Chart Reading : Lesson - 3 (Part : 4)

Throughout our Lesson - 3, we are discussing identifying Market Trend (Up Trend/Bullish, Down Trend/Bearish and Sideways) manually. This post is the closing of the Lesson - 3.

Usually, we like the Up Trend or Bullish market because it gives us profit.We dislike the Down Trend or Bearish Market because it gives us loss. And we feel safe in sideways market because at least, share price is not going to down.

Why we dislike the down trend market? Because, in down trend market, our view is short term, we hold shares and hope that market will rebound soon and gives us a big profit. So, we can't able to cut the loss early and finally, we carry the small loss to huge loss.

If we can able to cut the loss early, we will also enjoy the down trend as like as up trend. We will only dislike the Sideways market because it will give us nothing. I'm finishing this post by a famous quote :

"Winners hold their winning trades, losers hold their losing trades."

Chart Reading : Lesson - 3 (Part : 3)

In our previous two lessons, we saw how to detect the Up Trend/Bullish market and Down Trend/Bearish market manually. Today, we will see how to detect the Sideways Market. It's easy.

When you will not able to detect the Up Trend market or Down Trend market, you may sure that you are staying in a Sideways market. Please see the below chart :

(Pls. click on the image to enlarge)

In Sideways market, you will not able to detect several confirmed HH-HL or LL-LH. We always avoid this market. Because we will not play for nothing. For details pls. wait for Chart Reading : Lesson - 3 (Part : 4). by JC

Chart Reading : Lesson - 3 (Part : 2)

In our Chart Reading : Lesson - 3 (Part : 1), we discussed regarding the identifying Up Trend/Bullish. Today, we will discussed regarding the identifying Down Trend/Bearish. Please see the below Chart :

(Pls. click on the image to enlarge)

After a bullish or Up Trend, if you find that price is forming Lower Low (LL) and Lower High (LH) one after another, you can say it Down Trend/Bearish.

When price form a Lower Low (LL), please don't be Panicked for Sell. Market always gives you a chance for Sell by forming Lower High (LH). Yes, the Lower High (LH) is your EXIT/Sell point.

Precondition of Lower Low (LL) and Lower High (LH) : The LL or LH must be below the previous LL or LH respectively. Please check it with the above chart. by JC

Chart Reading : Lesson - 3 (Part : 1)

One of my previous post, I discussed regarding the Market Trend and I showed you how to detect the market trend by Bollinger Band. The Link is http://dse-analysis.blogspot.com/2011/10/market-trend.html. Throughout our Lesson - 3, we will detect the Market Trend manually. A Chart Reader should have a ability to detect the market trend manually.

Please see the below Chart :

(Pls. click on the image to enlarge)

If you find that price is forming Higher High (HH) and Higher Low (HL) one after another, you can say it Up Trend/Bullish.

Precondition of Higher High (HH) and Higher Low (HL) : The HH or HL must be above the previous HH or HL. Please check it with the above chart. by JC

Market Trend

Today I’ll discuss regarding the market trend. Usually, we see three types of trend in the market. Up or Bullish, Down or Bearish and Sideways market. I think you know very well regarding these. So, I’m not going to give any definition. But how do you indentify these?  It’s easier to identify it by chart. I’m sharing my view with you. I use Bollinger Band (BB).  Please see the chart.

Where you will get this band? If you use any charting software, you will get Bollinger Band with your software. Or you may go to www. Sotckbangladesh.com

Now you understand that  – When you will buy? When you will sell? and When you will watch the market? Chup chap bosey thaka-o ekta trading policy. by JC