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Parallel Channel

HOW-TO : Auto Chart Patterns UltimateHello All, I have made this video which covers briefly on following points for Auto-Chart-Patterns-Ultimate-Trendoscope 1. Indicator components 2. Detailed settings 3. Few key features 4. Info about trading different patterns included I could not cover alerts in the video due to time constraints. But, alerts is same as that of HOW-TO-Customize-Alerts-in-Auto-Harmonic-Scripts Let me know if you have any question. For trial access and subscription please look at the script page - 'Author's Instructions' section.
TVC:RUTEducation
by Trendoscope
9
A refreshing look at technical analysisConventional technical analysis is based on the combination of two methods for predicting price movements: one method attempts to "clear" them of noise in order to track their direction, and the second method attempts to predict changes by detecting obstacles in its path and evaluating the momentum of a current direction. In addition to these two methods, it is common to rely on patterns that are signs of things to come. These are mainly patterns based on Japanese candlestick arrangements that can indicate a trend reversal, such as a head and shoulders pattern, etc. The problem, which is familiar to everyone, is that with any security or currency pair, you can also see shorter periods of decline in a period of rise and vice versa. That is, the price chart has fractal properties (fractal is the name coined by mathematician Benoit B. Mandelbrot in 1975 to describe repeating or similar geometric shapes). Classical or Euclidean geometry fits perfectly into the world that man has created. However, it is less suitable for the structures found in nature. Clouds are not perfect spheres, mountains are not symmetrical cones, and lightning does not travel in a straight line. Nature is not smooth but rough, and until recently it was not possible to measure how much. Mandelbrot developed a mathematical representation of complex patterns that repeat at any scale, and thanks to the invention of the computer, he proved that fractal geometry can represent patterns even under conditions of irregularity in the natural world. In his book: "The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward" he shows that fractal geometry can also represent market movements. The idea can be understood without mathematical knowledge by looking at the course of a river. A river does not flow in a straight line, but in a channel where the resistance to water flow is lowest. The actual length of the river divided by the air distance is defined as the coefficient of curvature, and its average value for rivers in the world is 1.94. The coefficient of curvature is also a special case of the fractal dimension. The curvature coefficient 1 of a straight line is actually one dimension, while the curvature coefficient close to 2 is actually almost two dimensions. In the general case of two- and three-dimensional shapes, the less smooth the contour of a shape, the greater its roughness - its fractal dimension is greater. Mandelbrot claims that the "noise" - the fluctuations of the price around the general trend - is not random ("white" noise) and therefore cannot be suppressed by a moving average that smooths it out while ignoring the fractal properties. Many attempts have been made to find the regularity of market movements using fractal properties. What I do is to form multiple channels: Within the "game board" whose boundaries are defined, I sketch the longest parallel channel, and within that channel I sketch an intermediate parallel channel, and on top of that I sketch the optimal parallel channel for trading in a time frame that provides the best balance between too early and too late, and between too painful fluctuation intervals and insufficient trend lengths.
Education
by roni4ever
Andrew's Pitchfork TradingThe Andrews Median line or Pitchfork is a form of tool that is used to identify potential reversals or continuation of trends. The median line tool is one of the standard charting tools available with most trading/charting platforms. The Andrews pitchfork tool or median line comprises of trend lines that are drawn connecting three price points. Swing high/Swing low/Swing high or Swing low/Swing high/Swing low. The median line comprises of three lines, the median line which dissects the two Swing highs or lows, and the upper and lower median lines. It is the appearance of the median lines which gives it the popular name of Pitchfork. After identifying the swing high/low points, the Median line should be adjusted in order for the median line to make some sense. The chart below shows the pitchfork plotted which is adjusted to the swing high and low points to make sense of the price action. The Andrew’s Pitchfork is based on the concept of Action/Reaction and Newton’s law of “Every action has an equal and opposite reaction”. There are different elements of the Pitchfork tool, they are: Median line, Upper median line, Lower median line, Upper/lower Trigger line & Upper/Lower Warning line Andrew’s Pitchfork Trading Rules: The following is a summary of the Andrews Pitchfork Trading rules. 80% of the time, price reaches the Median line When price reaches the median line, it can either reverse to the upper or lower median line, or cut through the median line Failure to break reach the upper or lower median lines, after the median line is cut through indicates a reversal back to the median line When price reverses before reaching the median line, there is a high probability of price will continue to move in the direction, reaching the upper or lower median line, opposite to the median line When price breaks the upper or lower median line, they are most likely to reach the upper or lower warning lines When price cuts through the upper or lower warning lines, they indicate consolidation or the start of a new trend. Andrews Pitchfork Trading – Conclusion To summarize, the Andrew’s Pitchfork tool is a versatile trading tool that can be used in any market and in any timeframe. It is best when used with other trading systems or method, but can be traded as a standalone tool as well. Trading with Andrew’s pitchfork requires quite a bit of practice and more importantly patience and with good experience the possibility of developing your own custom trading system based on Andrew’s pitchfork tool should be quite simple and rewarding.
