8 **Signals from the Price Chart to Help You Trade Better**
In the process of monitoring the market, observing price fluctuations and trading volume can help you make more reasonable investment decisions. Here are some common signs to pay attention to:
**1. Prices fall sharply and then recover slightly? Beware of a trap from sharks.**
When prices plummet sharply and then gradually rise, it may not be a buying opportunity. Often, this is the stage where large investors quietly 'exit' while the market believes it is recovering. Therefore, be patient and wait for clearer signals before entering a trade.
**2. Sudden volume spike at high price levels? The upward trend may still continue.**
If prices are high but trading volume is still increasing, it indicates strong buying power. Don't rush to take profits, as there might still be room for the market to go up. However, be cautious of unexpected reversal signals.
**3. Small price fluctuations, dwindling volume? Prepare for a breakout.**
The market fluctuating in a narrow range with low volume is often a 'spring compression' phase. Stay closely monitored as a significant movement may be coming – either upwards or downwards.
**4. Prices are rising but volume is flat? The increase may not be sustainable.**
When the market is rising without volume support, this is often a sign of unreliability. It may just be a price push from retail investors. Be careful not to buy in right as the market turns.
**5. Active trading at the bottom? Don't rush to catch the bottom.**
Strong volume increase when prices hit the bottom may be a positive signal, but it could also be a panic reaction. Be patient and wait to see if prices stabilize and volume holds before acting.
**6. Prices continue to decline while volume increases? This may be a signal of accumulation.**
Sometimes, when prices are plummeting but volume is increasing, it indicates there may be silent buying pressure – possibly from large investors. However, additional confirmation is needed to be sure this is a real bottom.
**7. Prices suddenly increase and then decrease slightly? They may be accumulating inventory.**
This is a common scenario when 'big players' start accumulating. Prices bounce up to test selling pressure, then adjust slightly. If prices hold steady afterwards and volume stabilizes, it may be a positive signal.
**8. Prices adjust but there is no selling pressure? Stay calm.**
When the market is correcting but volume remains low, it is highly likely just a technical adjustment. Do not panic sell unless there are clear deep decline signals.
