Replies to post #6595 on lowtrade

[Razorbucks]

Since the challenge was directed toward you,

I figured that I'd test myself after you answered. Let's see what the guru has to say.............

I haven't had time to do much analysis lately, and I feel like I'm slipping a bit. In the past, I haven't tied volume to the formation very well. I understand breakouts also need good volume for confirmation, but some of the other patterns (HS & RHS, Double & triple bottoms & tops.) They have expected volume gains and declines during the formation. I'm trying to pay better attention to these details to rule out weak formations/consolidation. CMF helps.

Good Luck!

[lowtrade]

DWDP Chart

OK everyone answered my question correct. Ascending triangle. Now the art in the "art form of charting".

You'll note I didn't pick the start of the triangle @ .375 on the 14th. Because the ascending line is not reached with the candle bodies. So I moved the line to where the PPs does meet the line.

This took alot out of the target. GOOD work though.

Razorbucks
As for volumes, Not to worry too much about volume before a chart pattern breakout. The volume comes when the breakout is confirmed by the ADX increasing with the DMI+.

Because ADX is the mean average of the DMI+ & -; it laggs. And by the time it turns, the herd has caught on to the breakout start and confirms a safe entry.

Many times the DMI+ will cross DMI- and the PPs will not continue to climb. This is what I call an early enrty, mistake.

Confirmation of the move continuing is when the retail traders come on board and that is seen in the ADX moving up with the DMI+, slightly latter then the original pop, which may fall apart without retail coming.

So while your looking for volume, I'm saying the real CONFIRMATION is seen in the ADX. The indicator which shows retail interest. And the volume is the result, not confirmation.

You may read some indicators say, Needs volume to confirm. I'm taking it a bit farther, by showing WHY the volume comes.

If the ADX doesn't turn up with the DMI+, the volume will not come, because retail has not increased interest and what ever started the PPs pop was not important enought to bring them!

A real important point to help with an entry decision. If you believe the cause of the pop will bring volume & retail interest.

Go for the early entry with the DMI+/- cross. If your not sure, play it safe and what for the ADX to tell you it's going to continue. By turning up with DMI+ & crossing DMI-, like the DMI+ did earlyer.