The Simple Moving Average (SMA) is a powerful trend-following tool that helps traders identify buy and sell opportunities. In this chart, we use: SMA 20 (Purple Line) → This moving average represents the average price of the last 20 candles. Since it reacts quickly to price changes, it reflects short-term momentum and helps identify early trend shifts. SMA 100...
The Head & Shoulders pattern is a classic bearish reversal formation that signals a potential trend change from bullish to bearish. It consists of three peaks: Left Shoulder: A rise followed by a decline. Head: A higher peak forming the highest point of the pattern. Right Shoulder: A lower peak, similar in height to the left shoulder. Neckline: A support level...
The Supertrend Indicator is a widely used tool among traders to identify the prevailing trend and generate buy/sell signals based on market momentum. It works by calculating a dynamic support and resistance level using the Average True Range (ATR) to adjust for market volatility. The indicator plots a line above or below the price, acting as a trailing...
In this chart, we can observe how price action follows a structured pattern of trends, reversals, and breakouts. The market moves in cycles, creating bearish and bullish trends that traders can capitalize on by identifying key areas of support and resistance. At the beginning of the chart, we see a bearish trend, characterized by lower highs (LHs) and lower lows...
Bollinger Bands are a technical indicator used to measure market volatility and identify overbought or oversold conditions. They consist of three bands: - Middle Band – A 20-period Simple Moving Average (SMA). - Upper Band – SMA + 2 standard deviations (indicates overbought). - Lower Band – SMA - 2 standard deviations (indicates oversold). Key Strategies: -...