Education
by Anbat
Trendline and Channel Tutorial: Part 4All traders are different but I personally find it difficult to use standalone channels to consistently initiate profitable trades against. Not the least of the problem is that the channel continues to either rise or fall, making a secure place to hide a stop above/below more difficult. But I find them particularly useful in three aspects. The first, and by far the most important, is that a channel allows one to quickly visualize the ebb and flow of supply and demand. As described earlier in this series, the relationship of price to the channel boundaries and the median line offer insight to the strength of the underlying trend (increasing or decreasing). The second is in the use of channels to rebalance existing positions against. I find tremendous value in trading around conjunctions with other support/resistance techniques. In other words, zones of support or resistance provided by the confluence of channels, horizonal patterns, fibonocci, momentum, and chart patterns result in more reliable entries than simply trading the width of the channels. In this piece we concentrate on finding suitable trading confluences. Finding a confluence: After the late March 2022 pivot (point A), the initial supply line A-C could be drawn along with a parallel initial projected oversold line from point B. By early August the channel top (supply line) intersected price in the area around 4330. In the Wyckoff perspective, the downtrend represented the stride of supply and represented a significant chart reference. In late May, price exceeded the initial projected oversold line, requiring a redraw from point D. Between early Jan and mid July 2022 SPX declined from 4797 (A) to 3640 (D). The .618% retracement of the entire decline bisects around 4313. From the low (1) on July 14, SPX rallied for 22 trading days. From July 26th an initial demand (uptrend line) could be projected. By the 29th an initial supply line (channel top) could be drawn. These two lines defined the minor channel. By the middle of August, the minor channel intersected with the major channel in the area around 4332. Price was also scraping across the top of the rising Bollinger band and the daily stochastic oscillator had been pinned in overbought since early August. Levels: 4330 - Major channel top 4313 - .618% Fibonacci retracement 4336 - Upper channel (supply) line in the shorter perspective channel. 4332 - Bollinger Band top Stochastic and other momentum indicators pinned in overbought. As price moves into a confluence zone, I typically move to the chart of one lower degree and begin monitoring for a potential trade entry setup. SPX Hourly: In this perspective the channel becomes clearer. It is important to note that after August 8th, price never again approached the supply line and instead hugged the median line (inside the oval). This offered a clear indication of waning demand. On August 11, I moved the supply line (red dashed channel top) lower, providing yet another layer of resistance. Once price moves into a resistance confluence you may use your preferred method of trade entry and stop placement to initiate a trade. Finally, most price action is only noise and there are only a few points on any chart where behavior becomes meaningful. Confluences, channel tops and trend lines represent one of instances. If no confluence exists, move your attention to a different chart. There is always a tradable confluence somewhere. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
SP:SPXEducation
by CMT_Association
17
Trendlines and Channels Tutorial: Part 3Before we get started on trendlines and channels I want to share a quick thought on the current market environment and how, at least in my opinion, the technical environment has changed. I believe that the weight of the evidence suggests that we are in the early to mid-stage of a primary bear market. If that is the case, momentum and sentiment extremes, breadth thrusts, and other conditions that have reliably produced tradable lows over the course of the recently completed primary bull market are far less likely to create meaningful/investable lows. For a low to be trusted for more than a quick trading turn will require multiple techniques and confirmations, while shorts into rallies and interim highs can be sold much more safely than at any time since the 2008 lows. If global central banks, and in particular the Federal Reserve, continue to tighten policy, markets are at significant risk. In particular I believe that QT is the more important driver of asset prices. I don't foresee a pivot anytime soon unless there is a financial accident. Even then, it’s not likely that the pivot will include a long term reversal of policy. If inflation remains high, pivots are likely to pauses in the tightening cycle and not a lasting reversal. Ten Year Yields: For clarity and simplicity I will treat this uptrend in yield as a bull market (although it is actually a bear market as higher yield = lower price). To keep it simple I will label the uptrend in yields as if it were a bull market and use that terminology. The hourly chart of US Ten Year Treasury Yield offers another example of a consistent demand line coupled with a clear supply line. As discussed in parts 1 & 2, trendlines and channel tops evolve over time and are typically messy. Construction: Yields began inflecting higher in very early August (A) and over the next few weeks began making higher highs and higher lows. The first significant low occurred August 10, and soon after, the initial demand line (A-B) could be drawn. This demand line did an excellent job of defining the stride of the trend for the next two months. At that point there was a solid intervening high pivot between the two low pivots that could be used to draw the initial supply line. After the late August pivot, I moved my initial supply line lower. From September 13- 22 the market traded in the upper portion of the channel for an extended period (period in the oval). Downside reactions began consistently holding in the area around the channel median/central line. This is typically a sign of strength. Note that this was the third time during the sequence that price had held in the upper portion of the band for an extended period. Granted, there were two periods where price was below median, but both periods were relatively short and the totality of time spent above median was far greater. This was clearly a market where demand is outstripping supply by quite a lot (remember that since this is yield, we are treating the uptrend as if it were price, so in actuality, holding in the top portion of the channel represented superior supply). Soon after this show of strength, the market pushed above the top of the supply line. Overthrows of this nature are often terminal, ending the trend. Often, breakouts find fresh supply at roughly 1 channel width above the breakout. This one exceeded that modestly. Often (as is the case here) once the original channel is reentered, it will again begin to act as support and resistance. In the next installment we will talk about combining channels with other chart and oscillators and some notes about using channels to trade against. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:US10YEducation
by CMT_Association
17
