Monday, June 7, 2010

Volume does matter

while I was looking at chart pattern today, it asked my self if volume does matter?

From my observation volume is of the important aspect to identify reversal pattern. It is best if we can identify reversal pattern as early as possible especially in two ways market like fcpo.

When volume has significant increase for couple of days. Be wary on the chart pattern. When volume is higher with BLACK candle it is a sign of bearish market. Wait for 2-3 days and short when a candle is below trend line.

During bearish market, if there is very high volume with WHITE candle please be wary and please enter long position once BULLISH candle is above trend line.

Please use other indicator as well before enter position just ensure we are not get trap or long/short at oversold/overbought points.

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