Support and resistance are points on a chart where the probabilities favor at least a temporary halt in the prevailing trend.
Support is experienced when demand concentrates around a zone as price is in a downtrend and price finds it difficult to break below that zone. This is because traders have placed a high number of buy orders at the zone, preventing prices...
A market chart has two axes, the x-axis and they-axis. Where the x-axis registers the date, the y-axis registers the price. The y-axis has two methods for plotting it: an arithmetic scale or logarithmic scale. Whichever you chose will have implications for your trading.
Arithmetic scale: On an arithmetic scaled chart, the spacing between price levels is equal....
Using swing points i.e swing highs and swing lows, to identify trends is one of the most basic techniques of technical analysis. This is also the building block for identifying price patterns and part of having high probability setups.
Swing points are the maximum or minimum points on a trend or range. A swing high identifies the rising price extreme while a...
Intraday data is based on time frames from the 4 hours and below. For these time frames, the short-term trend in the daily charts will be seen as the long-term trend in the intraday time frames.
For those who are keen to trade intraday time frames, they need to know that patterns on these time frames or charts have three principal differences from their...
It is interesting to study trends and how they interact because the price level of any security is influenced simultaneously by different trends.
Hence, why we need to note some application of trend classifications as it applies to trend interactions.
1. When we see any specific price pattern, our first question should be: Which type of trend is being...
In an earlier note, we defined a trend as a period in which price moves in an irregular but persistent direction. It could also be a time measurement of the direction in price levels.
The three common classifications of trends are: primary, intermediate and short-term trends.
Primary trends: This trend revolves around the business cycle which lasts for 3.6...
Because human psychology is more or less constant, that means the principles of technical analysis can be applied to any time frame be it 5 minutes to daily or monthly time frames. The only difference between time frames is that the battle between buyers and sellers is much larger and pronounced on the higher time frames than on the intraday time frames....
We have said before that changing attitudes determine price and price moves in trends that tend to perpetuate. So, how can a trend be defined?
Simply, it is the movement of price in an irregular but persistent direction. When you zoom out your chart and watch price movement, whatever is obvious is the trend. The USDZAR chart below illustrates some trends you will...
Technical analysis has been defined as the art of identifying a trend reversal at a relatively early stage and riding on that trend until the weight of evidence shows or proves that the trend has reversed.
This definition has influenced my choice of strategies and why I chose price patterns to trade the forex market.
Here is how I do it according to the...
Price patterns are patterns that were made by price based on the relationship between time and the movement of price on a price chart. They could be based on a single bar or candlestick, two or more, or even several bars or candlesticks. For now, I would be using just bars. They could be just for one session based on the timeframe or several sessions or days. The...
----------------------------------Support And Resistance – The House!----------------------------------
Support and Resistance explanation:
Imagine that you are looking at a vertical cross-section of an "Old fashioned dolls house " which is shown in the schematic. Now you can see all the floors and ceilings in the house, and as you can see here we have a...
Lesson 7 Trade Outcome is Random
The outcome of any given trade is random, no matter how strong your edge is. It is impossible to predict whether a trade will result in a loss, decent profit, or a windfall profit. Contrary to what most Price Action traders and price analysts believe, you cannot and will never be able to predict the market. Most amateur...
Lesson 7 Trade Outcome is Random
The outcome of any given trade is random, no matter how strong your edge is. It is impossible to predict whether a trade will result in a loss, decent profit, or a windfall profit. Contrary to what most Price Action traders and price analysts believe, you cannot and will never be able to predict the market. Most amateur...
The Judas swing term was named by ICT, he dubbed this swing concept and utilizes it upon the London Open. The idea is, the market makers will rally or sell price, normally just above or below the Asian session high or low (depending on institutional order flow bias) tricking buyers or sellers into the market to follow its direction. As the Judas swing high or low...
Weakness = Up moves on decreasing volume & Down moves on increasing volume
Strength = Up moves on increasing volume & Down moves on decreasing volume
I usually try to take a look at the general background and get a feel on how weak or strong the currency pair is. When I have determined strength or weakness I will try to mark up confluent zones where sellers (if...
Trading the "Now moment"
Most of the time, prices do what they have been doing or normally do based on the current context. But what about when they dont, or instead do the opposite? For instance a strong bear breakout of a bull channel. Five minutes ago prices were rallying higher and higher, with no end in sight. Now prices are falling dramatically, what is...
This is a post focus in reading the price action in terms of how is the dynamic of the buyers and sellers, and how an appropriate reading of the overall context (in this case the up trend channel) in conjuction with price signals like fail break outs and price structure (In this case Higher Lows) can provide an idea of potential trading areas where the trader can...
There are so many reasons why 90% of retail traders fail. One of the main reasons is because retail traders over trade. They fear missing an opportunity and because of this they think there is always an opportunity when in reality there isn't. As traders, it is our job to find high probable setups. Probable setups are limited though... so you need to have...