3 FIBONACCI TOOLS YOU MUST KNOW 💡 Hey traders, In this article, we will discuss 3 classic Fibonacci tools you must know. 1️⃣Fibonacci Retracement Fib.Retracement is my favorite fib.tool. It is aimed to identify strong horizontal support and resistance levels within the impulse leg. We draw this tool based on the high and low of the impulse (from wick to wick) and it shows us POTENTIALLY strong structure levels determined by Fibonacci numbers. Common Fib.Retracement levels are: 0.382, 0.5, 0.618, 0.786. Once one of the levels is reached, wait for a confirmation before you open a trading positions. 2️⃣Fibonacci Extension Fib.Extension indicates strong horizontal support and resistance levels beyond the impulse. Similar to Fib.Retracement tool, Fib.Extension is drawn relying on impulse's high and low (from wick to wick) and it shows POTENTIALLY strong structure levels where the consequent impulses may complete based on Fibonacci number. Common Fib.Extension levels are: 1.272, 1.414, 1.618. Once one of the levels is reached, wait for a confirmation before you open a trading positions. 3️⃣Fibonacci Channel Fib.Channel shows strong vertical supports and resistances (trend lines) within the channel. The tool is drawn based on the trend line of a valid parallel channel (based on wicks) and it shows POTENTIALLY strong trend lines from where the market may retrace. The trend lines within Fib.Channel rest on 0.382, 0.5, 0.618, 0.786 Fib.Levels. Once one of the levels is reached, wait for a confirmation before you open a trading positions. Remember that Fibonacci's are simply tools in a toolbox. In order to use them properly, you need to build a trading system around them, test it and confirm its efficiency. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
Trendline and Channel Tutorial: Part 2In part 2 we discuss how to construct and utilize sloped trendlines (TL) and Channels in order to better understand the ebb and flow of supply and demand. Like most other charting techniques understanding supply and demand and its relationship to trends and channels depends on you staring at hundreds and thousands of bar charts. Unfortunately, there just isn't a shortcut. It's hard work. Uptrends represent the "stride of demand." They are a graphic representation of the willingness of the composite investor to enter new longs at consistently higher prices. The parallel channel top is the overbought or supply line. A point in the trend where the composite investor might be reliably expected to reduce their long positions. The median line represents (roughly) the center of the channel. At times (as in the commodities example) the median line may have a basis in the chart pattern, but more generally is simply scribed roughly in the center of the channel. The median line is useful in gauging supply and demand relative to the channel boundaries. TLs need to be constantly adjusted and often are messy. Most of the time these adjustments occur with a significant lag, but even with the delay the channel helps to define and visualize the aggresiveness or lack thereof of the supply or demand. In the markets that I am most interested in, I constantly adjust the channel elements to best reflect the latest pivots and chart elements. In my analysis I also use volume, Wyckoff principles and other techncial methods to build the viewpoint. TLs and channels are like any other technical pattern in that they are much stronger and more understandable when combined with multiple methods and tactics. These patterns are fractal. They occur in all time perspectives from 1 minute to decades and are generally analyzed in the same manner. Generally Speaking: -The relationship of the market to the demand line and the supply line relate to the aggresiveness of the demand. -Ideally a reaction higher from a demand line should cover the entire distance to the supply line. A failure to push to the overbought line (the channel top) is often a sign that the trend is weakening. -A modest overthrow of a supply line is generally a sign of demand, but if the overthrow occurs late in the trend and represents a significant acceleration, there is potential that it is terminal (see the commodities chart). -A failure to decline completely back to the supply line is a sign of relative strength. -How markets relieve overbought conditions within the channel is important. A move to the supply line with an overbought RSI (or momentum oscillator of your choice) that subsequently moves laterally is a bullish show of demand or strength. -A modest violation of an uptrend would suggest a weakening in the underlying trend while an inability to fully decline to the uptrend would suggest a trend gaining strength. Bloomberg Commodity Index Daily: The channel in commodities that has defined trading for most of the last two years displays many of the concepts. Note that like most other TLs and channels the process can be messy. Adjusting demand, supply and median lines as the market evolves takes practice. -From the pandemic low in late March 2020 commodities began an extended daily/weekly perspective bull market. At the end of September (B) the market formed a pivot that allowed the projection of an initial demand line. It also allowed the projection of an initial supply line from point A. -As the channel progressed, the markets behavior made it clear that demand was strengthening. Highs were overthrowing the initial projected supply line, reactions from the initial supply line were finding support ABOVE the demand line and when momentum (RSI) became overbought, it was being relieved through mostly lateral to higher prices. All represented strong underlying demand. -While the initial supply line proved inadequate it did provide a median line to the eventual channel. The median line offered important support or resistance on multiple occasions. -Soon after point C, a new supply line could be projected. -From March through September 2021 the market held solidly above the midpoint of the channel. This is clearly a sign of strong demand and bodes well for additional gains. -After testing the demand line in late 2021, the market once again moved back to the supply line. The easy move higher (no notable counter trend reactions) suggested a lack of sellers. Combined with the prior long lateral move above the midline, it was obvious that buyers were in complete control. -In February 2022 price exploded above the top of the supply line as the demand that had been evident for months completely overwhelmed the available supply. -Often a significant overthrow of the supply line is terminal. In this case the market produced a three drives pattern before beginning a steep decline. The break below the pattern trendline is a good example of a type 3 trendline. In Part 3 we will look at another example (Ten year Treasury yields) and explore using demand and supply lines as a trading vehicle. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
CBOT:AW1!Education
by CMT_Association
38
Trendlines & Channels Tutorial: Part 1This will be a multi part series on trendlines and channels, what they represent, how to draw and use them, and how I design trades around them. For the sake of simplicity this series will focus on uptrends. Importantly, the principles are roughly the same for both uptrends and downtrends except that downtrends often develop more quickly. I see many TL tutorials, but I don't see much attention paid to what a TL or a channel top represents. Whether a long-term pattern or a shorter-term pattern like a key reversal or a gap, being thoughtful and understanding the supply/demand dynamic that forms each pattern will make you a better analyst/trader. Trendlines represent the willingness of the composite investor to follow price higher/lower. In other words, uptrends represent the stride of demand and downtrends represent the stride of supply. As long as the composite investor is willing to buy/sell at consistently higher/lower levels, demand/supply remains consistent and the existing uptrend/downtrend is intact. Channel tops are known as supply lines and represent areas where supply, generally profit taking, should be expected to develop. The relationship between price and the TL and the channel top can offer important insight into the strength or weakness of the underlying trend. Failures to push to either the trendline or the chanell top potentially warn of a change in the underlying trend. We will cover this in part 2. What trendlines don't offer, at least in my approach, are standalone trading opportunities. Automatically buying trendline touches or selling trend line breaks must be combined with tactical entry techniques in order to build a safe trade. Most specifically, TLs don’t offer reliable sell signals when they are broken. Tests, both of TLs and channels are simply "get ready" warnings. A break of an uptrend does not change the underlying trend from up to down but to neutral. More work is typically needed to turn the trend. A TL is two or more points connecting support or resistance pivots of roughly the same magnitude. A trend channel is formed by building a parallel trendline connecting an intervening pivot on the opposite side of the pattern. The channel top in an uptrend is the overbought or supply line. It bears repeating, proper trendlines are drawn between intervening lows of roughly equal magnitudes and should never be forced. A TL is not tradable or informative if it does not conform to the natural path of the market. “Trendlines should be pretty.” Trendlines evolve. Initial projected trendlines are consistently inconsistent. More often than not they will have to be adjusted as price action evolves. In my estimation there are three primary types of trendlines: Type (1) These trendlines are shallow and take a significant number of bars to resolve themselves. They are more useful for defining the trend than for trading. Type (2) These trendlines are typically very steep and run along intraday or daily price lows or highs. These trendlines are very useful as entry triggers and become important as existing type 1 trendlines and channels are tested. Type (3) These trendlines define the bottom/top portion of a tradable pattern or formation including rectangles. A pattern TL is more apt to provide tradable support or resistance, particularly if the market is overbought or oversold during a testing phase. The horizontal lines along the top of lateral congestion fall into this classification. In part 2 I will cover how to utilize these sloped TLs and Channels to help understand the ebb and flow of supply and demand. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
SP:SPXEducation
by CMT_Association
26
DESCENDING CHANNEL - Range Trading StrategyHello my Fellow TraderZ, Today this is not any Trade idea but a TUTORIAL on how to Trade the RANGE or the CHANNEL. This is simple, safe, profitable and straight forward Price Action strategy. Here we are taking the chart of US Govt. Bond 10Y-yield. This is the perfect setup of DECENDING CHANNEL on MONTHLY chart. No time bound you can trade at any TIMEFRAMES, but Higher Time Frames are more reliable. You see, to draw any Trendline we need minimum 2/3 touch points. Whenever the price touches the Trendline, never open any Trade in RUSH, wait, see the kind of candles forming at Touch Points (at LOWER TL = BULLISH PA, at UPPER TL = BEARISH PA). PA = Price Action. This should be coupled with the VOLUME. Notice the S/R areas, where price gives multiple hits before bounce or rejection. This will give you extra boost as these horizontal S/R are more reliable than Dynamic S/R. Also these areas could be your Pivots to make ENTRY(incase price doesn't hit the channel Trendlines) or TP Targets. Look at the Percentage(%) wise gains simply following the channel(BUY THE LOW, SELL THE HIGH). Well I've just mentioned the BUYS, you can add the short positions also. Until the price is in channel you can take Multiple Trades both LONGing and SHORTing the market, unless the channel Breaks. This is the beauty of Range Trading. Similarly you can trade ASCENDING CHANNEL/WEDGES as well. NOTE : PRICE ACTION is majorly important in the Game of Trading. If you like this content, kindly give a FOLLOW & BOOST to me. Also COMMENT to bring more such #educational contents. Sorry if its a bit Lengthy post. Happy Trading . CHEERS!!!
TVC:US10YEducation
by TRADER-GOKU
1
The Heiken Ashi Algo Oscillator (Range Trading technique)You're watching this video because you keep getting stop-hunted. You feel like every time you enter a trade to the market it immediately goes the other way and you get this little spike out the top or the bottom of a candle that knocks you out of your position and takes out your stop loss. This is most likely due to Market manipulation on your charts which is making you think that price is moving up or down and instead you have just entered a trade at the beginning of the consolidation or distribution phase. Don't worry you're not alone this happens to a lot of novice and intermediate Traders. I really wish there was an indicator that would tell you as soon as you have entered into a ranging Market but usually you can't tell that until you've looked at your charts for a couple of hours and realize that price hasn't moved above or below a certain number. Well you're in luck because I just finished coating an indicator that will tell you that you have entered into a consolidation or distribution phase at the beginning. In today's video I'm going to show you how to do range trading using the Heiken Ashi Algo Oscillator available for free on Tradingview. Usually after price makes a big rally to the upside or to the downside you can expect that price is going to go into either consolidation or a distribution phase. On your charts this will look like where price runs flat for what could be an extended period of time. The rule of thumb is that after a very strong move to the upside or downside the consolidation period can be lengthy. If there is a short rally to the upside or downside then the consolidation or distribution phase would be a short period of time. So lets get into adding the indicator, and setting up your chart to trade in ranges using alerts from the Heiken Ashi Algo Oscillator. Open up TradingView Go to your indicators tab and search for Heiken Ashi Algo Oscillator and add it to your chart. In the settings make sure you've turned on the following: Range Range Break Long Range Break Short Support Levels Resistance Level There are a number of other alerts available in the Oscillator but we don't need them for this purpose. And as always, use the default settings. When you get a RANGE signal (Which looks like a line between two left and right arrows.) You want to grab your Parallel Channel Tool. You should have already set your support and resistance levels when you opened your chart for the day so look left of your candle. There should be a support or resistance alert right there. On my chart I have a Resistance level. So I'm going to use this line at the top of my parallel Channel Take your parallel channel tool And place it on that support resistance level just left of the candle . I'll drive it far to the right and make sure it's straight and click again. now drag it down to the closest support level and click again. You have just drawn your range. Also on my chart you can see here that I have 1 range indication and then just after it I have a second range indication. When you get a second one you disregard the first one because price has now entered into a new range. What you are looking at is the Centerline of your range. In this particular instance the first Range Line is lower than the second one so to correct this I have to take the top of my parallel Channel and drag it up until the dotted line is at the close of the candle with the new Range signal. do this by driving the top of the box and not changing the bottom of a box. In this case you can see how the bottom of the parallel channel is still sitting on my support and resistance level to the bottom but the top of the parallel Channel is above my support and resistance level And this is fine. The way you use this is by imagining your parallel channel has three levels. Level 1 = The top line Level 2 = The midline Level 3 = The bottom. Also you must respect any Support and Resistance levels traveling THROUGH the Parallel Channel What you are looking for is any candle that closes its majority size across one of these lines here are some examples: Please watch the video for a perfect visualization of how to do this. Directions of Trades in Range Trading. Follow the arrows. You ONLY trade to the INSIDE from the top or bottom of the channel. You also trade either up or down FROM the midline, depending on the majority close of the candle. Again also respect your support or resistance levels when a candle is crossing them.
Education
by CoffeeshopCrypto
7
The concept of trend lines, support and resistance Today, I am going to explain the concept of trend lines, support and resistance. Above is the weekly chart of the EUR/USD, period between 2017 and 2022. The resistance or support level is where the price gets rejected at least twice. After that, traders can draw a line connecting those swing highs/lows, which later turn to be the resistance or support. This line can be horizontal or sloping, thus called trend line. A trend line connecting 2 lower highs or more is called descending and considered a resistance. A trend line connecting 2 higher lows or more is called ascending and considered support. Broken resistance becomes a support level and vice versa. Let's take the example chart above and explain the drawings for a better understanding: 1) In January 2017, EUR/USD bottomed at 1.0350 and has been trading above that level since then, until 2022. In the current year, the pair tested the mentioned price more than twice and bounced again. But eventually, sellers were able to break through this support, which later on in July, turned to be a resistance. Buyers tried to break through that level but failed to do so, and the price kept on going further down. 2) During the pandemic in March 2020, demand for safe assets surged, causing the Euro to trade as low as 1.0630 where buyers were met and made a quick rebound. In 2022, the Russia-Ukraine war has put a huge pressure on the EUR/USD, resulting in a strong bearish move. Sellers were able to break the 1.0630 level successfully, which later turned to a resistance level. 3) I highlighted the main 3 parallel trend lines/channels throughout the 2018-2022 period 1: A very clear lower highs/lower lows pattern indicating a bearish trend. 2: Once the 1.0630 support was met, buyers were able to create a higher highs/higher lows pattern indicating a bullish trend reversal. 3: However, in summer 2021, the pattern was broken and we started to notice trend exhaustion indicated by a failure to make higher highs and the market entered a bearish trend again inside a descending channel till present. I hope the drawings and explanations are clear. Will be happy to answer any question. Thank you
Education
by RamziAbouAbdallah-CMT
Identifying a Trend — #Forex for BeginnersA trend is the general direction of a market. Unless something happens to change the trend, a currency or commodities price tends to move within a channel. A channel is formed by a Support level and a Resistance level. The Support level is the trendline for the Lows and the Resistance is the trendline for the Highs. Adding in additional Trendlines, between Support and Resistance, using the Ray Tool builds addition points of interest. Trendlines (how to draw) Identify 2 Lows or 2 Highs The Support Trendline can be identified as soon as 2 Lows are formed and Resistance Trendline can be identified as soon as 2 Highs are formed. Traders use the Ray Tool instead of the trendline tool to extend trendlines into infinity (Check off “extend right” in the settings by double-clicking on the ray). This is important because traders use trendlines to assist them with locating future trade opportunities as well as locating important areas in current trades. Traders always draw trendlines from candle wick to candle wick. By using the magnet tool in TradingView, this allows locking on to the candle wick to be much more easy and accurate. A best practice is to touch as many points as possible even if other candle wicks are cut through along the way. Always draw multiple trendlines for Lows and Highs on different time frames. A minimum of 2 touches is required for a valid trendline. The more touches the better. Using the @alphamindfx Method with the AM All-In-One Indicator
Education
by elleferrero
2 Steps in Drawing a Downtrend Channel A buying strategy in a downtrend. How to identify buying opportunity in a downtrend? Not my preference to buy in a downtrend, but that does not mean we should avoid it when buying opportunity arises. Recognizing it is a downtrend, we keep our buy position short-term; as we are going against the trend. Discussion: Rules in constructing a downtrend parallel trendline Rule 1 – First the downtrend line Rule 2 – Then, its parallel Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CBOT_MINI:MYM1!Education
by konhow
39
Wyckoff trading using the example of ADA/BTC Accumulation schemePay attention to the phases and letter designations on the graph that I showed on the ADA / BTC pair. (Cardano). A diagram of the accumulation phases is shown. Which are relevant for trading now. Several trading methods are combined on the chart: 1) Trading by the Wyckoff method. 2) Trade in horizontal channels. 3) Trade from important areas (price reversal points). 4) Trading in secondary local trends. Now the price is at the important zone of the mirror level which, from the development of the situation, can act as support or resistance. Channel pitch 30%. You can work in two directions. _________________________________ About Wyckoff's trading method. The forerunner of volume analysis (VSA) is Richard Wyckoff. Roughly speaking, the whole point of the method can be expressed - trade for a major market player. The creator of this technique himself was a man who had a system-forming influence on stock trading. It was not a poor theorist who got rich after publishing books! He was a very successful trader and earned impressive capital in his day. The very method that he was allowed to achieve and the entire 40 years of experience in trading, he published in his book in the public domain is already closer to his death Wall Street Ventures and Adventures Through Forty Years. At the end of his life's journey, Wyckoff became more altruistic, and decided to share the knowledge that led him to wealth. He died in 1934. The Wyckoff trading method was developed in the early 1930s. It consists of a number of principles and strategies originally developed for traders and investors. Wyckoff devoted much of his life experience to studying market behavior, and his work still has an impact on much of modern technical analysis (TA). Currently, the Wyckoff method is applied to all types of financial markets, although initially it was focused only on stocks. During the creation of his work, Wyckoff was inspired by the trading methods of other successful traders (especially Jesse Livermore). Today, he enjoys the same respect as other key figures such as Charles Dow and Ralph Nelson Elliott . But for example, unlike Elliot’s theory, which is good in theory, but not always applicable in practice, the Wyckoff method is many times more effective for making money not in theory, but in practice. _________________________________________ According to Richard Wyckoff's trading method, there are 3 laws: 1) The law of supply and demand . 2) The law of causation. 3) The law of communication efforts and results. The first law states that the value of assets begins to rise when demand exceeds supply, and accordingly falls in the reverse order. This is one of the most basic principles in the financial markets, which does not exclude Wyckoff in his work. We can represent the first law in the form of three simple equations: 1) Demand> supply = price increases. 2) Demand <offer = price falls. 3) Demand = supply = no significant price change (low volatility ). The second law states that the differences between supply and demand are not a coincidence. Instead, they reflect preparatory actions resulting from certain events. In Wyckoff's terminology, the accumulation period (cause) ultimately leads to an uptrend (consequence). In turn, the distribution period (cause) provokes the development of a downtrend (consequence). Wyckoff’s third law states that price changes are the result of common efforts that are displayed on the trading volume . In the case when the growth in the value of the asset corresponds to a high volume of trading, there is a high probability that the trend will continue to move. But if volumes are too small at a high price, growth is likely to stop and the trend may change direction. _____________________________________ Wyckoff Price Cycles. According to Wyckoff, the market can be understood and predicted using a detailed analysis of supply and demand . This can be done based on price action, volume and timeframe. By observing the behavior of large groups of investors, Wyckoff was able to learn to notice certain points during which preparations were made before a large price move. These moments were called accumulation (before the upward movement of prices) and distribution (before the fall of prices). _____________________________________ “Composite person” (major player) and phases. Wyckoff created the idea of ​​a “composite man” (from the English composite man, composite operator), which embodies the imaginary personality of the market. He invited all investors and traders to study the stock market from the point of view if it were controlled by one subject, as this could facilitate their further following the trends. At its core, the composite person represents the largest players (market makers), wealthy people and institutional investors. The behavior of a composite person is the opposite of most investors and traders that Wyckoff often observed, given their financial losses. This is the opposite of crowd action. The cycle described in the Wyckoff method consists of four main phases: 1) Accumulation (accumulation). 