A Look at Market Behavior: Accumulation Phases and Their Importance in Trend Determination
What we are currently witnessing in the market is often an accumulation phase. This process naturally occurs at key support and resistance levels, where traders and institutions gather positions (contracts) before a significant price movement.
This phase can be considered a preparatory period before the price 'launches' towards new levels. After the accumulation is complete, we often see a strong movement in the direction in which the accumulation occurred, which may be followed by another accumulation phase at different price levels.
Patience and Vigilance: In such situations, patience and waiting for the accumulation process to complete are of utmost importance. This helps us determine the true direction of the market and avoid risky early entries.
Monitoring Indicators: It is important to track trading volume indicators and price patterns to determine when the accumulation phase is nearing its end, which may signal the beginning of a new price movement towards new highs or lows.