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Accumulation

What are Supply and Demand Zones and How to Trade with Them?What are Supply and Demand Zones? ▷ Demand Zone (Accumulation Area): Accumulation comes from a Latin word meaning to increase something over time. A strong uptrend can only exist if buyers outnumber sellers. During a trend, price moves up until enough sellers enter the market to absorb the buy orders. The origin of strong bullish trends is called an accumulation or a demand zone. Demand Zone is where traders are willing to buy aggressively because the balance has shifted to the demand side. Here, buyers are dominant and sellers weak. The demand zone represents a period of implicit buying, typically by institutional buyers, while the price remains fairly stable. This area is characterized by mostly sideways price movement. Before a trend starts, price stays in an demand zone until the “big players” have accumulated their positions and then drive price higher. This can be contrasted with the Supply Zone, where institutional investors start to sell. ▷ Supply Zone (Distribution Area): Bearish trends are created when sellers outnumber buy orders. Then, price falls until a new balance is created and buyers become interested again. The origin of a bearish trend wave is called a distribution or a supply zone. At Supply Zone traders are willing to sell aggressively because the balance has shifted to the distribution side. Here, sellers are dominant and buyers are weak. Support and Resistance Levels vs. Zones If you have an idea of how to trade with support and resistance zones, you might find supply and demand zones very similar. You won’t be mistaken; Supply and demand zones are natural support and resistance levels. You’ll often find supply and demand zones just below/above support and resistance levels. Types of Supply And Demand Patterns There are two types of patterns: “Reversal” and “Continuation” patterns. While a pattern is forming, there is no way to tell whether the trend will continue or reverse. As such, careful attention should be paid to whether the price breaks above or below the zone. ▷ Continuation Patterns If price continues on its trend, the pattern is known as a continuation pattern. We have two continuation patterns: “Rally-Base_Rally” and “Drop-Base-Drop” ▷ Reversal Patterns When price reverses after a pause, the pattern is known as a reversal pattern. The established trend will pause and then head in a new direction as new energy emerges from the other side (bull or bear). Reversals that occur at market tops are known as distribution patterns. Conversely, reversals that occur at market bottoms are known as accumulation patterns. We have two reversal patterns: “Rally-Base_Drop” and “Drop-Base-Rally” How to Find Supply and Demand Zones? On a price chart, the demand zone is characterized by sideways price movement on above-average volume. When a stock price doesn't fall below a certain price level, and moves in a sideways range for an extended period, this can be an indication to investors that the stock is being accumulated by investors and as a result, will be moving up soon. The demand and supply zones are encompassing the base on the beginning of the move. The most important thing is to first finding a sharp move in either direction, after which you can identify its starting point and roughly define the supply or demand zone: • Look at the chart and try to spot successive large candles. • Find the base from which price started the quick move. Usually, before that you have a small sideways move, that is where your supply / demand zone is. • Draw the zone It is very hard to be precise with those levels and here it is more of an art than science. To make it easier to identify these levels, you can use another tool for confirmation. How to Trade with Them? One way to trade with supply and demand areas is reversal trading. After identifying a previous strong market reversal, wait for the price to return to that area. If a false breakout occurs, the chance of seeing a successful reversal is extremely high. Some candlestick patterns such as "Engulfing", "Pin Bar" and "Tweezer Blades" can help you identify trend reversals. Be careful, trading in the opposite direction of the trend is very risky. Technical analysts typically recommend assuming a trend will continue until it is confirmed that it has reversed. Trend reversal trading can be a profitable way to trade the markets. However, like any other trading strategy, there is a correct and a wrong way to do it. Pros and Cons Being able to recognize whether an asset is in the demand zone or the supply zone is helpful to investing success. Demand Zone is the origin of a big rally in price. Identifying this area could help investors spot good entry points into an investment before its price begins to rise. Once the price leaves an demand zone, not all buyers got a fill and open interest still exists at that level. Supply and demand traders can use this knowledge to identify high probability price reaction zones. As with anything else, supply and demand zones have their cons, as well. Understanding chart movements such as those seen in the accumulation area can work well during times of relative stability. Still, prudent investors know to pay attention to larger economic events that can quickly reconfigure charts (like the covid-19 epidemic) Key Points • Accumulation / Re-accumulation zones can becomes distribution/Re-distribution zones over a period in the Stock Market • The narrower a supply/demand zone before a strong breakout is, the better the chances for a good reaction the next time typically. • Good supply and demand zones are quite narrow and do not hold too long, which shows strong imbalance between buyers and sellers. • The stronger the breakout, the better the demand zone and the more open interest will usually still exist. • Always look for extremely strong turning points. They are often high probability price levels. • Each time the price re-tests a supply/demand zone, more and more previously unfilled orders are filled and the level is continually weakened. Conclusions Supply and Demand Zones are a great way to identify areas of buying and selling as well as support and resistance, but they work best when combined with other kinds of technical analysis.
