REVERSE

A question arises when the price hits a handle (support/resistance) how to know if it will reverse or breakout further. The answer lies in the volume. Of course, you already have your own top-bottom or breakout system, even better than volume, but with the extra volume, your probability of success is higher anyway.

When the price is close to touching or touching resistance/support, but the volume trends to decrease, the price is likely to reverse because it was exhausted, the probability of breakout is very low.

By incorporating price movement analysis, you will be further confirmed as to which side is controlling the market and where to buy/sell.

See the example below:

With this case, clearly, the price is falling and has hit support, the volume below is trending to go down. There is another story behind, but to make it easy to understand that the sellers have weakened, the probability of further decline is very low.

Combined with candlestick analysis, the price moved sideways, creating a tail below, showing that the sellers were weak, now we expect a strong bullish candle to confirm the control of the buy. And the result was a point for a good entry.

BREAKOUT

Breakout is the opposite of a reversal, if the case on the volume decreases then the case with the possibility of Breakout, the volume will increase sharply. The simple reason is that the supply-demand force will be absorbed by that volume, if there is a subsequent force pushing the price forward, the price will surely breakout.

As shown in the image above, the price is trending up and is hitting resistance. At resistance, price stops to test supply. In the area where the price is testing the volume is higher than the previous candles. The supply force was completely absorbed by a large amount of volume. Therefore, only demand continued to push prices up. We still hesitate without BUY.

Remember the basic principle: a strong volume will help push prices forward.

So we have one more tool to distinguish fake breakouts, real breakouts. Of course, don't be too blind to trust a tool.

PULLBACK

When the price has broken out but returned to the pullback, whether it is a real pullback or a reversal. The answer is still in the volume.

In the picture above, the price has breakout and returned to the pullback, you notice, the volume pullback is not as high as when it breakout. That is that the pullback area, people are not very eager, the mind is BUY and BUY, maybe the trading in that place is due to people waiting to buy limit or some trader sell at the top and now. take profit in an uptrend ...

In this case, just a nice bullish candle with high volume, we have enough evidence to enter a BUY order.