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

Chart Reading : Lesson - 4 (Part : 1)

Today, I will discuss regarding the Breakout. Before discussion, pls. see the Chart - 1 first :

After breaking the resistance, price went to up

When price breaks a Support or Resistance level, we usually call it Breakout. Breakout occurs with high volume and big movement.of price.

Some investors follow Breakout Trading Strategy/Technique i.e. they buy shares when price break the resistance level and sell share when price break the support level. Please check some previous chart and I hope you will find that several successful trend started after a breakout. A portion of my capital, I invest according to the Breakout Trading Strategy/Technique.

No trading system/technique is 100% accurate. So, you may sometimes caught by breakout, usually we call it - "Fakeout". Please see the below Chart -2 :

After breaking the resistance, price went to down

To overcome this problem, pls wait for the next lesson. Best of Luck!!!