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A pro has been watching the market for three years and finally understands one thing: Candlesticks themselves do not speak; they merely project the market maker's "voice" onto the screen. Want to predict the future based on a few candles?
No way; but if you can understand the market maker's jargon, at least you won't be led by the nose.
I have summarized three commonly used coded phrases to share with you.
Secret Code 1: False Breakout, Real Lift
The script is usually written like this: the price suddenly breaks through an important support level, and the comment section is instantly filled with wails. Retail investors see the breakdown and hurriedly cut their losses. The market maker, however, quietly buys back the chips and pulls the price back above the support level before the close.
Identification Method:
1. Look at the closing. After the 1-hour Candlestick breaks the support and then closes back above, it is highly likely to be a market maker wash.
2. Observe the trading volume. A spike in volume at the moment of a breakdown, but a decrease in volume during the rebound, with clear signs of wash trading.
Secret Code 2: Price-Volume Divergence Alert
Prices are hitting new highs, but the volume is shrinking - a typical "false prosperity". Conversely, when prices remain unchanged and the volume suddenly increases, it is mostly the market maker secretly accumulating.
Last year I suffered losses in a popular coin: the daily chart reached a new high, but the trading volume decreased day by day, and as a result, three days later, a sharp drop occurred, wiping out all profits.
Secret Code Three: The Crisis of High-Level Consolidation
Consolidation is not a rest, it is a distribution. At the bottom consolidation, the market maker is accumulating; at the top consolidation, the market maker is distributing.
Distinction method:
1. The market is consolidating at the bottom, with volume gradually increasing, and the bearish candle is quickly engulfed by a bullish candle.
2. The top is moving sideways, with volume gradually shrinking, and the bearish candles slowly engulf the bullish candles. Once this is accompanied by a surge in open interest, the storm is coming.
Is Candlestick useful?
Useful, but don't just look at the ups and downs; you need to read the intentions behind them.
When you can understand these three coded phrases, the market is like a movie with subtitles, and the plot is clear at a glance.