2) Impulse or uptrend. 3) Distribution. 4) Markdown (correction, downtrend). 1 phase. Accumulation. A composite person accumulates assets before most investors and traders begin to do so. This phase is usually marked by lateral movement. Accumulation occurs in a gradual manner to avoid significant price changes. 2 phase. Impulse or uptrend. When a composite person takes possession of a sufficient amount of assets, while the sales force is depleted, he begins to push the market upward, forming an emerging trend that gradually attracts more and more new investors, which subsequently leads to an increase in demand. 3 phase. Distribution. Then the “composite person” distributes the purchased assets. He begins to sell his profitable positions to those who enter the market at a late stage (“hamsters”). 4 phase. Markdown (correction, downtrend). Shortly after the distribution phase, the market begins to fall. In other words, after the composite person has completed the sale of a significant amount of his position, he begins to push the market down. To repeat the cycle again. The hamster is not a mammoth - it will not die out. In the end, supply becomes much larger than demand, and a downtrend will follow. _________________________________________ Approach to the Wyckoff market in five steps. Wyckoff also developed a five-step approach to the market based on numerous principles and methods. Simply put, such an approach can be considered as the procedure for applying his work in practice. Step one: identify the current trend. The primary task is to determine the current trend and a superficial assumption where and how far it can go, in connection with which the following questions arise: "what is the current trend?", "What is the relationship between supply and demand?". Step two: determine the strength of the asset. How strong is the asset in relation to the market? Does its value move with the market or the opposite of it? Step three: find an asset with a reason for further growth. Are there enough reasons to open a position? Is the reason good enough for the potential benefit (consequence) to justify the possible risks in the future? Fourth step: determine the likelihood of cost increases. Is the asset ready for the intended move? What is its position relative to the current trend? Does the price and volume of trades correspond to possible growth? This step often includes Wyckoff tests for the purchase and sale of the selected asset. Step Five: Your Login Time. The last step contains all the timing information. For the most part, this is due to the analysis of a trading instrument to compare their behavior with the main market. In cryptocurrency, for example, with bitcoin . __________________________________________ Wyckoff Trading Schemes. Accumulation and distribution schemes are the most popular part of Wyckoff’s work, at least among cryptocurrency communities. This model breaks down these two schemes into smaller sections of five phases (from A to E), as well as several events that are briefly described below. Pay attention to the phases and letter designations on the graph that I showed on the ADA / BTC pair. A diagram of the accumulation phases is shown. Which are relevant for trading now ACCUMULATION DIAGRAM PS - preliminary support (initial support) the first resistance - appears after a significant decrease in the price, the volume increases, and the price accelerates the decrease over time. SC - the culmination of sales - there is a sharp drop in prices for large volumes. AR - automatic rally (automatic upward movement) appears because there are very few sellers in the market, and buyers quickly raise the price up. ST- secondary test (repeated test) - occurs to check the forces of supply and demand . There may be several ST and SC . ST can even slightly break the price level set by SC . Spring - does not always occur, in the late stages of accumulation. The logic of false breakdown. Test - Occurs after Spring is formed and should be on a small volume . Usually above the low at a lower level. SOS - a sign of strength (signs of strength) the price begins to rise and stands out from the price range TR (trading range) with an increased volume . LPS - the last support point, the last resistance level , occurs after a breakdown (SOS), this is a return of prices in the vicinity of TR with low volume and low price dynamics. BU (back up) - the return of prices to the accumulation channel, which follows the realization of the profit of short-term investors and is a demand test. It does not always happen, for obvious reasons. Phase A. The strength of sales decreases and the downtrend begins to slow down. This stage is usually marked by an increase in trading volume . Preliminary support (from the English preliminary support, abbr. PS) indicates that new customers are starting to appear, but this is still not enough to stop the downward movement. The culmination of sales (from the English selling climax, abbr. SC ) is formed through intense activity aimed at selling assets, as a result of which investors begin to capitulate. This often manifests itself as the highest point of volatility , when panic sales form high candles and wicks. A strong drop quickly develops into a jump or automatic rally (AR), due to the fact that buyers begin to absorb excess supply. Thus, the trading range ( TR ) of the accumulation scheme is determined as the distance between the minimum culmination of sales and the maximum of automatic rally. A secondary test ( ST ) occurs when a drop in market prices crosses the sales climax ( SC ) to verify the validity of a downtrend. In this case, trading volume and market volatility are usually lower than usual. While the second test often forms a higher minimum relative to the culmination of sales, this does not always happen according to plan. Phase B. Based on the Wyckoff law of causation, phase B can be considered as a cause that leads to a certain effect. Phase B is the consolidation phase in which a composite person accumulates the largest amount of assets. At this stage, the market tends to test various levels of resistance and support in the area of ​​its trading range. Numerous secondary tests ( STs ) may occur during phase B. In some cases, they show higher highs (bull traps) and lows (bear traps) with respect to the culmination of sales and the automatic rally, like phase A. Phase C. This phase is a typical period of asset accumulation. It is often the last bear trap before the market begins to show higher lows. During phase C, the composite person provides a small proposal, and in fact, those who were supposed to sell their assets have already done so. During this phase, support levels begin to break through to stop traders and mislead investors. We can describe this as the last attempt to buy an asset at a lower price before the start of an uptrend. Thus, the bear trap encourages small investors to abandon the holding of their assets. However, in some cases, support levels can be maintained, and the "spring" simply does not begin. In other words, there may be another accumulation scheme, which includes slightly different elements, but not “spring”. However, the overall structure of the circuit remains valid. Phase D. Phase D represents the transition between cause and effect. It is located between the accumulation zone (phase C) and the breakout of the trading range (phase E). Typically, a significant increase in trading volume and volatility occurs during phase D. Usually it assumes the last point of support (from the English last point support, abbr. LPS ), demonstrating