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Support and Resistance

How to Develop a Short Trade using Top-Down AnalysisGood morning traders! Today we want to show you a practical case of how to apply multiple timeframes for the complete development of a trade. In this case it is BMY stock, and it is a trade that we ourselves will take if what we are expecting happens. 🔸What can we find in this chart? - First, what we can see is that in the 4H timeframe, the price has been moving in a range of 15-20% since May. - A few days ago, the price faced the resistance zone that is around $64-66. We consider it a resistance zone since every time the price reaches that level, it encounters a strong supply, which generates its subsequent downward movement. - Based on this, we decided that once a clear rejection was given, we would look for an opportunity to take a short trade. 🔸Descending to the 15Min chart, we see that after the rejection in the Resistance zone, the price generates a breakout of the Ascending Trendline. - Added to this behavior, the Support zone is penetrated strongly to the downside, and then the price consolidates forming a corrective structure in a pullback to the Resistance zone (previous support). - This is our opportunity to look for a short trade. - The corrective structure offers us a correct and safe R/R ratio. - The point where we will look for the entry of the trade will be in the breakout of the local low, with a stop loss behind the structure and the resistance zone. - And finally, the maximum target of the movement is the uptrend line.
NYSE:BMYEducation
by ThinkingAntsOk
How should we trade a Pennant Pattern? Real ExampleToday we have another Academy Post. In this article, we will explain the way we trade pennant patterns on a real setup. FIRST STEP: Understand the context -In this case, we have the price inside an ascending channel (that provide us a bullish direction) -The price is at All-time Highs ( Next Resistance zone, the upper trendline of the channel) -The price is above a previous Resistance zone (we can deduce Strenght of the price) SECOND STEP: Creating a Setup -Now that we have a clear idea about the bullish potential and free path towards the next resistance zone (upper trendline of the channel), we need to develop a setup -First of all, we need a valid Structure. In this case, a pennant structure to be valid needs an ABCDE formation; the reason is that if we wait for those 5 Waves, we can have a clear idea of the breakout level (The lower and Higher trendline have been tested multiple times, based on that we can set our orders with confidence) - A setup is composed of 4 items a) Entry Level: Above B (check the pennant theory) b) Stop level: Below C c) Take Profit level: On the 2nd Fibo Extension or in the next resistance zone d) Break-Even level: First Fibo Extension. -Only trade if your Risk Reward ratio is above 1.5 ( that means that for every dollar you are risking, you expect to make 1.5) THIRD STEP: Define your Risk and Follow your rules. -Only use 1% of your capital on any given trade. That way, you will protect the most important thing as a trader. Your money and your mind -Follow your rules: The reason you want to have a clear Stop, Take profit, entry, and Break-Even is to act only if the price reaches one of those. otherways, DO NOT TOUCH ANYTHING -Accept that Stop losses are part of any system: You don't need "90% accuracy"; you need to be right half of the time and a risk-reward ratio above 1.5 to be profitable. Trade Safe, Thanks for reading!
NASDAQ:GOOGLEducation
by ThinkingAntsOk
BITCOIN Minimum Target: $36000 - Full ExplanationGood morning traders! We hope you are having a beautiful day. 🔸Today we want to show you our vision of bitcoin in the short-medium term and explain why we see it extremely bullish. - Speaking a bit of the context and history, we can see that bitcoin hits all-time highs in late 2017, reaching almost $20,000. After this, there came an abrupt decline that found its lows around $ 3000. From there, the upward movement has been resumed. - During this year, this crypto has made almost a 200% bullish movement. - Analyzing the behavior of the chart, we see that it has potential to be a Cup and Handle movement pattern. 🔸Now we go with a little of theory: - The cup and handle pattern implies a movement in the price that makes a high, a decline correcting movement, a consolidation at lows, and then the subsequent upward recovery. You can clearly see the transition from lower lows and highs to higher lows and highs. After this, it needs a retest of the previous highs (double top pattern), and for a bullish corrective move. 🔸Now, does this imply that bitcoin is going to breakout and make an explosive bullish move imminently? - We do not know, but according to the characteristics of this pattern, no. - What we should expect is a retest of the Resistance zone (all-time highs), and then a corrective move (flag, triangle, pennant, etc.). Once formed, the idea is to trade the breakout. - The MINIMUM target of the movement is calculated by measuring the distance between the minimum of the range and the maximum. - This calculation gives us a distance of $16500-$16600, which, projecting it upwards, gives us an approximate target of $36000.
BITSTAMP:BTCUSDEducation
by ThinkingAntsOk
3
Pulse of an Asset via Fibonacci: Ether at minor Impulse Redux"Impulse" is a surge that creates "Ripples", like a pebble into water. "Impulse Redux" is returning of wave to the original source of energy. "Impulse Core" is the zone of maximum energy, in the Golden Pocket. Are the sellers still there? Enough to absorb the buying power? Reaction at Impulse is worth observing closely to gauge energy. Rejection is expected on at least first approach if not several. Part of my ongoing series to collect examples of my Methodology : (click links below) Chapter 1: Introduction and numerous Examples Chapter 2: Detailed views and Wave Analysis Chapter 3: The Dreaded 9.618: Murderer of Moves Chapter 4: Impulse Redux: Return to Birth place <= Current Example Chapter 5: Golden Growth: Parabolic Expansions Chapter 6: Give me a ping Vasili: one Ping only . . Ordered Chaos every Wave is born from Impulse, like a Pebble into Water. every Pebble bears its own Ripples, gilded of Ratio Golden. every Ripple behaves as its forerunner, setting the Pulse. each line Gains its Gravity . each line Tried and Tested. each line Poised to Reflect. every Asset Class behaves this way. every Time Frame displays its ripples. every Brain Chord rings these rhythms. He who Understands will be Humble. He who Grasps will observe the Order. He who Ignores will behold only Chaos. Ordered Chaos . . . want to Learn a little More? can you Spend a few Moments? click the Links under Related.
COINBASE:ETHUSDEducation
by EuroMotif
3
How to use Corrective Structures to develop a SetupGreat day to learn something, today; we will understand how to use corrective structures to develop a setup on any chart. a) There are 3 types of Corrective Structures, Zig-Zag (first example), Flat (Second Example), Triangles (third example). Use them as an archetype to spot them on a chart. b) Now that you understand the types of corrective structures is time to look at one on the chart ( you can see a Flag Pattern on the real chart) c) Should I trade all the corrective structures I see? NO, YOU DONT! You need Context. Your corrective structure must be well-positioned on the chart, it can be a Trendline, or it can be a Support. Never trade isolated patterns. d) Then you need a clear path in the direction you are expecting. In this case, we are at All-time Highs, so we don't have any Resistance e) How can I calculate my target? Use Fibonacci Extensions. Draw it from the base of the impulse towards its top (where the corrective structure starts) and then take it back to the impulse's bottom. Pay attention to 2 levels only 1.27 for Break Even, and 1.618 for Target f) Only take setups with a risk-reward ratio higher than 1.5 Have a Great Day!!!
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NYSE:CRMEducation
by ThinkingAntsOk
28
Pulse of an Asset via Fibonacci: DNT nearing an Impulse Redux"Impulse" is a surge that creates "Ripples", like a pebble into water. "Impulse Redux" is returning of wave to the original source of energy. "Impulse Core" is the zone of maximum energy, in the Golden Pocket. Are the sellers still there? Enough to absorb the buying power? Reaction at Impulse is worth observing closely to gauge energy. Rejection is expected on at least first approach if not several. Part of my ongoing series to collect examples of my Methodology : (click links below) Chapter 1: Introduction and numerous Examples Chapter 2: Detailed views and Wave Analysis Chapter 3: The Dreaded 9.618: Murderer of Moves Chapter 4: Impulse Redux: Return to Birth place <= Current Example Chapter 5: Golden Growth: Parabolic Expansions Chapter 6: Give me a ping Vasili: one Ping only . . Ordered Chaos every Wave is born from Impulse, like a Pebble into Water. every Pebble bears its own Ripples, gilded of Ratio Golden. every Ripple behaves as its forerunner, setting the Pulse. each line Gains its Gravity . each line Tried and Tested. each line Poised to Reflect. every Asset Class behaves this way. every Time Frame displays its ripples. every Brain Chord rings these rhythms. He who Understands will be Humble. He who Grasps will observe the Order. He who Ignores will behold only Chaos. Ordered Chaos . . . want to Learn a little More? can you Spend a few Moments? click the Links under Related.
DEducation
by EuroMotif
How to Trade the Breakout of a Range 101In this post, we will learn how to trade the breakout of a clear range. Let's start learning. a) First of all, we need a clear Range ( we can say that is clear when we have a support and a resistance level and the price in between for a considerable amount of time) b) From a technical perspective, the expected movement after a range is broken is the extension of it in the broken direction (green arrow) c) Also, we will see how that projected movement fits in the context of the chart. In this case, we will look for the next resistance zone. d) The correct way of identifying a resistance zone is by looking for clear reversal movements in the past. Ignore small corrections. Look for reversal movement and define it with a horizontal line ( in this case, we used 2 yellow arcs to show the idea) e) Now you can see two things. 1) The projected distance of the range is very similar to the distance towards the next resistance zone 2) You have good space to try to catch a wave f) But how can I trade a situation like this? You need a CONFIRMATION. In this case, we always wait for corrective structures (remember that corrective structures can be Flat, Zig Zag, Triangles, or Irregulars) g) Wait for a clear corrective structure on the Edge of the broken Range. IF that happens, you need to define its edges, and from now, it's straightforward. (You can also look for a corrective structure on a lower timeframe; for example, if you define the range on the 4HS chart, you can change your timeframe to the 1H chart.) h) Open positions on the Breakout of the structure, Set stop loss below the structure, Set take profit on the next resistance zone, Define the risk you will take on the trade i) Use this as an archetype on how to trade this type of structure. Have a great day!
NYSE:GEEducation
by ThinkingAntsOk
Top down trading triad 09 NOV 2020 (reference)Visualization of 3 areas of chart analysis. Its makes it easier to break down the individual skill sets required to maximize success. This is just one way to break things down. You may break this down differently so this is just another way to view this if having issues. Regardless of the indicators you use, looking at the market from these three angles may help you employ your preferred indicators more accurately. Breaking things down like this may also help your targeting. Sources of education: Richard Wyckoff Tom Williams Volume spread analysis VSA/ Master the Markets Pete Faders VSA* Read the ticker dot com Wyckoff analytics Dee Nixon Avoid buying into weakness/supply/resistance Avoid selling into strength/demand/support Avoid entry when price is in middle of a range (phase B)
Education
by dee718
Divergence in BTCUSDPrice while approaches its resistance level, is forming a divergence with MACD. Price is creating higher highs and MACD is forming lower highs. That means BTCUSD is losing its momentum. On the other hand there are confluence of sell orders in that resistance level. Therefore it probably can't break that level and goes down. But that's not enough for us. we need to catch a strong down move. What if it didn't breaks that level, but create a trading range around that resistance level? We do NOT want that. So we need evidence that shows us the price had reverse its move and is forming a downtrend. That evidence is our TRIGGER. The trigger could be break of a trend line, a candlestick pattern, or anything that shows we're entering a downtrend move. I used breakout of a trend line here. And for take profit, I used an 20 EMA as a trailing stop loss. Thanks for reading. Write your opinion in the comments.
BITSTAMP:BTCUSDEducation
by Trading-with-Ali
2
[EDUCATIONAL] BULL Flag on ETH/USD - Full ExplanationIn this technical analysis we are reviewing the price action on Ethereum. The confirmed bull flag is a very powerful signal and I will be explaining how you can trade it. Both flags and Pennants are quite similar to each other and have proven to be powerful chart patterns in technical analysis. They are considered 'continuation patterns'. First of all it is important to understand where the name is coming from. If you look at the picture to the left you should get a pretty good idea. The price goes up strongly (in case of a bullish pattern, downwards for bearish) and then enters a moment of soft consolidation with a slight bearish trend (or in case of a bear flag it should be bullish, you get the point). The price is expected to continue in the direction of the move it had seen before (in this case the strong upwards momentum) after it breaks out of the flag. Ethereum has JUST confirmed the breakout on the bull flag, which should indicate a bullish continuation according to this pattern. Follow me for consistent high quality updates, with clear explanations and charts. Please like this post to support me. - Trading Guru -------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only!
BITSTAMP:ETHUSDEducation
by Trading-Guru
11
Methods 2: Retracement Levels 1This is the first installment in my second section on Methods I use for finding Support and Resistance. I use a live trade example on FOREXCOM:EURAUD to show how the simple 50% Fibonacci level was all that was needed to find where the price would inflect. While I am aware and have studied the Fibonacci levels I find that just drawing 50% levels is all I need to find good trade entries and targets. Hope all can learn from my small mistake and look forward to sharing more! The script I wrote for to quickly identify these 50% levels are in the Link below.
Education
by norok
Waiting to Enter on a Channel BreakHello my friend | Welcome Back. Please support this idea with LIKE if you find it useful. *** * Once I have this structure in place, finding the trend becomes relatively easy. When the pair is trending lower, I only want to look for selling opportunities. Of course, the opposite is true when the pair begins trending higher. Enter in the Direction of the Trend At this point, you have identified the major trend and found a favorable corrective pattern such as a channel or a wedge. The next step is to look for an entry once price breaks the pattern.
BITSTAMP:BTCUSDEducation
by Saeed966
6
Ascending Triangle Definition and TacticsHello my friend | Welcome Back. Please support this idea with LIKE if you find it useful. *** * The trendlines of a triangle need to run along at least two swing highs and two swing lows. * Ascending triangles are considered a continuation pattern, as the price will typically breakout of the triangle in the price direction prevailing before the triangle. Although, this won't always occur. A breakout in any direction is noteworthy. * A long trade is taken if the price breaks above the top of the pattern. * A short trade is taken if the price breaks below the lower trendline. * A stop loss is typically placed just outside the pattern on the opposite side from the breakout. * A profit target is calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point. Thank you
Education
by Saeed966
5
BTCUSDT candle wicks, volume expansion at supportBTC can be surreptitious in its volume. The good thing is that when you hav large volume spikes in BTC at your target it tends to play out. Just a simple example of volume increasing as price nears support. Schematic to the right to help. Large wick at the bottom of a candle with low volume means? Large wick at the bottom of a candle with high volume means? Accurate Candle/volume interpretation will make you a profitable trader. Its actually very easy.
Education
by dee718