“Transaction volume exposes the inside story of major players, the key to wealth for small retail investors!”
Unlike friends with larger funds, who always make more with each transaction, I, as a small retail investor, need to look at a lot of data for my trades.
Among them, transaction volume should be the most genuine indicator we can see. Today, let's talk about the basic logic my trades rely on.
Why do I look at transaction volume first?
Think about it: every stock or cryptocurrency has major players operating it, and many of the indicators we can see may have been manipulated, but transaction volume cannot be manipulated; it is real and genuinely occurs.
Therefore, we need to learn to analyze the relationship between transaction volume and transaction price, using transaction volume to verify the authenticity of price changes, thereby gaining insight into the behavior of major players, and then quietly following the major players to share in the benefits.
The reason transaction volume can reveal the entry and exit behavior of major players is that transaction volume is the driving force of the market. If transaction volume is sluggish, the market is difficult to operate; if transaction volume does not match price changes, there must be unusual movements.
For example, if the price rises and transaction volume also gradually increases, it indicates that the price rise is supported by transaction volume, with many buyers optimistic about the market and buying in large quantities. At that time, I will decide whether to sell and how much to sell based on the market's view on the cryptocurrency...
Similarly, if transaction volume decreases and transaction price drops, it indicates that there is no support below; outsiders are not optimistic and no one is buying, while insiders who want to exit can only keep lowering the price.
There are two outcomes: one is that the momentum of the cryptocurrency is still quite strong, possibly due to a major player's significant adjustment, leading to buying; the other situation is that there is no support, leading to early selling due to weakness, looking for other opportunities or aiming for the next one...
So the logic here is very simple; everyone can apply the formula:
First, the size of transaction volume is relative.
The range of transaction volume for each stock is limited by the circulating share capital, so the measurement standard for transaction volume for each stock is different;
Second, transaction volume is closely linked to price.
Only by studying the relationship between transaction volume and price can volume-price analysis be effective;
Third, pay attention to the timing of transaction volume formation.
Clearly judge whether it is a long-term mild increase in volume or an instantaneous surge in volume.
I have read many books on technical analysis and strategy analysis, and I hope everyone finds them helpful after reading, forming strong judgment and strategy. I suggest trying small amounts and diversifying positions. CC hopes that after reading, students will have their own insights and apply them, forming their unique trading style! Wishing everyone to enjoy profits!