a lower minimum before the market begins to move up. LPS often precedes breakthrough resistance levels, which in turn creates higher highs. This indicates the manifestation of signs of strength (from the English. Signs of strength, abbr. SOS), as the previous resistance levels become new levels of support. Despite a somewhat confusing terminology, there may be several last points of support during this phase. They often increase trading volume when testing new zones. In some cases, the price may create a small consolidation zone before effectively breaking through a larger trading range and moving on to phase E. Phase E. Phase E is the last step in the accumulation pattern. It is marked by a clear penetration of the trading range due to increased demand in the market, which indicates the beginning of an uptrend. __________________________________________ Volume in separate phases (VSA). A key element in the analysis of the Wyckoff method is the preservation of volume at the individual stages of accumulation / distribution. Phase A. In this phase, dynamic movements of prices with an increased volume occur. We have new highs / lows and climax points, followed by automatic price rallies in the opposite direction, and then retest on a smaller volume . This phase forms the border of the TR (trading range) channel, in which the price will consolidate until the rebound in phase D and E Stage B. Here, large investors get rid of their last position from the previous trend and prepare for its reversal. Phase C. This is a very important phase, because in phase C it comes to the end of the current trend. Weak players leave the market for Spring (accumulation) or UTAD (distribution). If these formations do not exist, then we are dealing with LPS , where the inability to continue the current trend is visible, the price practically does not move. Phase D. With signs of weakness in the current trend from phase C, the time comes to show the strength of the adversary. The price breaks the level in the expected direction, with high dynamics and increased volume . Phase E. Confirmation of our assumptions and completion of the accumulation / distribution process. Price accelerates in the expected direction. If we were unable to join the movement during phase D, then further problems may already arise with this. And this deal will be less profitable. ______________________________ Conclusion on the Wyckoff trading method. Almost a hundred years have passed since the publication of the work, but the Wyckoff method is still in demand to this day. By nature, the market does not always exactly follow similar trading patterns. In practice, accumulation and distribution patterns can occur in different ways. For example, in some cases, phase B can last much longer than expected. For this reason, spring, UTAD and other tests may simply be absent. However, Wyckoff's work offers a wide range of reliable trading techniques that are based on numerous theories and principles. His work is certainly valuable to thousands of investors, traders and analysts around the world. The accumulation and distribution schemes described in this article may be suitable for understanding the general order of cycles in financial markets. But recently, due to the widespread introduction of algorithmic trading and the use of it by large players, it has become increasingly difficult to notice a large player on highly liquid instruments, but it is possible. According to three schemes of dialing / resetting by the position algorithm. This analysis method is more relevant for medium-liquid instruments, where fewer algorithms and highly professional traders are clearly hard to see. One person can hide his real work, and do fake trade for dozens of people. It is clear that with good preparation, it is possible to calculate and understand what will happen next, but naturally this is not an analysis of the schedule. Analysis of the schedule in the work of a truly successful trader in fact takes no more than 20-30% of the work. __________________________________ It is impossible to describe everything in one article. The Wyckoff method at first glance seems complicated, but it is not. The main thing is to understand the essence of the work and practice trading tools. To start, start trading with a symbolic amount. Always remember, a theory without practice is zero. Once again, the Wyckoff method works well on medium-liquid instruments such as cryptocurrencies, but not lower than the top 100.
Education
by SpartaBTC
4
Lines, trendlines and channelsLines are one-dimensional figures that extend endlessly into a future and which connect the price segments on a chart. They are often used to determine a trend and particular support and resistance levels. Lines are easy to draw and use as technical tools. Over time, lines became implemented into various trading systems such as Andrews' Pitchfork and Gann Fan Lines. However, lines have countless more uses. For example, lines can be used to section particular parts of a price pattern. Additionally, they can be used to draw horizontal support and resistance levels. Lines also find utility in measuring the speed of the price ascend or descend. Furthermore, they can be deployed in various trading strategies and used to identify a trend. Illustration 1.01 The picture above shows the daily chart of Microsoft Corporation stock. A simple dashed line (white) measures the percentual decline between 22nd November 2021 and 8th March 2022. Trendline The trendline is a simple line that connects prices across a chart. It reflects a primary trend in the prices of stocks, commodities, etc. Trendlines can be used to construct channels and numerous different bodies. In addition to that, trendlines can also act as resistance or support. Illustration 1.02 Illustration 1.02 shows Lockheed Martin stock on the daily chart. It also shows the trendline (white) pointed to the upside as it cuts through a substantial portion of lows. Channels Channel can be constructed by two parallel trendlines, which act as support and resistance levels. A channel can be sloped upward or downward depending on the general trend of prices. When a channel is correctly determined and drawn, the price often moves between the two boundaries. However, occasional breakouts occur. As a result, they establish a new trend or validate a current one once the price returns to a channel. Illustration 1.03 The image above shows the daily chart of gold. The channel (white lines/boundaries) can be observed as well. False breakout took place on 27th January 2022. However, the price retraced back into the channel on 9th February 2022. Resistance and support levels Often, a line or trendline acts as a particular support or resistance level. The function of these two levels is to halt price rise or decline. Typically, it is considered bullish when resistance is penetrated to the upside. Contrarily, when support fails to hold selling pressure and breaks, it is usually a bearish sign. Resistance and support can be drawn by a simple horizontal line. However, resistance and support can be at a slope. That is common, for example, for channels in a strong uptrend or downtrend. Generally, the significance of support or resistance grows with an increasing number of successful halts being put to a price rise or decline. Illustration 1.04 Illustration 1.04 portrays the daily chart of Bitcoin. Major support and resistance levels are indicated by white horizontal lines. The first top also acts as the resistance of utmost significance as the price previously halted its rise at this level. Speed lines Speed lines are three consecutive lines used to estimate future support and resistance levels. In an uptrend, speed lines are constructed by creating a box connecting a low point in the lower-left corner and a high point in the upper-right corner. Next, a vertical line connecting these two points is sectioned at each third and in the middle. Then a speed line is drawn from the actual low in the lower-left corner through the right side of a box where sections were marked. These speed lines are extended into the future and considered to estimate natural support and resistance levels. Modern techniques include creating speed lines, such as sectioning a box according to Fibonacci ratio numbers. Illustration 1.05 The picture above shows Tesla stock on the daily chart. It also shows the unconventional construction of speed lines from a box cut into four equal sections. Disclaimer: This content serves solely educational purposes.
