Hi everyone, Looking for interpretations of the below chart. I havent found RSI,STOCH or MACD useful in the past. The blue line just below market is the level I am interested in buying. My current thinking,i would actually need price to pass through the blue line and i would maintain a buy above it. In anyones opinion/interpretation,do the indicators suggest strength at that level?
Strength? Could be. Only know once a reversal is underway. But the ASX200 index did hit 78.6% ret level which lined up fairly close to a previous upside wide range breakout bar and previous resistance behind that turned to support:-
Simply delete those RSI,STOCH or MACD. Also, delete the blue line as it is not made of a solid slab of concrete. It doesn't add value. In fact, it adds confusion and frustration. You can't buy it right now as the highs are getting lower and lower. Buy it when the lows are getting higher and higher. Also, use Intermarket correlation to improve the success rate. Humans are extremely predictable; you will add more lines, more indicators, fibos, butterflies, rays .....
I wouldn't buy because the immediate trend looks bearish with no sign of reversal. It's not a turning point, yet. Market made a new low. No rally whatsoever. Could very well touch 7200 but it's none of my business. But it's also too extended to attempt a short. Good short was around 7300 on pullback
@ semperfrosty putting aside that it would be against the flow of the market as already suggested by others, the level you draw as a thin line on H1 seems to me to be located inside a wide flip zone that can be seen on higher timeframes (see my H6 chart). Therefore, relying on a thin line on H1 as a refernce point is in my opinion little bit of a wishful thinking, especially if the overall chart pattern looks weak. Yes, prices have penetrated the flip zone onhigher timeframe number of times, but nevertheless it does seem to continue to have some flipping validity, which is suggesting that there are some market participants getting trapped in that area. If you want to be a successful PA trader, then I’d recommend that you always check the surrounding timeframes, especially the higher ones so you can build your own “PA story”, otherwise what happens is that we end up judging the whole “movie” on just one or two snapshots, and lots of important information is then not even being considered. While there is nothing wrong with trading off just one timeframe, it just doesn’t seem to be the most efficient way of analysing PA. Obviously there needs to also be some signs that buyers are beginning to overbalance the sellers in that area, otherwise you’ll be just catching falling knives. There is nothing wrong with trading just off levels without any confirmation, I do it all the time, but that seems to work much better on mean reverting markets such as in FX, but not against the trend in equities. I think you’re on the right track with the general concept, but it might need some tweaking and perhaps putting together a checklist of certain criteria that you need to objectively see on the chart before even considering trade, otherwise PA will lead you down a rabbit hole. You need to counterbalance a subjective PA with very some kind of a very objective framework (e.g using checklists), otherwise you might find yourself getting sucked into crappy trade, as the market is “advertising” all the time, and lots of PA traders fail because they’re unable to create an objective framework to counterbalance the subjectivity of PA trading
Thanks. Agree that a checklist will help. If you mean short term long position and longer term short position then I agree. I shorted at 7383 and exited at 7245 so I was looking for a short term bump at 7228 before continuation of downtrend. I wasn't awake to trade it but I got a small reaction to 7228.I think I would have been looking for a bit more. Update chart: