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Technical Analysis 101: Support and Resistance In this video I cover the basics of the support and resistance levels and how to chart it out, If you enjoyed this video please like it and share it with your friends. Also please drop a comment, feedback, suggestion for me to cover or just to work on, and that would be much appreciated. Next video I'll cover the Fibonacci retracement and extension to plot targets. So we covered the trend lines and support and resistance levels, so please practice with those and send me charts if you need someone to look over it! As the main goal is for all of us to learn from each other and become better chartist and traders!
NYSE:WMTEducation
by jUiCE_Trades
5
Configuring Your Chart: HLC barsContrary to popular belief, the superior way to view price is not through candlesticks or OHLC bars. Its HLC bars. HLC bars are the superior choice. Why? Good question... The reason HLC bars are better is because I found out that the open price is completely redundant when analyzing the charts. Also the majority of indicators out there don't use the open price. The open price is useless because it doesn't tell you what happened during the bar's life, only how it started, whereas the high, low, and close tell you how price moved during the hlc bar's life. The high, low, and closing prices of a bar are all you will ever need, and they tell you what the sentiment of the bar was. The equation for sentiment: Sentiment = 100 * (Close - Low) / (High - Low) What does this suggest? It suggests that candlestick patterns aren't real! I used to believe in candlestick patterns. They were actually the first thing introduced to me when I started to learn about trading. But now we all know the truth. This is very good news because it simplifies the charts! So next time you look at the charts, view them in HLC bars ;)
Education
by racer8
6
Divergent BarsDivergent bars help a trader identify a potential shift in the current price trend. Divergent bars are an effective technical tool for futures, options, and stock traders using any timeframe. A divergent bar is defined as the following: 1. A potential shift from a bullish trend to a bearish trend is evidenced by the current price bar showing a higher high than the previous bar and the current bar closes in the bottom 50% of the price bar. Also known as a Bearish Divergent Bar . This indicates that bullish movement higher is weakening. 2. A potential shift from a bearish trend to a bullish trend is evidenced by the current price bar showing a lower low than the previous bar and the current bar closes in the upper 50% of the price bar. Also known as a Bullish Divergent Bar . This indicates that bearish movement lower is weakening. To open a position using the divergent bar: 1. When the divergent bar indicates a possible bearish entry , place an order to buy to open a put (for options traders) or sell short (futures traders) at the low of the divergent bar. If the bullish trend is not complete, it is likely this position will not be filled. If, before the order is filled, the price moves above the high of the divergent bar, the bar is no longer valid as an entry signal and open orders should be cancelled. If the order is filled, use your usual profit targets, which will vary by trader. If the position is filled, futures traders should set a stop based on the high of the divergent bar. Options traders should monitor the price action and close the position if price moves above the high of the divergent bar. 2. When the divergent bar indicates a possible bullish entry , place an order to buy to open a call (for options traders) or buy long (futures traders) at the high of the divergent bar. If the bearish trend is not complete, it is likely this position will not be filled. If, before the order is filled, the price moves below the low of the divergent bar, the bar is no longer valid as an entry signal and open orders should be cancelled. If the order is filled, use your usual profit targets, which will vary by trader. If the position is filled, futures traders should set a stop based on the low of the divergent bar. Options traders should monitor the price action and close the position if price moves below the low of the divergent bar. The most effective way to use the divergent bar signal is to view it as one signal aligned with another reliable signal, such as the Bollinger Bands, Awesome Oscillator, or other momentum/trend shift indicator. The signal is so specific that it adds exceptional strength to the likely reversal. For example, on the chart of TVC:SPX , two divergent bars are highlighted, each one anticipating a strong and clear reversal in the swing trend. In the first example, a Bullish Divergent Bar appears at the beginning of October. The low is lower than the previous bar’s low and the current bar closes in the upper half of the price bar. This indicates a potential long entry. It is also paired with a Bollinger Band Snap. The next day stochastic crosses up and the high of the divergent bar is broken, signaling a long entry. The second example occurs in late January with a Bearish Divergent Bar . The high of that bar is higher than the previous bar’s high and it also closes in the lower half of the price bar, signaling a bearish divergent bar. The next market day the low of the divergent bar is broken, the Awesome Oscillator (AO) is red, and stochastics is crossed down. This alignment between divergent bar, AO, and stochastics signals a short entry. In both of these examples there is strong follow through from the divergent bar entry. Moving 35 points immediately to the upside on the bullish divergent bar entry and trending about 100 points lower the days following the bearish divergent bar entry. Divergent bars, when paired with other indicators, can be a reliable indication of a potential shift in the trend.
