This too was a nice, very nice setup $AP
The Setup 1 Works Amazingly Well on Stocks on the days when they go Supernova. The thing is the Market as a whole, almost all charts usually stay within a choppy range because there is little interest from the market participants. There is no CHAOS. In the world of Trading Chaos Chaos means New Incoming Information)
In general, the Daily chart is great for almost all types of charts whether its stocks, commodities, futures markets, forex or crypto.
In order to make money in trading, we need to trade stocks or markets with healthy volatility. Most Stocks or charts don't have enough volatility on normal days. So, What is volatility?
Volatility is the range of price change a stock or chart experiences over a given period of time
However, there are times when the volatility increased 2 or 5 folds from its usual. That's when the charts on lower time frames are smooth.
Chart Patterns Require Data per Time Period
and TIME on the X-axis; the horizontal scale at the bottom of the chart.
The thing is the scale at the bottom never stops, it keeps ticking at a set interval. Its frequency can be altered by switching time frame.
However the data on the y axis, the price plotted on the vertical scale comes from the market. We can't change that bit of the data. Well, if we could then.. whooahaha... that would be awesome, but a whole different game. but let's not get into that.
And if there isn't enough data coming in per minute then the one minute chart will be EMPTY. So when a new 1 minute candle or bar is printed but there was no DATA from the market, it will be either skipped or printed as an empty single data point. Basically it means there was nothing to report during that minute.
If a chart keeps getting very low tick volume it is going to not create a smooth chart. Where there are less than say 20 ticks of data per minute that chart will look very bad. Like the chart above.
The above is a chart from the LSE. I just randomly picked it from the London Stock Exchange feed. This was a gapper and mover last Friday. Yet it has nothing. The Market was not excited about this company. Nobody went nuts.
Compare this to the following chart.
the above chart also had gaps and missing data. It's a one minute chart of a US stock but not much volatility, no volume and not much useful information.
This company has a market capitalization of 157million. Hence not a very small company either.
The volume it had was 108 million stocks.
But then something happened.
In the Science of Trading Chaos Terminologies. CHAOS hit the market. Yes, NEWS came out. There was NEW Incoming Information.
Something that took the market's attention happened on Thursday.
The NEWS Event:
vTv Therapeutics (VTVT) was surging Friday, at one point climbing 118% to its highest share price since March 2018 at $4.75, after disclosing in a new regulatory filing late Thursday it exercised its right to have MacAndrews & Forbes Group LLC buy 625,000 of its class A shares at $1.60 each, providing the biopharmaceuticals company with $1 million in new funding.
And that resulted in this action.
LOOK AT IT GO....
That stock, with rubbish, dotty no data chart turned into this BEAUTIFUL Setup 1 pattern.
It was getting volume of around 20K a few days ago ... but when it opened last Thursday the 10 of Dec 2020, its first candle showed 380K volume on the one minute chart. that's a 15 fold rise in volume. So its RELATIVE Volume shot up. Aha, there is a hint. RELATIVE VOLUME
What is Relative Volume?
Relative Volume (often times called RVOL) is an indicator that tells traders how current trading volume is compared to past trading volume over a given period. ... So if it is showing 3.5 relative volume, that means it is trading at 3.5 times its normal volume for that time period.
So I ran a little test.
Did a bit of research.
and voila... it was out there all over the internet
But the universe is so large that it probably has more than 2 trillion stars in it. It is likely to observe about a million of Supernova per day. WOW....
Which means that if you focus your Telescope on the sky the size of a coin for a few hours you might find one or two Stars go Supernova. It is a RARE event yet the universe is SO Large that it isn't rare. Weird...
The Point I'm trying to make is this. Not every stock goes supernova over its lifetime. But there is a Universe of Stocks out there. 1-2 stocks go supernova nearly every day in the Stock Market Universe.