Thursday, December 1, 2011

Secret of a Chart

The purpose of this post is to share my chart reading another view with you so that you can analysis a chart independently. Next time, I'll put a chart for you. Your job is to explain it.

Okay, let's start. Pls. see the below chart :

(Pls. click on the image to enlarge)
As indicated in the chart -
(1) This shaded area is our Strong Bullish Zone. When price comes and stays in this zone, you may assure that your investment is safe.
(2) Whenever price comes in this zone, I strongly believe that you are not holding this share. I'm talking about the Strong Bearish Zone.
(3) This line is our Support/Resistance Line. Very important line.
(4) Zone between Strong Bullish Zone and Support/Resistance Line, we call it Bullish Zone.
(5) Zone between Strong Bearish Zone and Support/Resistance Line, we call it Bearish Zone.
(6) Sideways market. We always avoid this market.

Now, let's see if we put the price on the above chart :
(Pls. click on the image to enlarge)
The price chart is little bit difference from our traditional candle stick chart. Actually, I've used Heikin-Ashi price chart. It has some advantage. It eliminates the market noise so it is much better for trading, both for reversal and also continuation signals to follow the trends.

One of the another advantage is - you need not to memorize the behavior of hundred of the candle sticks. Just keep the below 3 candles in mind -

Candles with upper shadows indicate a uptrend. Longer bodies indicate a stronger uptrend.


Candles with lower shadows indicate down trend. Longer bodies indicate a stronger down trend.


Candle with a small body surrounded by upper and lower shadows indicates a trend change or weakening trend. It's our alert zone for taking preparation of BUY/SELL. If you find the Trend Reversal/Weakening Trend candle in Strong Bullish/Bearish Zone, pls. skip it and wait for the next candle for a decision.

Now, you haven't memorized the behavior of hundred of Candle Sticks. Our job is almost done. Now, I will show you the BUY and SELL Zone. Pls. see the below chart:

Before any BUY/SELL, pls check the below point again :
=> Candle is above/below the signal line
=> Candle is Strong Bullish/Bearish Zone.
=> Bullish/Bearish/Weakening Trend Candle

Now, you know the BUY time, SELL time, Alert time and Avoid the share/market time. Best of Luck. by JC
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11 comments:

  1. AnonymousDecember 2, 2011 at 8:52 PM

    nice ! and thanks

    ReplyDelete
  2. AnonymousDecember 2, 2011 at 9:50 PM

    Excellent Bro. keep it up. Many Thanks

    ReplyDelete
  3. AnonymousDecember 2, 2011 at 9:56 PM

    At the same time, brother, how do you get the support/resistance line? I am talking about the yeollow Line. Is it EMA/SMA/? and for how many days? Thanks Again.

    ReplyDelete
  4. UnknownDecember 2, 2011 at 10:23 PM

    There is no thumb rules how many days and which type of moving average u will take. So, use it as per your rules. I prefer 15-25 days.

    ReplyDelete
  5. AnonymousDecember 2, 2011 at 11:33 PM

    Is it an Afl ? Or you have taken SMA & EMA ? Have u used Bollinger or Klenter band ? And did you plot volume in the above chart ? Or just used it as hidden ? Thanks in advance

    ReplyDelete
  6. UnknownDecember 2, 2011 at 11:41 PM

    Yes, it is an AFL, I took WMA. It is Bollinger Band. I did not count volume. So, nothing is hidden. I've a plan to open another page regarding how to write afl code. Every line of code, I'll explain there. Pls. give me some time.

    ReplyDelete
  7. AnonymousDecember 3, 2011 at 12:07 AM

    Thanks JC vai. I am not the same person who mentioned about AFL. I am the person who said 'Excellent Bro. keep it up. Many Thanks.'

    However brother please carry on your work. I will be very happy if you could provide us an AFL code about the topic.

    Thanks anyway.

    ReplyDelete
  8. AnonymousDecember 3, 2011 at 12:08 AM

    I thought Heineken-Ashi is a complex one..but here I see ..its quite easy candle formation..thnks JC bro..for ur effort

    ReplyDelete
  9. AnonymousDecember 3, 2011 at 12:15 PM

    Excellent. Thanks a lot brother.

    ReplyDelete
  10. AnonymousDecember 7, 2014 at 12:01 PM

    shall we get this AFL

    ReplyDelete
  11. AnonymousSeptember 23, 2016 at 10:21 PM

    pls provide afl code

    ReplyDelete

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