XRP
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Breakdown of Chart Analysis using trend line and price action

Sorry guys, I know there is a video function available and it would be much easier if I could use it but too bad, my laptop is not able to do it for now. But I promise to get it fixed asap.

Some followers have been asking me how do I do my analysis and read the charts. So I decide to do this as simple as I could , literally putting the thoughts in my head to share with you guys.

Trust me, you can get charged for a few thousands dollars by some gurus in the market that run seminars or online promising you to make xxx amount a day ,etc for what I am sharing here. No doubt there are some good ones out there but chart reading ain't rocket science, it isn't the plotting of chart that is hard. The hard part is managing yourself, the psychology of trading.

You would discover many do not talk much about this part but choose to focus on indicators, elliot waves count and what have you in the market kind. Are they any good ? Like my wife used to ask me, what is my recipe in the fried chicken I made for the kids? Always the same - sesame oil and pepper, that's it, nothing more , nothing less. They give me a 10/10 thumbs up, haha.

The same for trading, if you like TA more than FA, that is. It is a skill that can be acquired over time but the emotional aspect, man, you gotta do some serious work on it coz nobody can help you but yourself. That for another topic, another day ,ya ?

So, here we go :

1. First you draw the orange diagonal trend line - this tells you that price action has ended the bearish trend as it has broken out on 28 Nov 19.

2. Next, draw a horizontal blue line on 29 Nov and 8 Dec candles , here you can find there is resistance met by the candles.

3. Do the same for the support at 27 Nov and 5 Dec as well. Yes, you get a false breakdown on 4 Dec, that is ok.

4. Now, you look at the current price. There are more than 10 consecutive red candles falling since 9 Dec when it touches the resistance level. So how do you know where the price would go next ? Not through guessing but based on historical chart pattern. Look left and you would see some support at 0.21893. So simply draw a horizontal line across.

Then you ask yourself, what happened if the price touches this and breakdown further? where would it go? Again,look left. The answer is 0.21248 as the next support level.

5. Once you have these information, ask yourself, do you want to buy or sell ?If buy, at what level should you enter ? The answers is in 4 above, the two support level. This also tells you to average down and not go all in at the first support level should the price breaks down some more.

6. Is it possible that price goes opposite of the arrows I indicated ? of course,this is based on probability , not guarantee so YES. Where can it go down the furthest ? See the candle on 25 Nov where it says, 0.200? Again, this may not be the bottom and price can further pierce through that, nobody can tells you for sure.

7. Decision - once you decided to take this trade, initiate a small position to test out the market. you can do 1% per trade as well, no need to follow the books of 2% per trade. That way, if market turns against you, you feel less emotionally painful and move on faster.

8. With these trend lines, it gives you a much clearer picture of what to do and where to enter, place your SL ,take profits, etc.

So , the next time you get impulsive and wants to react to the market by hearsay or seeing what your friends are making and jump in blindly , I hope this tutorial in some way offers you a bigger and step by step guide of placing your trade.

For some, they pick up these steps in a minute , others take a while longer. Like I said, the charting skills is not difficult , you just need to practise and practise. But not just on a demo account , you gotta move on to a live trading account. It does not matter if you win cents or dollars of profits initially, getting the trade system right is key. Drill it , grill it till you feel it in your vein.

May the force be with you. Trade safely and happily.
Chart PatternsTrend Analysis

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