How To Read Chart

Discussion in 'Technical Analysis' started by pela78, Sep 16, 2019.

  1. pela78


    Hello, I am Oleg Alexandrov, Market Analyst and Chart Reader. In this thread, I will share my approach to Read the Charts as a book.

    What is Chart Reading

    This is reading the Story of the neverending battle between buyers and sellers. By analyzing price & volume relationship, Chart Reader extracts the latest data of balance between Demand and Supply. Thus, he becomes capable to understand the Current Character of the market. Playing in harmony with the Market Character - this is the way to decrease risk and increase profits.

    Warning. The main goal of the Market is to make as many fools as possible. Bernard Baruch.

    Thanks for your interest. Now let's go to the practice of Chart Reading. Chart Never Lies.

    Used Acronyms
    • ND — No Demand; NDW, or ND-Wave — No Demand Wave
    • DB — Demand Bar; DW, or D-wave — Demand Wave
    • SB — Supply Bar; SW, or S-wave — Supply Wave
    • NS — No Supply; NSW, or NS-wave — No Supply Wave
    • SLK — Stop Loss Killer; SLKT — SLK at the Top (bearish sign), SLKB — SLK at the bottom (bullish sign)
    • EVR — Effort versus Result; EVRW — EVR wave; EVRT — EVR at the Top, EVRB — EVR at the bottom
    • SOS — Sign of Strength
    • SOW — Sign of Weakness
    • ZOS — Zone of Strength
    • ZOW — Zone of Weakness
    • SFDB — Support from Demand Bar
    • RFSB — Resistance from Supply Bar
    • TF - TimeFrame (period)
    • Cha Cha - Change in Character
    Erin and Fonz like this.
  2. pela78


    It is not, and never has been or ever will be a good idea to tell people when to buy or sell, because once you enter a trade, your emotions take over, and it is these emotions that will impede the trader.

    I have never ever heard the real truth as regards to market action on television or in newspapers. As a trader, you will find you are constantly mislead by lies, roomers, misinformation. So on the basis of this information arriving on your doorstep will give you and thousands of other traders a completely wrong feel as to the markets real intent

    Believe me, the markets move on the shifts of large blocks of professional money, tipping the balance of supply and demand one way or another, which to the trained observer you can read.

    Supply and Demand

    We have all heard the pundits in the money section of our news programs telling us that this market or that market, has gone up, down or sideways, for some specific reason or another.

    The price of oil has gone up and the stock market has fallen. - for example.

    Of course, at another time the price of oil will rise and the stock market will rise too - but nobody ever seems willing to explain this apparent dichotomy. The simple truth is that nobody really knows why news may have caused the markets to move in one direction or another. News doesn't actually drive the markets, it follows it.

    Prices are driven by supply and demand. When demand is strong and supply is limited prices rise. When demand is weak, or supply is excessive, prices will head lower. If demand is strong and the news is, bad prices may still move lower, but the market will react less strongly than if the demand had been weak or there was too much supply. The market may even rise despite the worst possible news.

    The key to trading successfully is to determine the balance of supply and demand in the market.

    Many good traders have a sense of this without even trying, there are 'natural' traders who always seem to be on the right side of the market, but if you are not able to do this instinctively you can learn to do it through Chart Reading Method? And you will be amazed at how much you will learn in a short time.
  3. trdes


    This is good and mainly all correct information. Still without people having an effective measurement of supply and demand or way to know when / where accumulation and distribution zones are its not going to help them a lot, but at least you're giving people a starting point.

    Only thing I disagree with is " never has been or ever will be a good idea to tell people when to buy or sell" that's too much of broad statement. May be true in general and in most cases, but factually it is not correct (if you're truly saying and standing by the 100% statement).
    Erin and pela78 like this.
  4. pela78


    Have you ever seen that massive bad news come to the public at the market bottoms? And the best optimistic news bombards public heads at the market tops.

    So, better not to read the news, read the chart. It has the language that can be translated into the opinion. This is the way of judging the market by its own behavior.
    Erin likes this.
  5. dozu888


    2 points:

    - news are great clues... ignoring them you are losing an edge;
    - so far everything looks ok, but hind sight stuff doesn't help much with limited data samples.. need some real time calls and reasons behind them.

    benefit of the doubt, but I hope this doesn't turn into another - 'I have something to sell to you'.
  6. tommcginnis


    Yep: dozu called it.
    • Looks very polished -- so much so that it looks like it's polished beyond that for personal use -- i.e., "spamy".
    • The market model is startlingly incomplete: there is nothing to explain market imbalance, only post hoc recognition of that imbalance, and then "explaining" that imbalance to keep direction going, OR to declare (again, post hoc) "a turn has been made!" :wtf:

    Thus, no predictions are possible -- only self-justifying after-the-fact opinions. :rolleyes:

    Prices move based on more of buyers or sellers showing up at the current price.
    Buyers and sellers show up because their expectations of future price differ from the current price.
    Expectations change because of news.

    OP's set-up removes news. :confused:
    Not quite. News is but one part of what buyers and sellers consider to form their expectations about their positions vis-a-vis the market. News precedes, it follows, it suffuses.
    Last edited: Sep 16, 2019
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  7. pela78


    After Distribution range (AB wedge 0.644-0.640), #NZDUSD produced the decline toward 0.636.

    I expect a stalling of decline around this level because of two arguments:

    1. we have NS+DB sequence on the background (green zone).
    2. Bears completed the run equaled the height of the AB wedge. So, target C=B-AB is accomplished.
    Watch for Panic Selling on faster TF

  8. pela78


    #BAC #stock chart reading. The Accumulation as a part of the Market Cycle

  9. pela78



    NZD on the faster TF
  10. trend2009


    good stuff. please keep posting. I believe every bar has its meaning. it is the outcome of bull and bear fight.
    #10     Sep 16, 2019
    pela78 likes this.