Open lips, cold teeth, that's true. Whether the trend is reinforced or not is due to volume. Think of it, a gloomy market, few people buy and sell, surely the price does not change much. The more exciting the market, the busier buyers and sellers, the more certain prices will fluctuate based on supply and demand, which is the core principle of technical analysis as well as a general rule for all types of markets. Yet for a long time, we forgot about an important tool called Volume.

So how does Volume strengthen Trends?

As in the picture above, you just imagine, the price is the engine, the liquidity (volume) is the fuel, the engine must be filled with fuel. The price starts to break out of the lower sideways when the liquidity is pumped in, and since then, the liquidity has been continuously higher than the sideways before. The steadily increasing liquidity strengthened the sustainability of the uptrend.

So when liquidity is the trend of the island afternoon trend?

If based on the above, when the fuel runs out, the engine will stop, the liquidity will decrease, the trend will weaken. But the weaker trend doesn't mean reversal. We will have to learn one more piece of knowledge to know when prices reverse. It is the concept of "Spike in liquidity" or in English called Volume Spike, and what Arabic calls to do not know. Volume Spike also has another name is Volume Climax.

Sudden liquidity means that the volume is steady, one tree suddenly jumped higher than all but another tree corresponding to a candlestick position was forming. The spike in liquidity carries a lot of information depending on the shape and position of the respective candle.

Sudden liquidity or Volume Climax usually occurs at the end of a trend, and when price hits a very strong resistance/support:

Behind Volume Climax is a love story between small and big money. Small cash flow usually likes to race, if you see an uptrend is bought, a downtrend is sold.

Therefore, the more they see it increases, the more they buy, when facing a stiff resistance, where a lot of taking profit orders (SELL orders) are concentrated from the large cash flow. They need a lot of BUY orders to execute their SELL orders. From there that formed the Volume Climax tree at resistance.

It can be said that Volume Climax is a mirror that reflects the action of taking profit or hunting for liquidity of large cash flows.

How can this information benefit us? First, do not get caught up in the trend so that you have to get entangled in the adversity "buy top - sell bottom" as bait for some sharks. Second, following a large cash flow, you can earn some rice and some porridge.

Here is a practical example: