How To Read Chart

pela78

Member
53 4
Here is the #ZRXUSD chart. It mixes data from 3 exchanges. Period 8h.

Green Zones - the zones where ZRX is acting stronger than Crypto TOTAL index (blue line).
Red Zone - the time where ZRX is acting weakner than Crypto TOTAL index.

We have recently the changing in relationship between ZRX and TOTAL Index. While blue line keeps horizontal movement, ZRX is printing the second strong green bar. Note:

  1. bottom line of the channel confirmed its supporting impact as price bounce up from it.
  2. we have NS+DB sequence during the change. It means - sellers dissappeared and buyers entered the market to push price higher.
What is next?

  1. we should expect reaching a center line of the channel (at least).
  2. if price will decline toward the bottom line of channel - it would mean the incapable of bulls to drive price higher in favorable conditions. Fail of bulls = Bearish indication. In this case, breakdown of bottom line should be a logical development.
 

pela78

Member
53 4
Traders often begin their path in the financial market with experiments within the Metatrader program. Sooner or later, many of them come to the conclusion about the importance of volume indicators. This is a valid argument since the analysis of volumes allows you to use the law of supply and demand and trade in harmony with the true mood (sentiment) of the market.

Then traders ask themselves whether it is possible to use tick volume. Indeed, in Metatrader, a broker supplies only a tick volume data. While real volumes are broadcast by the official Exchanges like CME, and sometimes you need to pay for such data.

So - tick volumes CAN be used. Although they differ from the real volumes from the exchange, tick volumes show the activity of players.

Take for example the forex market USDCAD.

  1. This is an example of EVRT. Look, the volumes are high, and the progress of the bulls is small. Those who can read Japanese candles will call this pattern a reversal. A long top-shadow confirms the weakness of EVRT, and shows the presence of massive SELL-limit orders (hidden weakness). Starting from this level, we must assume the beginning of the distribution phase in this market.
  2. SLKT. False breakdown of the previous local maximum of the day. This indicator (3) shows stop-loss levels. They were knocked out. A large surge (4) in volume indicates a high activity inside this candle. But if this activity was genuine strength, why did the next two candles close lower? This is a bearish indication.
  3. Here we have an attempt to grow candles in the SLKT area. But the volumes are low. Most likely this is a weak demand ( ND. )
You see, tick volumes are capable of telling a story. And the summary is this - bears so far control the level of 1,317. To overcome this resistance and continue the up-trend started in the candle (6), the market needs a Shakeout. Very likely, with a false breakdown SLKB of the stop loss level (7). So far - a little more negative than expectations of rapid growth.

 

pela78

Member
53 4
Consider the situation in the LTCUSD market.

I use the daily chart from the Coinbase exchange.

On July 10, a downtrend started, it developed in a classical way within the downward channel (shown by red wave lines). The price fell under the round level of $ 60 per coin. Then interesting events began.

  1. A bearish breakdown of the level of 60 dollars per LTC provoked some panic on September 24th.
  2. What happened the next day? Large volume, but the price is not reduced.
  3. Again, a large volume, but the price is not reduced. Bars 3 and 4 are both EVRBs (despite they have different colors). This means that a large interest entered the market and began to absorb the coin at a bargain price, using a panic sales flow.
  4. Sales pressure has decreased. This is a weak suggestion. NS.
  5. October 23. SLKB, a bear trap that slammed on October 25th. October 25th should be considered as DB.
Thus, we have Panic + EVRB + NS + SLKB + DB - total we have a sequence of 5 signs that tell the story of accumulation in the region of $ 55. The story seems true.

Latest events.
6) The price increase on November 4 after reduced activity in the last days of October (and the first days of November) should be considered as the pressure of buyers (DB) after a period of indecision caused by a shortage of sellers.

So. Given all of the above, the bearish red channel is under fire. Using a base in the region of $ 55, buyers have facts and potential for breakout and subsequent growth.

Thanks for your attention.

 

pela78

Member
53 4
We’ll open the daily chart XAGUSD from OANDA.

The #silver market is more bearish than bullish. And here’s why.

  1. This is an SB - sales pressure bar. It formed yesterday, November 5th. But what is important. It was an attempt to rise before SB. On October 31, a price increase began. But look at the volumes. They are exhausted. The weak activity was associated with a shortage of buyers above 18.0. Now we know this for sure.
  2. These are local lows around 17.50. There was a large concentration of stop losses. The current price has already activated them. The balance of buyers and sellers has changed. Therefore, the rate of decline should decrease.
It seems to me that silver will continue the bearish trend but at a more measured pace. We have a support zone below about 17.0. It formed on the twentieth of August when the NS + DB pattern appeared on the chart. It already provided support. There are no clear arguments to claim that it will not act as support in the future. The first target for bears is 17.20.

 

pela78

Member
53 4
On October 26, the BTCUSD market had super-increased activity. This happened under the influence of news from China. What followed next? A narrow sideways dulness in which signals are not read very clearly. Nevertheless, we will try to do it.

After SLKT above 9600, …

  1. Local panic (hidden strength signal) under the round level 9200
  2. NS (lack of sellers)
  3. This bar looks like a DB. what’s interesting - we have fresh signals of Panic (1) and NS (2), on the background These facts give more strength to DB (3). This DB is a good time for the bulls to resume the positive trending. However…
… 3 red bars in a row followed next. The bulls did not use their chance.

  1. As a result of failure of bulls, an ND bar appeared (local lack of buyers). And then - it is a wave of selling pressure (red line).
The current situation is more bearish. But it can change quickly due to the fact that the market is sluggish and is moving sideways. Let’s see if sellers can push the price through the long red support line. They now have every chance for this.

 

pela78

Member
53 4
In my postings I use 10 Chart Reading Sings:

  • weakness: EVRT, SLKT, ND, SB, FOMO
  • strength: EVRB, SLKB, NS, DB, PANIC
What is important - there is a logical and rational place for the appearance of each of these bars. I am talking about the general market context. How one particular bar fits into the general market sentiment.

Let’s look at a good example for the appearance of an EVRT bar. Data from USDCAD market, 15m TF. This is a sign of weakness that occurs at almost every peak in the market.

  1. We had a large number of buyers in profit. This means that the market is not very happy to grow up, because the rising price will further increase the profits for bulls. Therefore, day traders (who want to trade against the Crowd) can plan shorts. Although this may seem risky, there’s no chance to get away from risks if you are trading forex. The main thing is that the risk should be justified and limited.
  2. Then there was a bullish breakout. The number of buyers’ profits surged even more. The likelihood of some decline has increased. At what level do you plan shorts entries?
  3. The Stop Loss indicator gives a hint. Here sellers set protective orders. And the cruel market will probably want to trigger them, before starting to decline. So there is an idea to sell from this level.
  4. And when the market reaches this level (actually - 1.3236), then we have EVRT. Narrow range, volume increased, no bullish progress. Please note that the previous bar made more bullish progress on a relatively smaller volume. Therefore, we can state the appearance of a signal of weakness. Professional sellers used this penetration of the previous high to open more short positions. The next bar closed below and gave confirmation.
  5. There is a surge in volume. Well, let’s assume it was a good quality demand (signal of strength). If so, why is the closing price so low? And why the next bar has a wide spread and close at a minimum.
Okay… The chart told us the story of the bearish reversal. Late buyers participated in it. As well as sellers who were shaken out of positions on the eve of the decline. Keeping short-term longs in such a situation becomes dangerous.

 

hatemypips

Well-known member
469 33
Shift chart by one second and you may see completely different candles for basically the same period, open, close, high, low. So what do you read then? Maybe simply selling your courses :D?
 

pela78

Member
53 4
Distribution example on the USDJPY market

This is a small-scale distribution on TF 1h.

  1. Buyers receive an increased profit from rising prices. Everyone wants to be buyers. However…
  2. Look at the dynamics of prices and the relationship to volumes. Growth slows, but volume remains high. EVRT. This means the resistance (by professional Limit sell orders).
  3. SB. Supply Bar after a bar of indecision. Selling pressure confirms the weakness at 109.40.
  4. After this elegant SLKB, the market receives a bullish momentum.
  5. However, look at activity on growth after SLKB. This is no demand. The Chart says it is too expensive to buy.
  6. However, inexperienced traders enter the long. Perhaps they use the signals of their lagging indicators.
  7. The trap for buyers slams. The market drops sharply at high volume. This is SB, as well as a bearish change in the character of market behavior.
  8. Wave ND.
  9. Wave S.
  10. Buyers (they were recently in the majority) close at a loss.
Actually, you can play a short raise. In favor of this idea you have minor bullish arguments:

  1. Bounce from the downward channel line
  2. Activation of stop-loss buyers at a level that shows a blue thin horizontal line.
But buying is a high-risk idea as there is a zone of weakness on top. Assess your chances.

Hope this review has been helpful, thanks for reading.

 
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pela78

Member
53 4
Why the gold market is near support.

Let’s draw on the facts from the chart

  1. We have 3 balance zones. They are marked on the graph with purple profiles. profiles look like Gaussian Bell (normal distribution). Each next profile (auction) is lower than the previous one. The balanced price in the first profile is 1490. In the second - 1470. In the third - 1456. The balance zones are omitted. But look at the rate of decline. The first time we went down $ 20. The second time - by 15. The decline slows down. That is, seller pressure exhales.
  2. Look at the volumes that I highlighted with arrows. This is a big advantage in sales. But as we can see, they did not lead to a significant drop in prices. This means close support. If the market does not fall after a surge in sales, he has found support.
It seems to me that if this support is at the round level of 1450, then we can see a false breakdown of 1450 and then a quick recovery.

 

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