not sure?

Let’s see will you still indecisive after you read the below explanation.

By right huge volume in represent bullish, BUT, price don’t push up so is not bullish. This is an indication of selling pressure in this stock.

Put it in our point of view, the big boys are creating huge buying volume at the same range to give you a false signal that there are many buyers/ high demand to attract you to buy!

When you start to park at lower price, they sell the shares down to you and continue with huge volume in but price don’t push up much, just 1 bid.

So when you see this don’t feel indecisive with it, EXIT! Because they are selling their shares!

This blog is for sharing our point of view about the market movement and stocks only. It is not and advice or recommendation to buy or sell financial instrument. Viewers and readers are responsible on your own trading decision. The author of this blog are not liable for any losses incur by any investment or trading.

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