How To Read Chart

[pela78]

This is #AAPL #stock, yesterday Price & Volume action, intraday fast TF. I use this chart to illustrate the principles that do happen in every market.

The average trader can see here Head and Shoulder's pattern. What does Chart Reader see? Up-Waves with exhausting of Bull's power.


1) The first up-wave collects 574k of Volume
2) The second up-wave collects 301k of Volume

3) The third up-wave collects 243k of Volume


The Volume on up-wave diminishes. It means the Exhausting of Demand Power. As a result we got "P" formation on the profile. What is the inner working? 1st up wave attracted FOMO buyers who wished to follow the rise of price. Professional traders use the FOMO surge in order to establish shorts. Study the clusters. If the busi trading activity above 219.30 does represent the real strength, market should pump. But it did trade in the range. So, "P" profile is the hidden Weakness.


And the appearance of Sellers is a moment when retail bulls found themselves in bad positions. The appearance of Supply after No-Demand sign - is a signal to short. This is a way to trade in harmony with market.


So, does SHS have more sense now?

 

[heavenskrow]

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.

LOVE this.

 

[pela78]

Here is the intraday 5m cluster chart (or footprint) of #AAPL #stock. It introduces SFDB principle.

The described principles below are valid for other markets/TF. Just think how people lose money - and charts become more full of sense.


1) market forms minor low. People tend to "hide" their SLs under low such this. Minute by minute, the number of SLs are growing there. When market "see" the number is big enough, it...
2) ..drop right there. This is an SLK - stop-loss-killing action.

3) And one more shot to kill more SLs.


4) Here is Demand wave: a) green clusters b) strong close c) breaking resistance. Plot SFDB on this level. Market should find support around 2019.80-219.90.
5) Supported.


6) This is a Trap for bears. Not very obvious. But study the price action. It was several bars of decline. Indicators encountered people and bots to sell. But what we got soon?
7) Demand bar. This DB was powered by SFDB level.


Market closed at 220.70. Just imagine the emotions of buyers who were knocked out from positions at points 2 and 3.


From the short-term picture, market is bullish while price is trading above 220.10-220.20.

 

[pela78]

Is the current VETUSD (crypto) strong?

Well, technically we have a balance A-B, It was broken up by the surge of demand (point 1). Moreover, price is holding above SFDB line (point 2).

But personally I am skeptic about current rally. Look at the bottom. We have green-red indicator. It represents the balance between Bids and Asks. If those bids are fake? What if they can be withdrawn in one moment? If those bids are real, why is price moving so slowly in upward direction? The high A was gained easier?

So, we have buying signals on this chart (for example testing SFDB line), but personally I do not feel the confidence to follow them. The high above C looks as the SLKT Trap.

 

[pela78]

Yesterday I wrote about my skepticism related to VETUSD market. Actually, it made a step down as other Alt-Cryptos.
This post is dedicated to EVRt sign. I pick ETCUSD market to outline this sign in better details.

Study the behavior of price /volume when the market did reach blue circle level. Think about the volume as the quantity of effort. And measure the result on the price axis. You can make a suggestion - bulls have spent a lot of efforts to push the market higher, but they did gain small progress. Market profile forms a shape of "P" letter. And how can the inner working be described? Professional traders put a lot of SELL-Limit orders above high A. That is why we have big volume and a small bullish result. This is a sign of EVRT (Effort Versus Result at the market Top = a sign of hidden weakness).


Note the following response.

a) Price formed short term balancing wedge (blue lines)
b) Bearish movement - price decline amid rising volume (red lines).

This change in character confirms the weakness in EVRT wave.

What is next?
1) Huge volume down-bar could be interpreted as the attempt of market to shake out weak holders (hidden strength)
2) Price broke up in the upward direction from the balancing wedge (confirmation of strength).
3) Plot the SFDB around at the breakout level. While the price is holding above SFDB - intraday traders have the arguments to play in the bullish team.

 

[tommcginnis]

Don't we have a vulgarity rule around here???




["Effort of Bulls!" Really??? Did he really write that?!? ]

 

[pela78]

Don't we have a vulgarity rule around here???

["Effort of Bulls!" Really??? Did he really write that?!? ]

I wrote:

"Effort of bulls (signals on buying), but personally I do not feel the confidence to follow them. The high above C looks as the SLKT Trap.."

Because the number of buying signals increases in minor TF (Welcoming into Trap) before major "sudden" down-bar. I hope my thought was clear - I am a skeptic to enter longs.

Thanks for following my thread.

 

[pela78]

It was a poor morning for #GBP #GBPUSD. We have a very clear indication of weakness above 1.255.

Falling price is entering the Zone of Support @ round number 1.25. It should produce some sort of bounce up. But Read the Chart. We have a lot of weakness overhead. Definitely, it will be hard for bulls to extend bounce up move into sustainable up-trend.

 

[murray t turtle]

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.

%%
Mostly true; but I have gotten plenty of good buy sell/sell buy help from Investors Business Daily/Weekly,newspaper but NONE of that real time.[ Your sentence; ''always seems to be on right side of market''= CNBC comedy] As far as after closing bell 99% of CNBC = useless; couple of exceptions, IBD founder +Jim Rogers can help you, maybe.

IF you ever find someone that ''always seem to be on the right side of the market ''- you could own the world in a short time; buts thats not the way markets work @ all.Good post....................

 

[pela78]

Nasdaq Stock Index Wide Picture Overview

I use daily TF, data from CME, futures market.



I did divide the chart into components - waves. Let's analyze every component and combine them into the opinion.



A) Upwave 10/March-2/May. This upwave formed a busy trading range (1) around 7375, and culminated on 7850 level (2). We can see a spike in profile (2), this is a distribution stage. I believe, news was good. And professional operators unload their holdings onto buying rush of FOMO public.



B). Downwave started on Monday 05/May. We got 4 red candles in a row, the first time for a long time. Volume did increase. Declining price amid falling price - is the typical bearish behavior. If Chart reader were able to detect the distribution range at the top of up-wave A, this decline did not make a surprise for them.



Note, price bounced up (3) from profile spike (1). But we can see ND sign (lack of buyers) at the top of bounce movement (15/May). As a coincidence, the supply did arrive on 16-19/May.



Downwave B Culminated in form of Panic volume spike and Fake penetration (SLKB) of the low of the up-wave A. Many investors had to turn bearish (enter shorts) because their systems detected the first lower low. But it turned into the Trap for them.



C) The general shape of up-wave C builds the vision of the letter "P". We have a lot of volume at the top of the wave. As you can see, profile spots the spike at 7950 level (4). How can we interpret it? Another range of Distribution? Oh yeah. Market penetrated the top of the up-wave A. Many investors had to turn bullish (enter longs) because their systems detected the higher high. But it turned into the Trap for them. 25-28/July were No-Demand days.



D) On 29/July, the new Supply-wave did start. It culminated (Intraday Panic Selling 05/Aug) at the level of horizontal spike (5). That downwave formed shape with profile spike 7475 (5). Later. this level was tested (6). And after SLKB Trap on 25/Aug (7) ...



E) ...a new up-wave was started by Demand Bar on 4/Sep (8). But as you can see, the character of the movement is not very speedy and easy.



So, what is the judgment?



We have HEAVY supply around 8k level. Despite the market is trading within the current up-trend wave, IMO, bulls have no enough power to overcome 8k Resistance soon.