Any ways to identify a “Pump” vs. a Real Capital Entry? 💸
Sometimes it can be difficult to know if a rapid price movement is just a “pump” or if real money is actually entering the market. For me, there are several key details that help me differentiate it:
Volume: A "pump" often starts with a very high volume that drops quickly, which could indicate manipulation. But if the volume remains constant over several candles (like in 5 or 15 minutes), it is more likely to be real money coming in. 📊
Resistance Zones: When the price breaks through an important resistance zone and does not pull back immediately, it could be a sign of genuine buying. In a “pump”, resistances are usually broken abruptly and then the price drops just as quickly. 🔻
Order Flow: Observing how orders move is key. Real purchases leave large orders that remain in the market, while in “pumps” large orders appear and disappear (spoofing). Using tools to analyze market depth helps me see if it is real buying pressure. 👀
Momentum Indicators: If the RSI or MACD does not accompany a price increase, it could be a sign of a “pump”. In a real money entry, the indicators also show an upward trend, with more strength in the movement. 🚀
Reversal Candles: After a “pump”, a reversal candle usually appears without prior consolidation. Real purchases are more orderly and create smoother pullbacks, with consolidation candles. 🔄
Analysis on Larger Time Frames: To confirm it, I always check larger time frames. “Pumps” are visible on smaller frames, but if the price breaks key zones on 4-hour or daily frames and holds, then it is likely a genuine entry. 📅
With these points in mind, I can make more informed decisions and distinguish between manipulated movements and real money entries. 💡
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