Welcome back to moomoo! Big institutions can move the stock market. To set up your trading strategy, it's essential to know where these institutions are investing their money. In today's video, we'll discuss how you can use volume price strategy during earnings season to gain better insights.

Earnings season is an exciting and volatile period for traders, but not everyone knows how to make the most of it. We'll explore two examples to illustrate how understanding volume price strategy can help you make more informed trading decisions.

Before Meta's financial reports were released in April 2023, its stock price took a dive from $222 to $207. But after the earnings release, the stock price rebounded all the way up to $241!

Similarly, before AMC's financial report came out at the end of 2022, the stock had been falling for eight days straight. But two days after the report was released, the stock price went up by more than 30%.

With all this volatility, it can be tough to keep up with the momentum. But that's where our 4-step volume price strategy comes in.

In this video, we'll show you how to understand the moves of big market players and ride the wave with them using this strategy. So let's get started and dive right into it!

Step 1. Identify the trend

The first step in recognizing momentum is to identify the trend. Drawing tools can be helpful in this process. Try connecting lower lows and lower highs to find a downtrend or higher lows and higher highs to find an uptrend. By identifying the trend, you'll have a better idea of where the stock price is headed and can adjust your trading strategy accordingly.

Step 2. Combine price with volume to understand momentum

Volume is an essential tool for understanding market activity and liquidity, reflecting the level of demand and supply.

High volume shows high liquidity, suggesting that there is strong support for the current price movement.

To better understand volume, let's take a look at one volume indicator available on moomoo: the Volume Oscillator. To use it, open a chart of the stock you're interested in and find OVSC among the indicators. If it's not listed, click "More" to add it.

The Volume Oscillator helps determine if the overall volume is increasing or decreasing. A high OVSC indicates rising volume and strong momentum, while a low OVSC suggests declining volume and weak momentum. However, volume alone does not indicate the direction of momentum. We need to combine OVSC with price action to understand the direction.

Generally speaking, if the price goes up with the volume oscillator increasing, it reflects a strong uptrend.

If the price goes down with the volume oscillator increasing, it reflects a strong downtrend.

Conversely, if the price goes up with a declining volume oscillator, it reflects a weak uptrend. Traders should be careful if they want to take a long position, as it might indicate the uptrend is losing its momentum.

If the price goes down, with a declining volume oscillator, it reflects a weak downtrend. This shows the downtrend is losing its momentum, and traders should also be careful when taking a short position.

Step 3. Use candlestick patterns for further confirmation

If you think you've identified the direction and momentum of the trend, you can use candlestick patterns for further confirmation.

For example, if you find a weak downtrend followed by a bullish pattern, it could indicate potential buying pressure. Traders who want to take a short position should pay attention in this case.

Conversely, if you find a weak uptrend with a bearish pattern, it may indicate potential selling pressure. Traders looking to take a long position should be alert.

To learn more about candlestick patterns, check out our Trading Tutorials under the Learn Tab. We introduce all commonly used candlestick patterns with real cases.

Let's take a look at two random examples of AMD and BAC. From December 2022 to January 2023, AMD saw a downtrend. You may find a decreasing Volume Oscillator at the second half of the trend. On January 4th, a hammer pattern formed, when an increasing Volume Oscillator also took place. Downwards price with decreasing volume oscillator indicates a weak downtrend, together with a bullish signal, which presents a potential signal of strong buying pressure, and it turned out that the stock price climbed after the signal formed.

Another example is BAC. After releasing its earnings report in January 2022, the company saw its stock dropping for several days before forming an uptrend. At the end of the uptrend, a bearish engulfing pattern formed along with a decreasing volume oscillator. An upward price movement with a decreasing volume oscillator indicates a weak uptrend in combination with a bearish signal, which suggests strong selling pressure. As it turned out, the stock price fell after the signal formed.

While these signals can be useful in identifying buying and selling pressure, it's important to note that they should not be used as the sole indicator for a trading decision.

Step 4. Use Institutional Tracker on moomoo for long-term tracking.

In addition to indicators and chart patterns, traders can also use tools like Institutional Tracker on moomoo to directly track the actions of large institutions.

By watching the trading activity of big institutional investors, individual investors can get a better understanding of supply and demand, or buying and selling pressure.

With Institutional Tracker on moomoo, traders can easily view both the holdings list and holdings changes of top institutions. This includes information on increased, decreased, new, and closed positions. Let's take Berkshire Hathaway as an example. The institution has recently raised its positions in five stocks, including OXY.

Taking a closer look, we can see that there has been a consistent increase in the position of OXY since Q1 2022. This may indicate Hathaway is relatively positive about OXY as it continues to invest in the stock.

Scrolling down, we'll find Trending Stocks. The stocks that are currently most appealing to institutional investors are listed in the Most Held section. Additionally, we can monitor the dynamics of buying and selling pressure through the big players' holding changes, shown in the Position Increase and Position Decrease sections.

Summary

That concludes today's Volume Price Strategy video. I hope you find it helpful and informative. If so, please hit the like button to show your support!

If you've used indicators or Institutional Tracker on moomoo, we'd love to hear your thoughts and suggestions in the comments section below.

Also, you can enhance your trading potential with our stock toolkits to make your investments easier and more efficient.

Thank you for watching, and we'll see you next time. Bye!