BITSTAMP:BTCUSDEducation
by BobRivera990
8
Market phases explained through ACS' graphA few days ago, I identified the different market phases through this company's graph: uptrend, distribution and downtrend, which could imply that the market is right now within the accumulation phase. This phase is characterized by the price of these shares being lateral and, when this phase ends, a new trend will begin. Therefore, I consider that keeping an eye on this company can be interesting in order to identify the brand new trend as it starts, so that we can open positions in favour of it. If we have a closer look at the last candles that have been drawn in this graph, we can appreciate that the price of these shares has recently tried to break the accumulation range downwards. Nevertheless, buyers have been strong enough as to not let sellers to. The uncertainty surrounding the price's future direction is still there, so we will keep on waiting until we observe a clear brekout.
BME:ACS
by mar_lpz
54 & 62-68As for now, where is see amp being into it's cycle, is into an accumulation on the shorter term, that is into a spring formation of the accumulation forming on the actual longer term/bigger picture. So this re-accumulation, visible on the 4 hours; Is the spring formation of the bigger accumulation amp is; Here the advancement on the 4 hours that is the spring of the daily since I did write this a few hours ago; Expecting a rise to .54, where is the upper range of the cycle forming into the daily spring, and a break upside this area on maintained demand, will tell me that price is moving forward into the daily accumulation, leaving it's spring. The 60 will be then considered but before moving higher I do expect some consolidation between .54 & .60, since a test of the spring is still needed, and more test of the zone within that range. .68-.75 is something I consider on the longer term, and when price will give obvious sign that it is leaving it's big daily accumulation formation. Not considering at test of lower zone unless it goes back under .46-.47 showing weakness Weekly
COINBASE:AMPUSDLong
by bibsz
2
FLUX/USDT Breakout !!!! Preparing for the next pumpFLUX made an almost 500% pump in the last month. Since the ATH made a 50% correction. FLUX has broken the downtrend twice after finding support at 0.786 fib and a strong support order block (confluence area - Yellow box). We can see a similar pattern in Kadena (KDA) where they both ride together. At this stage, we can see a massive accumulation happening (refer to the VPVR) before the mega pump. If FLUX pumps from here and breaks the current resistance around $2.3 we will see a new ATH soon. If the support doesn't hold we might see a bounce back from 50 EMA. Also, keep an eye on 21EMA acting as resistance in the short term. This is not financial advice please DYOR. This is coin has great fundamentals recommended to accumulate for the long term.
Long
by CryptoCafeClub
4
BTC Price Action Update - ConsolidationThe price moves interestingly, seems like it has trouble continuing a bullish movement right now - the price entered an equilibrium, in my opinion, it's a reaccumulation that will break strongly upward I will break the stages down 1. SC - AR - ST - Small Correction: Those created and completed Phase A - Stopping the previous trend: the fact that the correction that came after the ST was very weak is a good sign - which brings me to the next point. 2. Upthrust That Upthrust marks the beginning of Phase B - Building the cause: the upthrust is very strong, it is made of relatively big green candles and small, hammerish red candles. the fact that the price has strong support in the exact middle of the range is also positive - it shows that the channel is bullishly narrowed and that the interest in lower prices gets lower. will update as the range develops
Long
by dma300
Bitcoin - possible accumulation at 54000$ zone - Wyckoff55200 is the key level. To stay below it is rather a continuation of declines. I have a short now with 55100 - after the weekend we should definitely drop to 54000 (cme gap). However, I think we have an accumulation of 54k and I expect a bottom exit to around 53k and a comeback. I even see the possibility of returning to the area of 64k. But now you have to watch the market closely because of this covid fud. The current situation is dynamic, so be careful
by czupryn888
1
Re-Accumulation is almost Over!This presentation is for informational and educational purposes only; it should not be construed as investment advice of any kind. As mentioned in previous post, We expected prices to jump after the absorption of supply. We achieved our first and second targets (+31.5% , +50%); perhaps we may now move towards achieving the third target. Re-accumulation process is nearly complete, maybe we are at the last stage before prices rise again as we have the rate of which short-term holders have been selling has decreased, while the rate that long-term holders are buying has increased. We still need to see a bullish reversal candle to confirm entry; If this does not happen and the prices continue to go down, the trade will be considered invalidated. So Are we about to “Jump the Creek” ?
TLong
by Akaai
Hidden Wyckoff Accumulation, Spring And Breakout Scenario!Hi all, Latest price action showed wyckoff is not a pattern but a scheme. Lot's of non-text-book, incomplete distributions and accumulations and their twisting combinations occured, so i digged in to the idea of a bigger underlying structure of accumulation, right under the yearly resistance at 58k looked very much possible to me especially after many bullish w shaped bounces i mentioned in my previous post. It's not text book, but the volume reveals the climactic action on PS and close to SC. If Bitcoin was to dip below 50k, it would do it without warning! This is pretty much sideways trading range, a good sign of accumulation, yet to be confirmed by a spring, breakout and a strong rally. Be prepared. As always trade safe and use a stop loss & stop buy!
by BitcoinMillio18
17