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Sharing a set of market patterns I have organized, based on the relationship between price and volume to determine the intentions of the main players.
First, let's discuss signals of distribution and accumulation. Rapid rise with slow decline usually indicates distribution by the main players, whereas rapid decline with slow rise suggests accumulation. The difference in the speed of these two trends is very important.
Next, let's look at the meaning of volume expansion and contraction. A volume surge followed by a short-term pullback is normal for shakeouts, while volume expansion during a decline may indicate a rebound is coming. Volume contraction is even more interesting—an upward movement on decreasing volume suggests the trend will continue higher, while a decline on decreasing volume signals further bottoming, but if volume remains low and price doesn't fall, the bottom is essentially confirmed.
How to interpret a sudden decline with no volume and a break of support? A decline with no volume can be a bullish sign for the future, while a volume break of support requires preparation, as the adjustment cycle may be longer.
Pay special attention at high levels. Do not rush to sell during sideways consolidation with decreasing volume (this is shakeout), and avoid selling during a decline with decreasing volume at high levels (this is a trap). The opposite applies at low levels: do not sell during a sharp decline (based on the "golden pit" logic), and when a large bullish candle appears on high volume at low levels, subsequent pullbacks are the best buying opportunities.
Finally, a reminder that the market is inherently uncertain. These patterns are probabilistic, not absolute laws. Be sure to conduct proper risk assessment before participating in trading.