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Nikita (SEBI RA)

25th Nov · SEBI-Registered Analyst

Why Market Trends Start With a Volatility Compression Zone (VCZ) 📉➡️📈

Most major trends begin quietly — not with a breakout, but with volatility compression. What Is Volatility Compression? A phase where: Candle size becomes smaller High–low range narrows Volume dries up Price coils inside a tight structure This signals that supply and demand are reaching equilibrium, and a strong directional move is coming. How to Identify High-Quality VCZ: 1️⃣ Tight consolidation after a major move 2️⃣ Decreasing volume 3️⃣ Multiple inside candles 4️⃣ Price contracting into a triangle/wedge Why It Works: Institutions accumulate when volatility is low to avoid market impact. When imbalance forms → volatility expansion → big trend begins. Learning: Whenever the market becomes unusually quiet, a loud trend is often coming next.

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