Example of creating a trading strategy chart
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To interpret the chart from a trend perspective, you can use the MS-Signal indicator.
The MS-Signal indicator consists of the M-Signal indicator and the S-Signal indicator.
Therefore, you can analyze the chart by checking the arrangement of the M-Signal indicator and the movement around it.
The most important thing in chart analysis is support and resistance points.
Therefore, if you do not indicate support and resistance points, it can be said that the chart analysis cannot be used for trading.
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So, Fibonacci retracement and trend-based Fibonacci extension are widely used in chart analysis.
I used the Trend-Based Fib Extension tool.
I selected and displayed the low and high points pointed by the fingers.
The selection of the candles pointed by the fingers corresponds to the inflection points of the StochRSI indicator.
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If you connect these, you get a trend line.
The important thing when drawing a trend line is to connect the high points of the StochRSI indicator by connecting the opening prices of the falling candles.
When connecting the low points, you can connect the low points regardless of whether it is a falling candle or an rising candle.
This is because I think it best expresses the trend and volatility period based on my experience using it.
When drawing the Fibonacci ratio and when drawing the trend line, the selection points are different, so you should draw it with this in mind.
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If it is drawn as above, you can see that the chart is ready to be analyzed.
Since the channeling most commonly used in chart analysis has been formed, I think chart analysis will not be difficult.
However, the above method is a drawing for chart analysis, so it is not suitable for trading.
This is an important point.
If you are good at chart analysis, but wonder why you lose money when trading, you should change the drawing of support and resistance points.
Do not trade with Fibonacci ratios, but mark support and resistance points according to the candle arrangement on the 1M, 1W, and 1D charts and create a trading strategy according to their importance.
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The chart above shows the support and resistance points drawn on the 1M, 1W, and 1D charts.
To display this, we used the HA-High, HA-Low, OBV 0, OBV Up, OBV Down, BW (100), Mid (50), BW (0) indicators.
To display the exact volatility period, we also need to draw a trend line on the 1M, 1W chart.
The indicators that are important for support and resistance points are HA-Low, HA-High, BW (100), BW (0).
Therefore, the point where the trend line intersects this point is likely to correspond to the volatility period.
It is not accurate because it is displayed only with the trend line that was created right away, but I think it explains well how to display the volatility period.
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If you display the volatility period like this and hide all indicators, you will have a complete chart that can be used for trading.
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Have a good time.
Thank you.
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Note
#AVAXUSDT.P 1D
Considering the support and resistance points and trend lines drawn on the 1M, 1W, and 1D charts, let's estimate the volatility period:
- Around October 24-27,
- Around November 8,
- Around November 18,
The above periods correspond to the volatility period.
If we show the volatility period and hide the trend line, it would be as follows:
Note
There are some things to keep in mind when drawing a trend line using the inflection points of the StochRSI indicator.
When connecting the highs, if the candlestick of the inflection point A of the StochRSI indicator is a rising candlestick, you can draw a trend line using the opening price of the first falling candlestick while moving to the right.
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The 1st and 2nd inflection points can be seen as the StochRSI indicator falling from the overbought zone and touching the StochRSI EMA, separating.
Therefore, you can draw a trend line by connecting the highs of the 1st and 2nd inflection points.
The 2nd and 3rd inflection points cannot be considered separated because the StochRSI indicator did not fall below the overbought zone.
Therefore, there is no need to draw a trend line by connecting the 2nd and 3rd inflection points.
You can draw a trend line between high points by connecting the 3rd and 4th inflection points.
When the StochRSI indicator draws a horizontal line at the 0 or 100 point, you can use it by distinguishing when it touches the 0 or 100 point and when it deviates from the 0 or 100 point.
It is recommended to draw based on the above content.
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