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Catching a Falling Knife with AMD on the 30 minute chartBetting on a price increase after a sharp price decrease is called "catching a falling knife". In fact, you may have heard someone say, "don't try to catch a falling knife." The analogy is meant to sound dangerous because it is very risky to buy a stock that is dropping rapidly. The hope is that if you time it right, you will get in at the bottom and make big profits. The opposite is true as well, but catching a knife thrown upward sounds like an even worse idea. I would like to suggest that it's possible to profit from a knife-catching strategy if you manage your risk and timing properly. In the chart for AMD, I've marked the opportunities to catch a falling (or rising) knife, which have been occurring on a daily basis for the past week. For AMD, a price bottom has typically been forming after the price has dropped significantly over the previous day. And a top has formed after the price has risen significantly over the previous day. Sometimes it's not clear if a bottom or top has formed such as on October 25. In that case, it's a coin flip (50% chance of being right). The key to success in this strategy is to set a tight stop loss and to buy or sell short during the pre-market (yellow-shaded area). There were at least 6 excellent opportunities last week to do this. Unfortunately, I wasn't paying attention to AMD until the morning of Friday, October 28. I saw the opportunity and realized that there was no way my order would have a chance to go through when the market opened if the price was making a dramatic move. I bought a half hour before the market opened (9:00 AM Eastern) and set my stop loss below the low reached post-market the previous day. Once the market opened, the price was already climbing and I got out before 10:00 AM Eastern. My risk-reward ratio was 1:5. That is, I risked 1 dollar for every 5 dollars I profited. Not too shabby. It appears that Monday is going to be another great opportunity, and I will be watching the pre-market closely. I will be setting a stop loss at 62.30 and a take profit of around 59.50. Although I will be watching for the right time to get out, which is usually when the price reverses, and I chicken out as I did on the 28th. Monday's trade will be going against the larger trend which I believe is heading to 73 by the end of November. See the link to my longer-term analysis of AMD. This is not a 100% fool-proof strategy, and the conditions that make this look easy can change completely and without notice. Also, the volatility can stop you out too soon. Take a look at October 22 for an example of where I would have been stopped out and lost out on the subsequent big move. Disclaimer: I am not a financial advisor, and the above statements are not investment advice. My comments are only intended for educational purposes. You are solely responsible for your own trading decisions. I'd like to add that developing these analyses is a powerful educational tool for the one doing the analysis (namely me). It helps me formulate my thoughts and plan my trades so that I can make the best decisions possible. I'm training my brain to eventually do this automatically when I glance at a chart. It's a skill that I hope will benefit me for the rest of my life. I hope you enjoyed reading as much as I did writing. Give some thought to publishing your own ideas. I highly recommend it. Have a profitable week!
NASDAQ:AMD
by cdnbuzzard
Market Structure Identification ✅Hello traders! ✅ MARKET STRUCUTURE . Today we will talk about market structure in the financial markets, market structure is basically the understading where the institutional traders/investors are positioned are they short or long on certain financial asset, it is very important to be positioned your trading opportunities with the trend as the saying says trend is your friend follow the trend when you are taking trades that are alligned with the strucutre you have a better probability of them closing in profit. ✅ Types of Market Structure Bearish Market Structure - institutions are positioned LONG, look only to enter long/buy trades, we are spotingt the bullish market strucutre if price is making higher highs (hh) and higher lows (hl) Bullish Market Structure - institutions are positioned SHORT, look only to enter short/sell trades, we are spoting the bearish market strucutre when price is making lower highs (lh) and lower lows (ll) Range Market Structure - the volumes on short/long trades are equall instiutions dont have a clear direction we are spoting this strucutre if we see price making equal highs and equal lows and is accumulating . I hope I was clear enough so you can understand this very important trading concept, remember its not in the number its in the quality of the trades and to have a better quality try to allign every trading idea with the actual strucutre
Education
by Snick3rSD
