Predict the next Forex price swing using our unique trading strategy

Today, I will show you how to perform candle volume analysis using the Wyckoff Method, we will cover multiple scenarios for predicting tops and bottoms, and I will also reveal a powerful strategy for smart money following using a simple candlestick pattern. Nearly a century ago, Richard Wyckoff began publishing his methods for detecting market supply and demand imbalances.

Predict the next Forex price swing using our unique trading strategy

Wykoff presented his discovery that it was possible to measure buying power. Wykoff’s method proved that selling pressure in any market being traded was predicated on the price chart because the complex man or smart money must leave his trading mark on the price chart due to the sheer size of his trading volume. As well as supply and demand imbalances created by smart money, which are the cause of price movement.

The importance of anticipating price fluctuations in Forex trading

Its activity is measured by four simple variables Price action meaning high, low, and closing price Trading volume The relationship between price action and volume and the time it takes for the price movement to run its course This combined methodology is known as wake candle volume analysis In this article, I will apply candle volume analysis to a single bar reversal pattern known as In the name of the Doge.

You know it very well, this is probably a candlestick dip that happens when the opening and closing prices are the same or very close to each other, the shadows can be either long or short and there can be different types of doji bars but for our strategy, it is not It is important to distinguish what type of doji formation it is, it is just that it is important to be able to recognize what the chart looks like.

Challenges of predicting price swings in Forex

This formation is said to represent a marketing decision because the market opens trades throughout the period and then closes at or near the opening price. The represents a battle between bulls and bears. It is widely believed that neither of them represents a better reversal pattern at the top of the market than at the bottom. However, you will learn that this belief is not true under the right circumstances by applying candle size analysis.

You will learn how to distinguish when there is no hesitation in the formation of a doji. An ideal doji has the same opening price and closing price, but if the difference between the open and closed prices is within a few ticks, then that can also be considered a doji. A doji candlestick indicates a lack of control in the market either By bulls or bears there is no clear direction, bulls move the price up, and bears move the price down.

Eventually, the market price closed exactly or very close to where it opened but if the Doji candle highlights market indecision, it is safe to say that it does not provide insight into whether supply or demand is in control, you have to guess the next direction of the market.

Offering a unique trading strategy to anticipate price swings

This is where Wyckoff candle volume analysis will make the difference at the bottom of the market, where the Wyckoff technician looks for tests of supply in the market. Testing occurs when the price is priced down to see if higher volume comes with a lower price, and if it does, this indicates there is supply in the market.

This supply must be removed before the market can start any significant upward move, but if the market is marked down and no sellers emerge at these low prices, the price will come back to close to the bottom while the volume is lower compared to the previous candles with no supply at the current price level. For the parameters to be valid, the price must rise, the doji test bar must show the following, it must have a lower low than the low of the previous candle and it must display a lower volume than at least several previous candles.

Steps to apply the Forex strategy to the chart

The lower the volume, the stronger the signal that there is no supply, here is an example on the 1-hour chart Notice this clear downward trend with the price starting to make higher highs and higher lows, we are now in a slight consolidation and we don’t know if the price will go up or down.

If there is a decrease in trading volume, this indicates a lack of supply, so you can see that this doji candle is making a new low on the chart and lower volume than the previous two candles. According to standard candlestick analysis metrics that most traders will do, we have concluded that this bar represents hesitation on the part of market participants.

Examples of applying a Forex strategy in different currency pairs

Traders may enter short trades because the doji test bar is enacting new laws, but when looking at it from the perspective of Wyckoff candle volume analysis, it is clear that there is no hesitation here on the chart showing that there are a few sellers at this low price and the price comes back to close near From the opening during the following wars.

This market is starting to make higher highs and higher lows and has increased by almost five dollars with this formation. It is important to understand that the smart money that represents a large percentage of the total trading volume is not selling as lower price levels are explored.

This is evident and is shown by the decrease in overall volume if the smart money does not sell you as a retail trader should be aware of this. This will prevent you from selling at market bottoms and will allow you to initiate a long trade on the path of least resistance.

Summary

If there are no sellers, the price should increase. This stock rose almost $2 as there were no sellers to stop it from rising in value. Now let’s take a look at the Doji at the top of the market, this formation is called a doji order that is drawn at the top. from the market.