Candlestick Patterns: High Volume Spikes
A common bullish candlestick pattern happens when you get a volume trade spike on the market bottoming. When you see this setup, be sure you don’t confuse it with high volume strength push downward in the market.
We are going over a common bull signal that you will see that indicates market support with high volume. These high volume trade spikes, in combination with a bottoming of the market, can give you areas of greater support or resistance in the market for your trades. You can consider these bull signals as physical proof that there are other buyers in the market. The buyers are willing to take long trades side by side. That means that they will also be placing stops outside of these levels (as talked about in a previous video) that you can trade.
We go into how a market can show these signals along with how they can easily be confused with non-bull market signals that do not have a corresponding bar that pushes the market up with high volume so you don’t make that common trading mistake. With this bullish candlestick pattern, we wait for proper confirmation of the reversal.
Bullish Candlestick Pattern: Clear Signal
When the market has high volume trade spikes, you have to put yourself in the mind of traders that are against the current move in the market. The high volume trade spikes are caused by both buyers and sellers pushing the market up and down, but we must keep in mind that the winner of each struggle in trading will not only be more bold from that point on, but will more than likely be profitable in their trade, so they will gain control of the current price in the market, and push it further in their direction.
Applying This Bullish Candlestick Pattern:
Check out the video here for a different view of when the market breaks these key levels.