NYSE:AMCEducation
by Tradersweekly
4
Longing GRT after Falling Wedge [tutorial] with exampleThis is a Tutorial how to use the falling Wedge pattern as longing condition because its relativ reliable. The falling Wedge is a reversal pattern which will form during an uptrend, so it will interrupt the prior trend. Which isnt that easy to identify if you dont have any experience.(Tip just use the Indicator from tradingview it will work great and do a lot of work for you ;) ) Another significant feature is the contraction over the elapsing time until mostly continuation of the previous trend, that will be the time we look for confirmation and long this position. At number 1 you can see the difference between the highest and the lowest point of the wedge which will be the target range of our taking profit after we broke the resistance. The bottum/supportline is the stop lose range. At number 2 you can see my position based on the numbers from number 1. number 3 and 4 is just repeated 1 and 2. if you spend a lot of time infront of your PC you can set the stop lose high so it will become another stop lose and you have garanted profit. Dont get cocky and set to wild leverages. This isnt a financally advise! i dont take responsibilities, so calculate your own risk and do your own research
Education
by devolping_trader
what is the price? 📖💡What is the price? In simple word, the price is the fee that buyer pay for the output or product that seller offer to him/her. The price is the fee that buyer and the seller define as an agreement for the product. The most important key point is the agreement The price is the decision of the buyer for affording one concept and the decision of the seller for losing one concept. The price is not fixed and changes all the time and even different from market to market and because of that we have opportunity to buy one concept or sell it. The hole market is the movement of the price. Please, feel free to ask your question, write it in the comments below, and I will answer.🐋
Education
by MadWhale
5
Safe Haven Currency, How are they affected by global eventsHello everyone: Want to talk a bit more about safe haven currency in the market. Since the recent tension between Russia and Ukraine, the safe haven currency could strengthen as a result of such uncertainty in the world. We will take a look at some past history of these currency pairs, how they react to the market at the time, and what could we reasonably expect in the current market conditions. Safe Haven Currency USD JPY CHF It's in our interest to look for opportunities when a strong currency is paired with a weaker one. This generally will move the price very impulsively with strong momentum. Pair such as these below will potentially develop the best price action for good R:R trades. AUDUSD NZDUSD USDCAD GBPUSD AUDJPY NZDJPY CADJPY GBPJPY AUDCHF NZDCHF GBPCHF CADCHF Always have good risk management when it comes to entering. Don't enter all the pairs, don't open too many positions, and understand correlation between the currency pairs. Thank you DISCLAIMER: -My forecast and analysis are NOT trading signals nor financial advice, you should not enter trades and invest solely on this information. Jojo
Education
by jojofang0901
31
All too familiar crossroad/trade-offLet's be honest: who doesn't want a magical computer program that runs on your computer and tells you the future price of your favourite ticker, be it EURUSD, GBPJPY, BTCUSD, XAUUSD. More so a automated trading strategy that runs in the background 24-7 and will trade away. Let's also be realistic : if someone has the code that can do this, they most likely won't share it, at least not for free. Somehow, in the past few months, I had this thought that I could just, you know, use Google to find such kind of code. Surprisingly though, I learned a lot during this doomed-to-fail process. Not that I am currently making easy money in the market. Rather, now I understand why some common tutorials you'd find online may appear to work but will NOT work and what it might actually take to build a balanced profitable trading system. When we talk about the secret behind becoming consistently profitable, there's actually no secret. A technical indicator may pop up in your mind that they may have secrets that make them consistently profitable. But no, the professionals are just like you, we are all human subject to the same stimulus in the market, fear and greediness. /// The sole reason or one of the main reasons that I have taken it upon myself to start writing and posting ideas is to share my most up-to-date understanding with those of you who are also interested in computer assisted trading and to also lay out the many other inter-linked subjects trading related in the hope that someone can benefit from these ideas in some way/shape or form.💡 I myself personally have reached a crossroad/trade-off where I am not able to automate a strategy as I have no coding skills but that didn't stop me from compiling and using indicators, making them talk to each other, creating chart templates that fit a certain style/way of trading whether it be trend following/reversion you name it and in general having more of a methodical rules based approach to entries/exits. /// After all these hustles, I decided to take a step back and revisit an initial assumption: there is some underlying correlation between future prices and past prices that can be learned by a machine. The school of technical traders would probably agree with this and it is likely for short amount of time, the price action is indeed momentum driven. Nevertheless, once the news on companies or macro economy kicks in, things can go very wild. Unfortunately, price dataset's do not directly contain such information per se, but the future price will certainly depend on when certain news becoming known. Many often get blinded by the short-term, just one day the market rises/drops 1%, the whole crowds become fearful. Bad news and good news are always in the market, when people are fearful, they will look to the bad news, while the opposite for the hopeful times, they will look to the good news. So here is the trade-off. It is more likely that you can use machine learning to capture the momentum of price actions on a short time scale. But you need to have high accuracy and make trades frequently to make meaningful money. Alternatively, if you build a model that accounts for news mentions and provide an okay prediction, say a few days into the future, you can also be rich pretty soon. Both are hard problems to solve. As you might have expected from the very beginning, making money is hard . OANDA:EURUSD 👍
Education
by AdamsLibrary