Technical Charting
1.Trends ,Trend Channels & Wedge Formation
2. Relative Strenth Index (RSI)
3.Average True Range (ATR)
4. Fibonacci Retracments
1. Trends ,Trend Channels & Wedge Formation
The only part of the trend where you should look for entries is at the beginning of a Phase 1 or when the previous high is taken out (uptrend) or previous low is taken out (downtrend).
If you get your confirmation to take a trade then don’t hesitate, take the trade! It’s very common for a new trader to be fearful of entering a trade but I fearful trader will never be a successful one. Learn to put your emotions aside and just follow the rules that’s all it comes down to.
A social proofing trader only enters the market when they get more confirmation of price actually heading in their favourable direction but often if you enter too late you can get caught out by the pull back of a phase two which could hit your stop loss. Just remember to pull the trigger at the most opportune times and if you’re too late then rather leave it alone and wait for the next setup
Ascending Trend Channels : Ascending trend channels are a useful tool due to their ability to assist a bias is determining overall changes in trend between support and resistance levels. As long as prices remains within the ascending trend channel, the upward trend in price can be expected to continue. As soon as prices exceeds either trendline forming the channel a strong signal either to buy or to sell is generated (depending if it was support or resistance broken). A breakthrough the upper trendline (resistance) generates a strong buy signal, while a breakthrough the lower trendline(support) generates a strong sell signal.
Descending Trend Channels : A descending channel is drawn by connecting the lower highs and lower lows of a security's price with parallel trendlines to show a downward trend. Officially, the space between the trendlines is the descending channel, which falls under the broad category of trend channels.
Wedge : A wedge is formed by two diagonal lines converging where one line illustrates support and the other resistance.There are two types of wedges, namely an ascending wedge and a descending wedge:
a) Ascending Wedge
b) Decending Wedge
2. Relative Strenth Index
The relative strength index is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with relative strength.
RSI assists in evaluating the strength of the current market conditions. It helps identify if a market is in an overbought or oversold state. RSI measures on a scale of 0 to 100
3. Average True Range (ATR)
The average true range (ATR) is a technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for that period. Specifically, ATR is a measure of volatility introduced by market technician J. Welles Wilder Jr. in his book, "New Concepts in Technical Trading Systems."
4. Fibonacci Retracement
Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur. They are based on Fibonacci numbers. Each level is associated with a percentage. The percentage is how much of a prior move the price has retraced.The Fibonacci tool can help us identify key levels of support and resistance as well as key zones of retracement against an initial significant phase in cyclicity.The most popular Fibonacci retracement levels are 23.6%, 38.2%, 61.8% and 78.6%.The Fibonacci tool is generally used between two levels of significant highs and lows (visa versa).
