During the last trading training on indicators we talked about the Black Magician, an indicator that allows us to anticipate volatility and lateralization movements in an asset. Its composition of three indicators is what allows these movements to be detected. Now we can ask ourselves the following question; Is there any indicator to detect how strong hands are positioned? Fortunately for you, the answer is yes. Let's start this trading training by talking about the Koncorde indicator and how to get the most out of it.
What is Koncorde?
The Koncorde indicator is one of the most useful indicators that we will learn in the series of articles on trading training. Was created by Xavier Garcia (Blai5) and, as its name indicates, it is an indicator that matches price trends and volume. At the same time, it allows us to detect which way institutional and retail institutions are positioning themselves. It is recommended to combine it with other indicators and at the same time use it on large time frames for greater precision. We can find it in Tradingview by searching for “Blai5 koncorde” in the indicators tab.
The Koncorde indicator will be the indicator that we will teach you in this trading training. Source: Tradingview.
What indicators is Koncorde made up of?
The Koncorde indicator is made up of 6 indicators, of which four measure trends and two others measure volume. The two indicators that Koncorde uses to measure volume are the IVP (positive volume index) and the IVN (negative volume index. Thanks to these two indicators we can measure the volume traded between institutional and retail. The Koncorde indicator uses the volume, so we will not be able to use it in the foreign exchange market.
Koncorde indicator appearance next to Bitcoin price action. Source: Tradingview.
How is Koncorde interpreted?
The Koncorde indicator, as we have mentioned, allows us to visualize where institutional and retail institutions are positioning themselves. In any case, it is worth noting that the indicator is showing us how both sides have positioned themselves, but it does not assure us of the future movements they may make. With this indicator we can see entries or exits of institutional entities and take advantage of their movements. This indicator is divided into 4 parts:
Parts of the Koncorde indicator. Source: Tradingview.
Blue: Represents institutional purchases or sales. Green color: Represents retailers' purchases or sales. Brown mountain: The “mountains” that form on the Koncorde indicator refer to the price trend. Red line: Combining it with the brown mountain, it tells us the average price of the asset.
How do we take advantage of Koncorde for our trading training?
The Koncorde, like other indicators that we have explained in previous trading training articles, can be interpreted through a series of different price behavior patterns to anticipate future movements. Let's look at six patterns that we can take advantage of with the Koncorde indicator:
Zero pattern
The zero pattern occurs when the brown mountain that marks the price trend approaches zero, indicating that there will be a change in trend. We can position ourselves bullish when the price reaches zero, placing a stop loss below the last bearish candle.
The zero pattern indicates trend turns. Source: Tradingview.
Cutting pattern
When the red line that marks the average of the price cuts the mountain, it signals an entry point to an upward movement. On the other hand, when the same red line leaves the mountain, it indicates the end of that movement and the beginning of a bearish movement.
The cut pattern allows us to identify entry and exit points of a movement. Source: Tradingview.
Spring pattern
The spring pattern is a variant of the cut pattern. We can see this pattern as an analogy of a spring landscape. So, this spring is defined when we have observed a cut pattern and in turn we can see the retail and institutional levels above the zero level. This pattern tells us the strength of a movement, since it re-confirms the structure of other patterns.
Representation of the spring pattern. Source: Tradingview.
Mirror pattern
It is one of the most sought after patterns, it occurs when there is panic in the market and retailers sell (below zero). If at that moment the institutional ones decide to buy, we could consider a good purchase price when the graph levels out to start an increase. It can be used efficiently if a cut or spring pattern is detected after the mirror appears, although you have to be careful because sometimes false mirrors appear.
Example of the mirror pattern. Source: Tradingview.
Bear Hug Pattern
This pattern is the opposite of the mirror, in this case when the minnows are above the mountain, the whales sell. This causes the start of a strong downtrend. The entry to initiate a short position would be the moment when we can see the bear hug pattern together with a bearish cross of the cut pattern.
By combining the bear hug and cutting patterns we can have great short entries. Source: Tradingview.
sperm whale pattern
The sperm whale pattern is a variant of the mirror pattern but more powerful. This pattern occurs when the average price line crosses both a mountain and an institutional line. This combination of signals gives us a strong bullish signal.
The mirror pattern can give way to a sperm whale pattern. Source: Tradingview.
Conclusions from this trading training
After finishing this trading training on the Koncorde indicator we can determine that it is one of the best indicators that we have shown so far. The fact of being able to try to identify the movements of large fortunes in order to position ourselves in the market with respect to their movements is a great characteristic of this indicator. At the same time, it is also worth noting that the series of patterns that can be identified within this technical indicator allows us to detect good entry and exit points, possible floor formations in a trend or even determine the moment of trend turns. As always, we remember that these indicators are more convenient to use with other indicators to enjoy more confirmation signals to make the most of the market.