· Volume increases slowly. This is steady, consistent buying
· Buying volume is larger than selling volume
· Price moves in a consolidation band and price rise is slow
· The new trend is defined with a trend line and there are many successful tests of the trend line
· Volume remains steady when the price falls. This shows investors are buyers. Confirm this with the GMMA indicator.
· Buy as price rebounds from the lower edge of the consolidation area
· When trend is defined with a trend line, buy when price rebounds from the trend line
· Use the lower edge of the long term GMMA as a stop loss
· Enter when price moves above the downtrend line
· Add to position when GMMA crossover develops
· Add to position after the first successful test of the long term GMMA support after the GMMA crossover.
Recognizing the correct price and volume relationship allows traders to make a better decision about the best trading or investment approach to use for the trade.
For more detailed discussion of using volume in trading, click here.
In the next column which will be published on Tuesday, we show how charts can help you Catch the Rally.
The Games Traders Play
- Pump & Dump
- More Asia Pacific News
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