Hey Trader,
Proclaim Your Victories in the Lord
In the world of trading, victories can feel like a personal achievement.
But let's remember the source of all success and give credit where it's due:
As you navigate the markets and experience wins, let your heart be filled with gratitude.
Acknowledge the Lord’s hand in your success, and share His goodness with others.
When you proclaim His name, you invite more blessings into your life.
Keep trading with a spirit of praise and thanksgiving!
Be Relentless In Pursuit Of The Will Which God Has Set Upon Your Heart,
Anthony Speciale
Volume Climax Sets Stage For Double-Top Reversal Setup
As a retail trader, finding an edge in the market is crucial to achieving consistent profitability.
In today’s blog post, I’ll walk you through a real-world example of how I used a volume climax to my advantage during a recent trade on WTI Light Sweet Crude Oil.
This analysis will not only help you understand what a volume climax is but also show you how to incorporate it into your trading strategy.
What is a Volume Climax?
A volume climax occurs when there is a significant spike in trading volume, typically accompanied by a large price move.
This spike often signals the exhaustion of the current trend, whether it’s bullish or bearish.
After this surge, the market might struggle to continue in the same direction due to the lack of follow-through from buyers or sellers.
The market makes a strong push, but just like a sprinter who runs out of steam, the market can lose momentum and reverse direction.
The Trade Setup: Recognizing the Opportunity
On the day of this trade, I was on a tight schedule, needing to wrap up early to catch a flight.
However, that didn’t stop me from seizing an opportunity when it presented itself.
I was monitoring the WTI Light Sweet Crude Oil market using my preferred timeframes: the 5-minute and 4-hour charts.
The 5-min. chart is where I identify short-term opportunities, while the 4-hr chart provides broad perspective, including key levels derived from daily and weekly analyses.
As I monitored the market, I noticed a massive green candle forming at 6:20 AM, accompanied by the highest trading volume seen thus far in the session.
This was a textbook example of a volume climax—a strong push with significant volume but no follow-through.
My Approach: Waiting for the Retest
Although the volume climax was evident, I’m not one to jump into a trade without confirming my hypothesis.
The key here is patience.
Instead of shorting the market immediately after the climax, I waited for the price to retest the area where the high volume had pushed into.
At 6:55 AM, the market slightly pushed through the previous high, only to roll over at 7:00.
Executing the Trade: A Calculated Move
With the market providing clear evidence of a potential pullback, I entered a short position at 7:00 AM.
Given my time constraints, I knew I couldn’t manage the trade all day, so I planned to take profits quickly.
I took half of my position off the table after gaining 27 ticks and moved my stop to secure the remaining position.
The market then moved against me, triggering my stop at a 17-tick profit.
While this wasn’t a massive win, it was a calculated trade with minimal risk.
I followed my trade plan with discipline, taking profits at logical points based on the analysis.
The Importance of Discipline and Consistency
The real lesson from this trade isn’t just about recognizing a volume climax; it’s about the importance of discipline and consistency in trading.
Whether a trade works out or not, sticking to your trade plan and applying your strategy with discipline is what leads to long-term success.
Trading is a marathon, not a sprint. It’s about stacking the odds in your favor by identifying who the market aggressor is and aligning yourself accordingly.
When the market moves in your intended direction, protect your profits and stick to your plan.
This trade may not have been a grand slam, but it was a solid example of how to use a volume climax to your advantage.
By staying disciplined and following my trade plan, I was able to secure a profit and avoid unnecessary losses.
It’s about repeating your edge consistently and managing your risk effectively. If you can do that, profitability will follow.
Stay informed, stay focused and stay disciplined ! ! !
Thank you for reading, and I look forward to seeing you in our next session . . .
God bless, and have a wonderful day!
If you have any questions or need further guidance, please don't hesitate . . . info@specialeanalysis.com May the markets be ever in your favor!
Happy Trading,
Speciale Analysis
About the Author:
Anthony Speciale is a seasoned market analyst with over 13 years of experience trading. Through his platform, Speciale Analysis, he offers in-depth market analysis, interpretation, and expectations designed to help all types of traders, at every skill levels reach their full potential.
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NOTE: Trading involves significant risk, and it's essential to approach it with a well-defined strategy and a disciplined mindset. This blog post is intended for educational purposes and should not be considered financial advice. Always conduct your own research and consult with a professional before making an financial decisions. For further risk related information, please refer to: www.specialeanalysis.com/disclaimer
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