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Trading strategies

Accumulation pattern in options

Here’s an interesting post which will help you judge the probability of success of a particular position of big money.

Before going forward we just want to make sure you understand what’s an accumulation pattern

An accumulation pattern is where in the data on the tool we have a “Bearish” on the sentiment column and “Long Buildup” on the interpretation column.

Similarly distribution pattern is where there is “Bullish” on the sentiment column and “Short buildup” on the interpretation column.

Through our historical observation we have noted that accumulation patterns are more reliable than distribution pattern.

Also whenever you see an accumulation pattern you should confirm whether such accumulation is along the market direction and not against it based on the rules of deciding a BIAS on the market.

For example Accumulation in puts is to be ignore or given least weightage in a case where the BIAS rules indicate “BULLISH”

Similarly Accumulation in calls is to be ignored or given least weightage in a case where the BIAS rules indicate “BEARISH”

Please refer to our video course to know how to decide a BIAS on any given day.

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