Stage 1: Bottom creation

The first phase begins when the downtrend ends when an asset enters the background creation process. Formed bottoms can be simple or complex, but they all have one thing in common: New players entering replace old players, replacing fear with hope, which will eventually turn. sincere greed. The fact that we buy early during the price process is creating a background that is not working well because complex tests can form and create new lows before official support can form.


The accumulation tends to accelerate near the end of the pattern, with a spike in trading volume (above average), which shows that buying is starting to show signs of increase. The OBV and other distribution/accumulation indicators create a bottom with the price and begin to rise, showing a positive outlook. Watch them closely as these indicators are observed and when there are large bumps in the background it could be a sign of an imminent breakout and Phase 2 is about to begin.

Breakouts out of background areas are often triggered by large price gaps with large trading volumes. And this gap usually does not fill for a long time, forcing buyers to open positions on small accumulation patterns after a breakout rather than pullbacks that retest support.

-> WE SHOULD NOT BE INVOLVED IN THIS STAGE, AND IF WE SHOULD GO ONLY SHORT IN RANGE BECAUSE LOW PRICE ZONE CAN TAKE us OUT OF THE WORLD. MONITOR THE OBV, IF ANY GROWTH WILL BE A SIGNAL FOR PHASE 2 REPAIRING

Stage 2: Forming an uptrend

The uptrend signals the start of Phase 2, a period where market participants can buy heavily, especially in the early stages. New Trends Trends attract a small group of buyers who have followed an asset from the start and a large group of price chase and "underdog". The first phase of an Uptrend tends to produce "learned" price action with a series of higher highs and higher lows formed with medium volatility (you should watch the candles of equal length), while a late-stage uptrend tends to create all sorts of traps - this happens because so-called "big hands" use their special skills. to eliminate the weak and adapt late.


The middle part of Phase 2 often continues to appear gaps with large volume marking the halfway point of the uptrend. This sudden increase signaled the official participation of the "weak". Those who have entered earlier should tighten their stops as this uptrend typically carries intense emotional intensity, making the price action more erratic, despite the uptrend in the period. can also induce steep price action with rapid returns.

-> IF YOU CAN TAKE THIS STAGE, YOU SHOULD BUY STRONGER, Especially WHEN THE PRICE IS CREATING HIGH-EFFICIENCY GIVES, WITH THE PLANTS THAT ARE DIFFERENT LONG. YOU CAN USE THE GAP PLANTS TO ADD YOUR PURCHASING

Stage 3: Creating vertices

The transition from Stage 2 to Stage 3 does not happen in a single price bar because the first phase of a top phase will contain the last period of a bullish phase. The first high will mark the first resistance of the trading range (trading range) is forming. Note that there is often confusion during this period, that an accumulation in an uptrend can create momentum for the price to go higher but not necessarily a peak, so we cannot confirm a top. until the beginning of Stage 4. Even so, the vertices provide us with characteristic features that allow us to make judgments about the direction of the asset.


As well as the bottom-bottom process, OBV and other distribution/accumulation tools can measure this process with great accuracy, that's when the OBV breaks off its own support (as shown above).

In addition, there is another feature that you can evaluate that the peak is completed, that is the price at the top often loses its elasticity, the price bars touch support areas but there is no accompanying buying force. , therefore, the price cannot return to the top of the previously established range area. This price action shows that buying interest is decreasing. The moving averages started to move sideways forming major support levels, the price breaking out of these supports, creating a domino effect, causing the bulls to cut loss and surrender.

-> WE SHOULD NOT SELL DOWN THIS STAGE BUT WE SHOULD ONLY FLOW IN THE RANGE, WITH THE BEST ATTENTION OF OBV, WHEN A DIFFERENCE HAS HAPPENED WITH DISCUSSION WITHOUT SUPPORT, WE WILL BE PREPARED TO TRADE IN A TRENDING MARKET!

Stage 4: Forming a downtrend

The breakout out of the range is formed at the peak marking Phase 4 when sellers control price action, prices often drop to prices that even the most pessimists cannot imagine. . Frustration and distrust are characteristic of this stage. This phase usually begins with high volatility but ends with low volatility because indifference and indifference have consequences, reducing the trading volume to the lowest level among cycles period.


Short positions taken early in a downtrend will carry higher risks and higher rewards than at the end of a downtrend. The bullish sentiment persisted at the start of Phase 4, which encouraged those who had the mindset of “Buy on dips” while the big hands were still trying to get rid of amateurs carefully. weak short-selling. However, high volatility forces the asset's price to fall faster than it rises, allowing short positions to be executed at the right time with an opportunity to gain profits.

Short positions taken at the end of this period seem to be risky showing great reliability again as the market is no longer in the presence of amateurs, and it is time to sell strategy on rallies to uphold the absolute effect.

-> THIS IS WHERE WE SELL STRONG. IF YOU CAN FIND THIS STAGE EXACTLY, YOU CAN MAKE A LOT OF PROFIT BY SELLING. SELL-END DOWN THE TRENDS OF DEFENSE THAT IS LOST SAFE, BUT IN fact it is safest because the downward trend has a long trend in the sun during this period.