Climax (V-Shape Pattern)

  • It is the usually the highest height before distribution or lower low before accumulation.
  • it is your usually marked by a WRC (wide range candle) with a climatic (ultra high) volume.

confirmation OF climax:

The confirmation of the Climax can only come from Logical Event no. 3 (Reaction) & Logical Event no. 4 (Secondary Test).
  • Selling Climax
    Before Accumulation the climax is called selling climax.
  • Buying Climax
    Before distribution the climax is called buying climax.

Uses of Climax:

  • It is an indication that trading in the direction of trend is not a good idea anymore.
  • The current market level might be a good place to book profits from previosly open trades (if any).

Note:

That trend doesn’t necessarily end with the Climatic (ultra-high) volume, instead of a climax, there could be exhaustion.
Because to confirm climax we have to check the logical event 3 & 4.
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