Technical Analysis: A Brief Discussion on Pro Perspective - USDT Cryptocurrency Exchange Platform Strength and Withdrawal

There are winners and losers in the market,

Of course, the majority are losers.

If we call the small group that always wins the professionals, Pro,

then an important aspect of technical analysis is to think from the Pro’s perspective.

Pro might be institutional investors,

or they might have an information advantage,

In any case, they are not comparable to normal individual investors.

If we compare Pro to a merchant who holds stocks,

their goal is to sell at retail price what they bought at wholesale price.

In this process, they need to play the price game,

Normal investors are easily caught in traps.

Wyckoff uses price combined with volume analysis to gain insight into Pro’s behavior,

In short, whether the price action can be confirmed by volume.

If anomalies occur, extra caution is needed.

Pro is very skilled at exploiting two major investor emotions,

Greed and fear: seeing the bull market trend continue,

regret for not entering earlier, and greed leading to entry; or being frightened by the bear market and exiting in fear.

The result is buying at the top,

and selling at the bottom.

Many times, Pro uses this to cut off the last straw in investors’ hands.

Common stages of Pro’s operations include accumulation,

distribution, and supply-demand testing.

Accumulation: Before selling stocks, Pro needs to fill their position,

so they encourage others to sell.

Pro first causes the market to decline, triggering sell orders,

then begins accumulation.

As the market digests the bad news,

plus Pro’s large-scale buying,

the price gradually recovers.

Of course, they can’t let investors be overly frightened,

otherwise, after the price recovers, no one will dare to buy,

just making them sell out of fear is enough.

Another point is that Pro’s buying power can quickly push up the stock price.

Distribution: After accumulation, Pro prepares to sell,

attempting to push the price higher,

so they encourage buyers to re-enter the market.

Pro will gradually increase the market price and then accelerate,

when the price reaches the target zone, they immediately start to liquidate.

Greedy investors will rush in,

fearing to miss out on a good opportunity.

Of course, Pro won’t sell too much at once.

Supply and demand testing: Simply put, after accumulation or distribution, Pro tests whether the buy and sell orders in the market are fully absorbed,

otherwise, the price may move in the direction they expect.

Take supply testing as an example,

after completing accumulation and preparing to push the price higher,

if there are still sell orders in the market, the price will continue to fall,

which would ruin Pro’s previous manipulation.

So Pro will let the price fall back to the previous heavy sell zone,

observe the market reaction,

and only proceed once all sell orders are absorbed.

This is to flush out the remaining residual strength.

Of course, these are the simplest scenarios,

The key is to think as much as possible from Pro’s perspective,

only then can you understand their actions,

and avoid falling into traps.