When it comes to trading the financial markets, a lot of traders try to identify a change in trend in the markets, but they seem to get wrong more often than not. With The TradeGuider Volume Spread Analysis toolset, you can decipher when the markets are going to change, and I will show you exactly how in this article.
When I first open a chart, I look at what is happening in the background, and I search for areas of ultra-high volume. These areas tell that professional activity, Smart Money is starting to enter the market. Usually, you’ll see ultra-high volume around news announcements. A perfect opportunity for the Smart Money to manipulate the markets and change the polarity of the markets.
A Change In Trend, Is It Markets Manipulation?
Usually, the markets are manipulated because the Smart Money is taking profits. After an uptrend in price, the professional traders are making profits. It’s a game to them, they buy low and sell high. So after they buy, the market moves up, and at around a high impact news announcement, you will see ultra-high volume appear on an up bar. This tells us that the smart money is entering the market and if the following bar is a down bar this confirmed that there is selling.
The Smart Money does not sell all of their holdings right away as the market will collapse. What the Smart Money do is that they entice the retail trader to enter into a long position. The Smart Money will buy just enough to attract the retail trader to go long. The price is pushed up, and the retail trader enters fearing they may miss out on the move.
As price is moving up, you will usually see No Demand bars, upthrusts, and trap up moves. These are all signs of weakness. With these signals appearing, you will start to see price mushrooming over testing the highs as it moves along.
The reason why price continues the test the highs is to see if there are any buyers in the market. If there aren’t any buyers present, you will find that the volume will dry up as price retests the highs.
When there are no more buyers, then you’ll see prices being to fall and a change in trend has commenced. The video below shows this occurring on the 5 min chart of the AUDUSD.
If you would like to know more about the TradeGuider VSA Toolset, you may make contact with me by sending me an email to email@example.com
Have an excellent trading day
Professional Investor and VSA Expert
Author of Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis