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Learn point and figure chartPoint and figure charting is a type of technical analysis that is used to identify trends and potential buying or selling opportunities in a security's price. Unlike traditional bar charts, which display a security's price and volume over a while, point and figure charts only show price movements, disregarding the passage of time. The chart is constructed using a grid, with X's and O's plotted on it. An X is plotted when the security's price increases above a certain level, known as the box size. Conversely, an O is plotted when the price falls below that level. The box size is the minimum price movement required for a new column to be added to the chart. The point and figure chart are read by looking for patterns of X's and O's. A series of consecutive X's indicates an uptrend, while a series of consecutive Os indicates a downtrend. The number of Xs or O's in a column before a new column is added is known as the reversal amount. Support and resistance levels can also be identified by analyzing the chart. Support levels are identified as areas where the price has difficulty falling below, while resistance levels are identified as areas where the price has difficulty rising above. Traders can also use point and figure charts to set price targets and stop-loss levels. The price target is the level at which a trader expects the price to reach and the stop-loss is the level at which a trader exits a trade to limit their losses. In point and figure charting, a double top or double bottom is a chart pattern that is formed when a security's price reaches a high or low level twice and then falls back. This can be a sign of a trend reversal and could indicate a buying or selling opportunity. Another pattern is the triple top and triple bottom, which is similar to the double top and bottom but the security's price reaches the high or low level three times before reversing. It's worth noting that point and figure charting is a discretionary method of technical analysis, and it requires a certain level of experience and knowledge to correctly interpret the chart. It's more commonly used in stock trading, but it can also be applied to other securities such as futures and commodities.
NSE:NIFTYEducation
by pratik2358
Golden Cross GOLDEN CROSS 1. A golden cross occurs when a faster-moving average crosses a slower moving average. 2. Specifically, you need the 50-period and 200-period simple moving averages. 3. Anything other than these two periods and it is not a true golden cross. 4. The golden cross is a powerful trade signal, but this does not mean you should buy every cross of the 50-period moving average and the 200. 5. You will need to bring a higher level of sophistication to the setup, to ensure you are buying into a trade with real opportunity. THE THREE STAGES OF A GOLDEN CROSS 1. As the downtrend in the stock market ends, the short-term 50-day moving average moves below the 200- day moving average. 2. In a crossover, when a stock recovers, the short-term moving average crosses over the long-term moving average. That’s where the term golden cross comes from, when the two average lines cross on a chart. 3. In a crossover, when a stock recovers, the short-term moving average crosses over the long-term moving average. That’s where the term golden cross comes from, when the two average lines cross on a chart. THE THREE STAGES OF A GOLDEN CROSSPROFIT POTENTIAL OF THE GOLDEN CROSS PATTERN A. DEATH CROSS 1. One option is to wait for a cross of the 50 back below the 200 as another selling opportunity. 2. The only issue with this approach is you are likely to give back a sizeable portion of your profits since moving averages are a lagging indicator. B. PRIOR SUPPORT 1. What you can also do is look for areas of resistance overhead which will act as selling opportunities for longs that have been holding the stock for a long period of time. 2. A caveat to this strategy is that the stock may consolidate and push higher. C. TRENDLINE BREAK 1. If the golden cross is real, the signal will likely generate a strong buying opportunity. 2. You can then use the first couple of reactionary lows to create an uptrend line. 3. You then hold the stock until this trendline is broken.
Education
by yaser_rahmati
🌳very important terminologies in Trading🌳Hello every one 🟡(1) Price action The Movement of an asset or Security's price over Time , Plotted on The chart 🟡(2) All-Time High (ATH) The Highest asset has Ever been in Price 🟢(3) Support a Point in the market where the Price is less likely to drop below due to previous demand or price action 🟡(3) Resistance a Point in the market where the Price is less likely to break above due to previous demand or price action 🔵(4) Trend line a line indicating the General Price Direction of a chart 🟡(5) break out when the Price of the asset break through a pre-determined Trendline ⚪(6) Formation when a Financial Chart moves in such a way as to create a Recognizable pattern.patterns to signal trading opportunities either to enter or exit positions. 🟢(7) pump or bullish The price of an asset is going up 🟡(7) Dump or bearish The price of an asset is going Down 🔵(8) Long Position a Regular Buy in The Market. a Trade that is Predicting the asset will go up in value 🟡(8) short Position The opposite of a long Position. Entering a Trade position betting the asset to go down in value.
Education
by CobraVanguard
21
How to filter out the noiseIn this post I will demonstrate one of the techniques that you may use to filter unnecessary noise from the chart. For that purpose we will use Three Line Break charting (invented in Japan) along with a Japanese trend indicator Ichimoku Kinko Hyo. Line break charts were developed in Japan and popularized here by Jewish American author Steve Nison (the man who revolutionized technical analysis by introducing Japanese candlestick charting techniques to Western traders) in his book "Beyond Candlesticks" (2009). In that book, Steve Nison unveils the mysteries of four more of Japan's most closely guarded financial secrets - Kagi, Renko and Three-Line Break charts. Three Line Break charts show a series of vertical green and red lines (bars); the green lines (bars) represent rising prices, while the red lines (bars) portray falling prices. Prices continue in the same direction until a reversal is warranted. A reversal occurs when the closing price exceeds the high or low of the prior two lines (bars). The green and red bars on the price chart are called “lines”. Second, line (bars) changes are based on closing prices, not the high-low range. Third, Three Line Break charts evolve based on price, not time. Each new closing price produces three possibilities: 1 A new line of the same color is drawn when the price extends in the same direction. 2 A new line in the opposite color is drawn when the price change is enough to warrant a reversal. 3 No new lines are added when price does not extend the trend or the change is not enough to warrant a reversal. Good luck! Roman IC Finance
Education
by ICFX
1
Support And Resistance – The House! EICHERMOTOR.----------------------------------Support And Resistance – The House!---------------------------------- Support and Resistance explanation: Imagine that you are looking at a vertical cross-section of an "Old fashioned dolls house " which is shown in the schematic. Now you can see all the floors and ceilings in the house, and as you can see here we have a ground floor, first floor, second floor, and roof. The market then moves lower, having reversed, back to the floor, where it consolidates. The concept of Support and resistance is important for a number of reasons. --> First, as we have already seen, a breakout from a consolidation phase can be validated with volume , and if confirmed, provides excellent trading opportunities . The so-called breakout trade s. It is a WIN/WIN. You have the comfort of knowing that once the market has broken through a ceiling of price resistance, not only does this become a floor of price support, it has also become a barrier of price protection in the event of any short term re-test of this area. Any stop loss, for example, could then be placed in the lower regions of the price congestion. This is why breakout trading is so popular.
NSE:EICHERMOTEducation
by Trade-Technique
71
Big Experiment (part 2). Line Break ChartBITFINEX:BTCUSD Dear friends, I continue my big experiment with different chart types. In the previous training article, I described the advantages and disadvantages of Renko chart. After that, I was testing the signals, sent by Renko, and those, provided by common technical analysis tools, like MACD and moving averages, on different cryptocurrency pairs. I analyze four-hour timeframe in my experiment. Finally, after one week of tests, I can draw the following conclusions: • The quality of Renko signals mostly depends on the right box size. • MACD oscillator is quite good to find out the appropriate box size. You adjust the box size in the selected timeframe until there are as few false signals as possible, or there aren’t any. • As Renko chart hardly indicates the minor sideways price movements, you can reduce the periods of moving averages by a few times, so that their signals won’t be too late. • To filter false signals, sent by Renko, you also need to use candlestick chart at the same time. • A perfect buy/sell entry point is when the signals in the candlestick chart coincide with the Renko signals. An example of a perfect buy position: An example of a perfect sell position. Finally, I can conclude that Renko chart is an excellent instrument that will perfectly supplement any trading system. The drawbacks are the need to adjust the brick size to each timeframe and the time lags in signals, compared to the corresponding ones in the candlestick chart. The next chart type in my experiment will be Line Break Chart. Although it may seem complicated, it is quite simple to apply. It displays only the price moves that break through the last three closing price levels. The default number of Line settings is three, but you can change it just like the Renko box size, in order to make the chart more or less responsive. Unfortunately, I haven’t discovered the way to change the type of the levels displayed. I believe it would far more interesting to see not the closing price lines, but, rather, the highs or lows, because these movements provide the final signal to determine the trend direction. So, I really hope that someone will hear me and develop such an indicator ;)) To make it clearer for you how a Line Break Chart is built, let’s study it on a real example. There are two charts of the weekly timeframe above. The candlestick chart is on the left. The Line Break chart is on the right. I marked the analyzed zone with the green circle. You see, a long bullish candlestick emerged on July 16. It broke through the closing price levels of the three previous candlesticks (I marked close levels by numbers), and so there is a bullish bar in the Line Break chart (green). Besides, the bar’s high coincides not with the high of the Japanese candlestick, but with its closing level. As you see, in this case, the opening level of a bar in the Line Break chart is always the closing price level of the previous bar. The indicator alone sends quite simple signals. 1. A buy signal is when three consecutive bearish bars (down lines) are followed by a bullish one (an up line). 2. A sell signal is when three consecutive bullish bars (up lines) are followed by a bearish one (a down line). Here, I should mention that many Line Break chart users suggest expecting an additional bar in the signal direction, following the reversal bar (breakout). Therefore, if the pattern is not complete, and down lines are alternated with up lines, you’d better avoid trading. As known, Japanese like creating names for their patterns, and this case is no exception. For clarity, I presented the bullish pattern in the Line Break chart. I marked three bearish bars with the red circle, Japanese call it Black Shoes. The bullish bar, following three black shoes, is marked with the yellow circle. It is called Suit. A white suit means to buy, and a black suit means sell. The line in the green circle is the confirming bar, it is called Neck. Japanese say that you are to buy when the market “puts on black shoes and shows the neck in the white suit”, that is the market a kind of puts on a white bullish or a black bearish suit before it moves on)) It is important, how long is the Suit line; if it is not that long, a false breakout is likely to occur. It occurred in the first case, when the Suite was rather short. In the BTCUSD price chart above, I present an example of a sell signal (similar to the bullish one), when the market has put on a black suit. Basically, this pattern has a big flaw; by the time there is the Neck, a half or even the most of the general trend can be over. To reduce the time lag, you can cut the number of break lines. In addition to this, I suggest doing the experiment with the standard indicators, MACD and moving averages. In the Bitcoin/Dollar four-hour char above, you see that the Line Break chart sends the signal a little later. However, if there is the price sideways move (marked with the red circle), the indicator sends many false signals and is not efficient. There, MACD is of help. In case with the Line Break chart, the indicator doesn’t suggest strong volatility and indicates the sentiment rather definitely; it doesn’t feature the same in the Japanese candlestick chart. Summary: The Line (Three-Line) Break Chart is obviously worth studying and can serve as a confirming indicator of the trend reversal. Like Renko chart, Line Break can remove the noise, resulted from minor volatility during short time periods; however, it is likely to send many false during a long sideways trend inside a wide price range. Moreover, I don’t think it is right to analyze the close levels to spot the breakout, as, according to technical analysis, the more important levels during the price breakouts are the highs or lows for previous periods. To study the indicator in more detail, I’m going to test in practice, applied to different trading instruments. I will present the results of my tests, traditionally, the in the next educational post. I wish you good luck and good profits! PS. If you agree with the forecast write “+” in the comments, if you don’t agree, put “-”. If you liked the post, just write thank you, and don’t forget to share the post. It is easy for you and I will be very pleased :)
BITFINEX:BTCUSDEducation
by Hypov
1
Example of a Support and Resistance lines.I want to show with this example how the price in a lateral movement oscillate in ranges between supports and resistances lines. The target is the following, if the price bounces on a resistance, make a short until it reaches the support level. If it bounces on a support, make a long until it reaches the resistance. If the price breaks a resistance, make a long until the next resistance level. If it breaks a support, make a short until the next support level. Sometimes a price level can behave as support and as resistance, this indicates that it is a strong level.
Education
by heco08