Decision Making

Buy OR Sell?

How to decide?
BASIC DECISION MAKING
POINTS
– Volume
– Previous candle
– Channel
– Volume profile
– LVN
– HVN
– Bell curve
Volume

Volume bars are an important part of the market study and help us make
important decisions, using volume bars itself we get more than 60% of accuracy.
So, How to use it?
Rising Volume and rising price represents intrest and growth in the market, while
decreasing price and rising volume represent lack of interest and may indicate a
potential reversal.
Sudden above average growth in volumes also may mean that the market is
gearing up for a move
Here we will see how volume
affects price movement.
At first there was huge above
average volume supply, and price
had a huge fall, due to increase in
supply, or bearish volumes. Later on
price had a growth when volume
grew bullish thus price also
increased showing interest or an
uptrend. When the trade ended,
there was a slight increase in
bearish volumes, showing a drop I
price but not so significant as it was
average volumes. Then there was
accumulation of volumes or
consolidation of price, which was
bullish, thus the overall volume of
that point of time was bullish, thus
there were mostly bullish trends.
Previous Candles

Candle patterns most likely repeat many times and viewing previous candles again
and again helps read the chart and prediction easier.
Candle Engulfing:
Is where one of the candle is completely engulfed by the next candle, this is one
such instance where it may represent a continuos trend or a sudden reversal based
on bullish or bearish candles. A bullish engulfing pattern occurs after a price move
lower and indicates higher prices to come. The first candle, in the two-candle
pattern, is a down candle. The second candle is a larger up candle, with a real body
that fully engulfs the smaller down candle.
These are some of the major signals given, Some are implicated in the pattern, At the beginning there was a first green candle
that engulfed the bearish candle completely and gave us an uptrend. Later on There was a bearish hanging man, which
represented the begin of a downtrend, but how did we know it wasn’t a false signal? We understood that it wasn’t a false signal
when the candle was almost 50% below the prev candle body a engulfed by the prev candle representing that price cant grow
much anymore, we got the next conformation when the next candle was also bearish.
Channel

A channel is a zone where The upper trend line connects the swing highs in price,
while the lower trend line connects the swing lows. The upper line of Channel
represents the resistance line while the lower one acts as a support line. Whenever
the body of a candle touches and crosses a trend line, it indicates a change in trend
direction 80% of the time. Channels also help understand whether it is a uptrend
downtrend or sideways which later helps figure out the which side to buy and
which side to sell. The longer price stays below or consolidates under one of the
trendlines the more significant the swing move
When price moves in a channel whenever price touches one of the trend lines price changes direction but stays in the chanel .
The upper line is resistance and the lower being support. When price moves along one of these lines while consolidating it
shows that price will have a significant move on the side of support or resistance, if price moves more along along resistance
then there is a higher chance that if there is a breakout or breakdown it will be more significant, the longer price moves along
lines, the more significant breakout.
Volume Profile

Volume Profile is a study of stock activity at a particular price opposed to different

times. The main concepts of VP are: POC, HVN,LVN and Value area.
HVN(High volume node) And LVN(Low volume node) represent breakeven points,
for traders, wich is why these levels work so well. Taking note of these regions,
help understand whether market is consolidating or gearing p for a swing move.
POC (Point of Control) Refers to the bars which is most traded activity, This area
helps monitor the stops or entry levels.
HVN (High Volume Node)

This is generally an area where price moves sideways, and it is risk free most of the
time, a range is formed in this area. Market digests the trading volumeand demand
and supply controlled in this area. This area is a base of entry and exit levels. And
marks a consolidation phase . In a swing trading point of view this area defines
support and resistance, channels are formed in this area most of the time.
Price was Having a swing drop from around 237.89 till 63.90 but shortly after price moved into
the HVN It started recovering and moving in a consolidation phase. Thus proving that HVN is an
area of balance and consolidation, the longer that price stays in a HVN or area of balance the
more significant and aggressive move in LVN
LVN (Low volume node)

LVN represents areas where little trading activity took place this a price level or
zone that’s gets quickly rejected by traders. Price movement is LVN regions is very
swift and aggressive, even though it is a high risk area, LVN represents a
opportunity of huge profit or loss. Price usually passes through/tests this level and
gets rejected and moves back to HVN most of the time. Price usually doesn’t cross
the Highest LVN and Lowest LVN in a day, if it test or crosses the following mark
Here as price entered the LVN it started
having an aggressive drop, Thus
proving that when price LVN is a price
of imbalance and also that price
doesn’t usually break the LVNs because
price starts having aggressive
movement and if crosses the LVNs
market will have an imbalance, and
crash
Bell curve

In Some occasions the are more than one HVNs and LVNs in these occasions a bell
curve is formed, such as when prices moves out of the HVN into a LVN and starts
creating another HVN the LVN then becomes a bell curve, looking like a reverse
HVN. Bell curves usually represent Strong and significant tugs between Bullish and
Bearish Traders. The more fluctuations that happen, the more curves appear
representing significant power domination between the traders.
Here price was moving
steadily in the HVN at 276.02
But as the price exited the
node it made a swing move
and again at the other HVN
it moves quite steady again.
Thus it has been proved that
the area between two high
volume nodes forms a bell
curve and moves in a swing
but again in hvn moves
slowly
MACD (moving average convergence
divergence)
MACD Divergence is a simple method to help us recognize an upcoming reversal or
change or trend.
Divergences can be bullish and bearish, these are lines connecting two bell curves
of the macd and signal line. When the divergences are opposite or do not follow
the trend direction, when price is moving along the lower lows and the divergence
line moves along the lower highs it represents that the market is gearing up for a
bullish move.
This is a bullish divergence
 Price in the beginning
was moving along
towards a downtrend,
but the divergence was
drawn upward with
signal line and macd also
representing growth and
histogram slightly moving
upward.