DXY - Rejection Zones!Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. DXY is overall bullish trading inside the rising broadening wedge in brown, and it is now approaching the lower brown trendline acting as a non-horizontal support zone . Moreover, the zone 109.0 is a strong support zone. So the highlighted purple circle is a strong area to look for buy setups as it is the intersection of the green support zone and lower brown trendline. (acting as non-horizontal support) As per my trading style: As DXY approaches the lower purple circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...) In parallel, as DXY approaches the upper purple zone and blue resistance 113-114 I will be looking for bearish reversal setups. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
TVC:DXY
by TheSignalyst
2
20 reason for buy gold update 01/08/2022 1 Structure 12: bullish 2 imbalances: filled 3 Current Move impulse 4 Entry TF: h1 4.1 ETF Structure: bullish 4.2 move: bullish 5 Support resistance support at the h4 order block 6 FIB: trigger event Occurred 7-candle Pattern: spinning top 8 Chart Pattern: double bottom 9 Volume: Execution 10 Momentum: support at 40 measure by rsi 11 Volatility: lower band support Bollinger bands 12 strength: Adx sideways 13 Sentiment: buy 14 Final conclusion: buy at the point 15 Buy /Sell/Wait: buy 16 Entry: right now 17 Stop lose: 1637 18 Take profit: 1690 19 Risk to reward Ratio: 1:5 Excepted Duration: 2 days
OANDA:XAUUSDLong
by Optimum369
Probability of Rally Failure is 90% There is an important study, that estimates the success of a Follow Through Days depending on how close a Distribution Day is observed. Look at the annotated chart on SPX. In essence if we observe Distribution Days close to the FTD then the probability of Failure is high. (Failure is defined by undercut of the Day 1 Rally Day ). Study is courtesy of IBD Research. I have annotated the zones in Red, Yellow and Purple below. 🟥 Red Zone - Distribution Day 1-2 days after FTD: 95% Failure Rate 🟨 Yellow Zone - Distribution Day 3 days after FTD: 90% Failure Rate 🟪 Purple Zone - Distribution Day 4-5 days after FTD: 30% Failure Rate We observed first Distribution on Day 3 and another one yesterday on Day 4 (white bars on chart) - this is why I have labeled all my trades as High Risk - since, I wanted to see how we are to perform first week after FTD.
SP:SPXShort
by TintinTrading
4
BIRLA CORP ANALYSIS!!i have determined the trend and great levels for buying and selling the stock. its a bit volatile market for this stock, but one can earn if he/she has a proper determined plan to trade such type of stocks. ANALYSIS: 1. BLACK LINES are the different chart pattern trends. 2. BLUE LINES are the good levels to buy/sell the stock 3. PURPLE LINE is for the shorter swing trade, saying stock trading rs.909 is good to buy till 1160. if breaches, then all the way too 630. 4. ARROW MARKS & THE CIRCLES: everytime the stock broke the 970 level, it gave a very good upside movement, a level to watch out for.
NSE:BIRLACORPNLong
by raghavchoudhary2016
Market Exposure after FTDIBD Market School indicator suggest we have a clear sky to start testing waters. Here is what the methodology has flagged after the recent Rally Day. Annotations 1 = Most recent unbroken Rally Day 2 = Follow Through Day 3 = Confirming Buy signal (named B3) 4 = Additional Follow Through Day + Confirming Buy Signal (B8) 5 = Permitable Market Exposure as per the methodology My approach! I do not have an exposure of 90% currently as 5 suggests. This is only guidence. I am more conservative and rather have taken a few tiny pilot positions. I want to see that the action is confirming. We are reaching the 21EMA on SP500 and hence I expect some stalling here. We also have an important earnings in the recent days, which means that there could be abrupt failure.
SP:SPXLong
by TintinTrading
Market Maker Pattern with Multiple Long / Short TradesIf this Market Maker pattern plays out in symmetry to the left side, which is more visible even on the 5m chart, then there will be several long opportunities and several short opportunities with opportunity to either reverse positions right into the next drop or retrace. There is also a large red candle on the left side, seen on linked chart of 30m timeframe, that was only partially recovered and these red candles typically always get recovered by a corresponding green candle to the right side of the chart. Thatt gives additional strength to the idea that price will return to previous high of the structure to reclain the red candle. And each of these drop and recoveries is a significant percentage move, ranging from 9% to 30% and with 20x leverage that could make for a fairly safe and profitable series of plays. Of course, these patterns don't always play out completely symmetrical, but even if it fulfills a few of the moves or does so in smaller proportion to the moves on the left side, it's still a solid opportunity due to likelihood of move to upside to reclaim red candle and then likelihood of fulfillment of at least approximate fulfillment of the markdown / drop phase of the pattern.
K
by bitcalib
1