The Koncorde indicator is a state-of-the-art indicator created by developer Xavier García (Blai5) that offers compact information on trend and volume.
The Koncorde indicator is Xavier García's most popular indicator (known as Blai5 in the trading community). According to Blai5 the reason for this popularity is that the indicator responds to an unmet need for many traders.
The main idea behind the indicator is 'Match' trend and volume. Hence its name: ‘Koncorde’. All this included in a single indicator. What allows, at a glance, to see what the state of the market is.
Strong hands and weak hands
Depending on the manual and the analyst who writes it, the concept of strong hands and weak hands can change. There are analysts who call strong hands "the sharks." On the other hand, they call weak hands "lambs" or "fish."
In any case, with one or another name, the concept is exactly the same. Strong hands are made up of banks, investment funds, large companies and, ultimately, large capitals. Rather, weak hands are made up of the rest of the market. That is, the vast majority who make investments with small capitals.
The hypothesis of the existence of strong hands and weak hands is simple. Strong hands are the ones that make money. These large capitals have much more information than the rest of the market. And, of course, they have the ability to 'manipulate' the prices. That is, mislead the mass of investors to introduce operations at attractive prices. In summary:
- Strong hands: Large capitals make small investors believe that a security is too expensive or too cheap. They do this through press releases or statements that make the stock seem less attractive. In reality, what they do is "cheat" the market, to introduce operations at advantageous prices. Thanks to the large amounts of money they invest, they have the ability to drive prices up or down when they enter the market.
- Weak hands: They are the small capitals. As some American surveys dictate, more than 90% of traders lose money in the stock market. Therefore, only the remaining 10% of investors make money. As a result, the majority of weak hands are guided by false information or indicators that do not work. They do not have the ability to 'move' a value.
That said, the approach of the indicator is very clear: know what strong hands are doing and 'copy' what they are doing. If they buy, we buy. If they sell, we sell. How can we know when they do one operation or another? Obviously it is very difficult to know, but, in theory, this indicator promises to help us to do so.
The Koncorde indicator
Now that we know what the essence of the Koncorde indicator is, we are going to explain each of its parts. Thanks to computer programming, we can include a lot of information in a single graphical environment. And, in addition, all that information can be summarized in colored areas. As indicated by its developer, the technical indicator is made up of 4 trend indicators and 2 stock volume indicators.
The appearance of the Koncorde indicator is as follows:
As we can see in the previous image, the indicator is made up of four components:
- Green zone: Represents weak hands.
- Blue zone: Represents strong hands.
- Red line: Together with the brown area indicates the market trend.
- Brown zone: Refers to the trend.
Interpretation of the Koncorde indicator
Now, how is this complex indicator interpreted? It is true that at a glance you can see that it is a much more worked and elaborated indicator than others such as RSI, Stochastic or MACD. However, below we will see some of the keys that its creator, Blai5, establishes to get the most out of it.
- Blue zone: When the blue zone is above zero, the indicator tells us that strong hands are buying. And vice versa, below zero indicates sales.
- Green zone: If the green zone is above zero, the indicator tells us that the weak hands are buying. And vice versa, below zero indicates sales.
- Red line and brown area: Both the red line and the brown area are trend indicators. They tell us, therefore, where the market is moving. Or, put another way, if the market is bullish or not.
As Blai5 indicates, the best way to understand your indicator is with a simile that may seem childish but is very effective. It is much more beautiful to see a mountain (brown zone) with abundant pastures at the top (green zone) and under it a river (blue zone) than the opposite.
This is obviously a very simple example. Consequently, its author recommends users who use his indicator to look for richer patterns. That is, the combination of signals generated by the areas will offer us much more powerful signals.