ACCUMULATION PHASE OF MARKET CYCLE

How do you identify the Accumulation Phase?

 

When the "Mark Down Phase" is done, price will make or create a New Support and Resistance,

and that's the beginning of accumulation phase.

How to trade in Accumulation Phase?

When the "Distribution Phase" is forming a pattern, use Fib retracement or Fib Extension to gauge the movement of the price, or to catch the falling knife (Bottom of Mark Down Phase).

and wait for the confirmation candle, no idea about candlestick patterns? (Click here)

-Trading is not easy as that :D -

-How to use Fib?

Wait for the reversal movement of the price, reversal must be 3 to 2 candles with Volume. Then use Fib Retracement to gauge the price movement.

- me personally, I always wait for candlestick pattern or confirmation candle  -

The first reversal price movement must go to 0.618 area or 0.5. Here in this example, let's assume that price is moved to 0.618 area, the golden number they said.

- I won't recommended to trade inside distribution phase especially newbie traders -

Again. Let's assume in this example that the price in distribution phase is done, you now have completely new support and resistance. So now I use Fib retracement by clicking from support to resistance to measure the bottom of the Mark Down Phase.

- if you're trying to catch the falling knife, well best of luck :D -

Now, assume the price will go to 1.618 area, and that's the new beginning of the new support of accumulation phase.

- The new support for the new accumulation phase -

So now, you have the new support of accumulation phase, then how do we identify the new resistance of accumulation phase?

-simple way to identify, use Fib retracement again.

By clicking the Head of the distribution phase, and the longest swing low. Price must go to 0.5 or 0.382 area.

- Again, trading is not easy as that -

then that is the new resistance of accumulation phase.

now assuming the price is in 0.382 area, and that is your new resistance of the accumulation phase.

then use Gann Box, by click the new resistance and support, so now you have a range to trade.

- Gan box or Drava's box -

The question now is, since we have a new Support and Resistance, how do we trade it? What strategy do we need to use?

The answer is Bounce Play.

if we buy at support, we must risk about 1-3% of our shares. Then if you are late, wait for mini pull back, then go to lower time frame and then look for breakout or break resistance.

if you want to short at support, you need or it must have a pattern, and then the AOTS is still forming a inverted AOTS (iAOTS), or the Red Ema is above Green Ema.

PS: This is my personal strategy on how I trade distribution, mark down and accumulation phase. Please! don't try to trade using my strategy, my strategy is not 100% sure to win.