SP:SPXEducation
by NewCycleTrading
3
Bollinger BandsBollinger Bands Timing for options trades relies on many price signals and confirmation. Even so, knowing when trends are likely to continue or to end is a skill of its own and many traders have timed entry and exit poorly because the trend was misread. One signal helps overcome this problem. Bollinger Bands (BB) track the trend with three bands. The middle band is a simple moving average of 20 sessions, and the upper and lower bands are each two standard deviations of that average. This sets up a great visual, forming a “probability matrix” of both price and trend. Because price is not likely to trade above the upper band or below the lower band for very long, any move outside of this matrix is likely to be followed by a retreat back into range. However, BB is not just a price-specific analytical tool. It also sets up a version of resistance and support as a dynamic factor rather than the traditional straight line. The chart of the Nasdaq 100 Index shows this relationship between the upward-moving trend and resistance. It is possible to draw straight lines to identify resistance or support as well as times of breakout. BB tends to provide a dynamic version, which is more accurate and more predictive. As the price trend is upward-moving, the upper band tends to track resistance with extreme accuracy. And as a trend moves downward, the lower band tends to track support In the NDX chart, three examples of the relationship between the upper band and the dynamic price movement are circled. The most revealing aspect of this is how accurately the band points to both entry and exit. As the price moves close to the upper band, it marks the beginning of a strong bullish move. This is seen in all three of the highlighted examples. These are highly reliable entry points for bullish trades such as long calls or short puts. The bullish trend ends as price moves away from the upper band. This is also seen clearly in all these instances on the chart. Logically, this marks an exit point, but not necessarily the start of a bearish move. Unlike most reversal signals, the move of price away from the upper band signals only the end of the price move. The next phase could be resumption of the trend, retracement, or reversal. To decide, requires a new set of signals. The interaction between the bands and identification of the trend also works when a dynamic trend ends and moves into a period of consolidation. This occurred at the beginning of December. Notice how strongly the band width narrows, going from 600 points in beginning November down to under 250 points. This shrinking band width signals a likely period of consolidation, which serves as a rest between dynamic trends, a plateau before trend resumption or reversal. This also points to the timing for a different type of option trade, which exploits a range-bound tendency in the short term. In fact, consolidation may be the most profitable trend for short-term trading because breakout is easily identified. Look for a widening of the band width to anticipate a new dynamic move. It does not matter whether that will be bullish or bearish; the issue is that a widening band width signals likely end to consolidation. Entering a consolidation-type trade like an Iron Condor (with strikes far outside the band width), a short covered straddle, are well-timed as consolidation begins, but should be closed as consolidation ends. At that point, a new trade can be opened to exploit dynamic price movement, such as synthetic stock (long or short) or simply a long option. The issue to keep in mind in all of these timing decisions is that BB provides more than a reliable tracking device for price. It also marks the nature of short-term trends, whether dynamic or sideways-moving. It is one of the most reliable predictive signals options traders can find.
TVC:NDQEducation
by NewCycleTrading
18
Waves+ signal charting, partial blindExample charting of signals from Waves+ with a partial blind - all horizontal lines/signals were plotted with the candlestick chart hidden. A full blind test with long/short signals plotted before the candlestick chart isn't hidden is in order - I'm fully aware that this potentially isn't realistic with the results on the signals due to them being placed after the fact - and I'm aware of that. This was merely a first step - nothing more. A few of these trades are easily invalid due to the fees being high - without leveraged positions, the profit percentage here is slim. down red arrow = short up green arrow = long green checkmark = position was closed in profit if you closed on that bar red X = trade closed at a loss orange horizontal line = early sell/short signal, or early exit from long signal blue horizontal line = early buy/long signal, or early exit from short signal Charts:
BITFINEX:BTCUSDEducation
by auroagwei
1
Forget Bitcoin and watch this textbook TA!Away from the action on BTC and the S&P500, I'm making big profits on hidden gems, like this UK stock. A classic TA inverse head and shoulders setup! Straight out of the dusty textbooks. Strong volume on the left shoulder and weak volume on the right shoulder, just as it should be. I bought just above the breakout line. The breakout is clean, retests to a perfect level and then takes off like a rocket! Beautiful. (and highly profitable).
PEducation
by GlenGoodman
7
EURUSD [1-3 days view]This trade was triggered earlier this week. However, I chose not to publish it as it was a low probability trade for me at that time for the following reasons: Market was only testing the ascending trendline support (now resistance) Normally I would wait for a pullback to retest the trendline before entering to short Market was also forming a Head & Shoulders reversal pattern however at trade time, it was still not confirmed. I choose to publish this trade now because I believe it presents a very strong case of how a trade can really move in your direction when multiple technical elements show confluence to provide that confirmation despite the low conviction I had. 1. Market was forming a Head & Shoulders reversal pattern 2. Market broke below the ascending trendline support (now resistance). 3. At the same time, market also had one candle close just below the EMA (13). This EMA as noted in the past provided quite a good support/resistance where price reacted above and below it. 4. MACD momentum indicator at trade execution crossed below 0% and entered bearish territory. The MACD and signal line also showed strong downwards momentum. 5. Everytime price broke below an ascending trendline support (turned resistance), market will make a strong and sustained downwards push. This happened at the 2nd week of Jan 2019 and once more at the start of Feb 2019. Now at the start of March 2019, we see this pattern repeated again. This is a quite a beautiful example of how technical analysis can be a very powerful skill to have for any market participant. Reach out to me to find out more!
Education
by laughingchartist
Basic Technical Analysis 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Basic Technical Analysis Interpreting the candlestick This type of chart is an extension of the bar chart and is actively utilised by the investors in China for more than 500 years of time period. It helps in providing the information regarding open, close, low and high in the dimensional format. It can be seen that the vertical axis of the chart helps in providing information on the prices of the FOREX whereas the horizontal axis represents the time period. The green candles are the representation of the advances of the currency and the red candles, on the other hand, represents the decline in the value of the FOREX. Moreover, the body denotes the thick portion of the candle, and the vertical line represents the wick. This chart helps the investor to forecast the future price movement of the FOREX. Charting systems In the mind of a few people, charts are the exemplary image of the trader’s speciality. The experienced eye can make ups and down. Charting is a questionable piece of the fund. Future research is probably going to reveal things about outlining that would amaze people today. All things considered, even individuals who eagerly restrict the training are ought to be acquainted with the essential techniques of charting.
FOREXCOM:XAUUSDEducation
by SMPTrader