Hello !
Here we go with another analysis solely based on price action and psychology in the stock market.
Key points :
Basically, what I see here, is an accumulation on a congestion zone. The traders that didn't trade the 9.00-to-12.50 zone, are now lining up because they don't wanna let the train leave without them.
What's the plan ?
I calculate my risk/reward ratio and I start by buying half of my final position. If the trade appears to go in my favour, I'll add the other half. In this context, I'll probably add around 13.80/14.00 after the break of the resistance on the hourly chart.
The three screen method
The method I use to analyse my trades is called the "three screen method".
I start by looking at the scale above my regular time frame which is the weekly chart (3 years - weekly) where I highlight notable resistance and support zones and in normal market conditions look for ongoing long-term trends (stock market participants have a "memory", they tend to remember old resistance and support zones).
Then, I switch to my regular time frame, which is, in my case, the daily chart (6 months - daily). Here, I watch the price action and think in terms of "what are other traders doing ?". This is where I plan the trade.
Finally, I switch to the scale below, which is the hourly chart (1 month - hourly). What I look after on this time frame are minor resistance and support levels.
Note on support and resistance
Support and resistance are not numbers or lines on a chart. They define congestion AREAS/ZONES.
***This is not an advice to buy the stock. You should never ever blindly follow a trader's idea without knowing exactly what he talks about.***
Thanks for reading and if you have suggestions or wanna discuss the idea, just leave a comment, I'll be happy to answer.
Here we go with another analysis solely based on price action and psychology in the stock market.
Key points :
- Breakout on high volume
- Previous resistance becomes support
- Fibonnacci Retracement : 50%
- Volume rises as demand for the stock increases
Basically, what I see here, is an accumulation on a congestion zone. The traders that didn't trade the 9.00-to-12.50 zone, are now lining up because they don't wanna let the train leave without them.
What's the plan ?
I calculate my risk/reward ratio and I start by buying half of my final position. If the trade appears to go in my favour, I'll add the other half. In this context, I'll probably add around 13.80/14.00 after the break of the resistance on the hourly chart.
The three screen method
The method I use to analyse my trades is called the "three screen method".
I start by looking at the scale above my regular time frame which is the weekly chart (3 years - weekly) where I highlight notable resistance and support zones and in normal market conditions look for ongoing long-term trends (stock market participants have a "memory", they tend to remember old resistance and support zones).
Then, I switch to my regular time frame, which is, in my case, the daily chart (6 months - daily). Here, I watch the price action and think in terms of "what are other traders doing ?". This is where I plan the trade.
Finally, I switch to the scale below, which is the hourly chart (1 month - hourly). What I look after on this time frame are minor resistance and support levels.
Note on support and resistance
Support and resistance are not numbers or lines on a chart. They define congestion AREAS/ZONES.
***This is not an advice to buy the stock. You should never ever blindly follow a trader's idea without knowing exactly what he talks about.***
Thanks for reading and if you have suggestions or wanna discuss the idea, just leave a comment, I'll be happy to answer.
Trade closed: stop reached:
Got shaken out of the trade and took the loss. Support broken and it will probably continue to drop further. It is very probable that the investigation announce made some traders and investors panic and sell (or short sell) the stock.
Entry around 12.60
Wider stop, below yesterday's low around 11.95
Target remains the same as on the previous trade