Use Stock Volume Indicators to Reveal Accumulation Patterns
Relational Technical Analysis embodies more Technical Analysis and often Fundamental Analysis to derive a clearer understanding of the behavior of price. A Platform Candlestick Pattern is a very specific type of sideways price action, which only forms when Buy Side Institutions using Dark Pools are accumulating a stock. It forms due to the type of orders these giant lot investors use. They use a bracketed stock order type available only on Dark Pool venues, and thus price can be controlled in a precise manner.
See candlestick chart example below.
The Platform Candlestick Pattern is typically 10–12% in width or magnitude. The runs within the Platform are too small and brief for good Swing Trading, however oftentimes less informed Retail Traders will try to Swing Trade these intrarange runs with results of whipsaw action.
The Dark Pool bracketed orders are automated, but they are not High Frequency Trading Firm orders. The sideways action in itself will not reveal whether this is Dark Pool Quiet Accumulation or Dark Pool Quiet Rotation™ by the giant Buy Side Institutions. Indicators other than those that use just price and time are required for Relational Technical Analysis of a Platform Candlestick Pattern.
Relational Technical Analysis is needed in order to determine if this is Dark Pool Quiet Accumulation which is the buying of stock slowly over many weeks to months, or Dark Pool Quiet Rotation which is the selling of stock slowly over many weeks to months.
This is to lower inventory of a long-term held stock. “Dark Pool Quiet Distribution” is the term used for the sudden selling of shares by institutions to meet redemption demands.
Martha Stokes CMT
TechniTrader technical analysis using a StockCharts chart, courtesy of StockCharts.com
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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