How To Read Chart

OK, let's do update for BTCUSD. I use Bitfinex clusters, UTC time.

267783


First of all, what is the context? Price has been moving inside balancing triangle/wedge AB for several days. (Note, it entered the wedge after falling - this fact increases odds for a bearish escape from balancing wedge - this concept often discussed in classical TA).

Second fact - SLKT above 8300. I pointed attention on this Killing of SLs of sellers (and trap for bulls) in Tradunity Main Telegram Chat (see screenshot).

So, we had the more weakness on background - this is context. What we had next?

1) Supply wave
2) Supply wave culminated in for of Panic at the level of line B (bottom/support level of balancing wedge).

3) Yes, this is EVRB (small progress for bears)

4) NS (lowering of volume on the level where Panic+EVRB were detected)

5) With a minor sequence of Strength (Panic+EVRB+NS), Bulls tried to push market higher.

6) But their power exhausted quickly. This is No Demand (low volume attempt to go up caused by a lack of buyers). Note, ND appeared just at 50% half way back of decline from SLKT 8350 to Panic 7950

7) SB (I'd like to see higher volume) and confirmation of ND. Bearish Cha Cha. Chart tells you market changed its sentiment. Holding longs became very risky as buyers were not ready to push market above 28/09 SLKT.

What's next?

8) An attempt of bears to break down big AB wedge. Volume was extremely high.
9) This bar tells that bearish attempted was about to fail. Because a lot of activity of this bar was registered above the body of minor balance CD. This is bullish sign and chart tells that bar #8 is likely to be a Big Trap for bears with killing SLs under 26/Sept low.

So, as #BTCUSD is trading above 7900, I expect an attempt to break out line A.
 
Here is a Setup for Shorting. It uses the oil market but works fine everywhere. As described below setup based on a cruel market nature.

I call it the Test_Of_RFSB. Here is a fresh example in the same market.

267810


The first chart is telling the global view (1 candle = 1500 ticks). You can see on chart #1:
1) the breaking down of line A.
2) consolidation zone after break-down of A
3) development of the Selling Wave with big bearish effort around 59.40. Plot RFSB here.

The idea behind the testing RFSB - is to knock out bears who joined the selling wave from good positions. Test means that -> the market makes back move up in order to trigger SLs of bears placed around the breakeven level. As you can see on the profile, we had a spike of activity at 59.40 level. So, point #4 - is the "test" of RFSB and knocking out sellers from a falling market.

Now, look at chart #2. This is footprint (1 candle = 144 ticks). We need to find the best moment to open a short position.

267811


1) Abnormal Buying during testing of RFSB on faster TF. Green Clusters = Many Existing Shorts are Stopping-Out. Market Fooled that Sellers. Thereby, it lost its interest to go further up.
2) That is why selling pressure appears (Pure Genuine Supply). Price starts to decline amid the red Delta = bearish behavior.

A period of transition from 1 to 2 = the rational moment to enter shorts with applying your personal Capital Management Rules.
 
In the last overview about #BTC market (posted 2 days ago), I wrote:

So, as #BTCUSD is trading above 7900, I expect an attempt to break out line A.


Since that time, price increased from 7900 to 8200. Let's do update.


267813


1) After break-out of line A...
2) ...price did advance up to 8400. Study carefully the character of up-wave in point 2. It consists of 3 up-bars. Every next up-bar has bigger volume than the previous bar. And every next bar has smaller bullish progress in comparison with the previous up-bar. This is EVRT - big Effort Versus small Result. EVRT tells about Supply swamping Demand. Sellers activated above 8400.

3) This is SLKT - stop-loss killer at the Top. It: a) knocks out sellers who placed their SLs above the high of Point 2 and b) involves bulls in buying. This is pure manipulation. That is why you can see...

4) ... fast decline after SLKT pump bar. The chart tells, market is not interesting in holding above 8400 figure.

5) SLKB brings some bullish impulse to market. But it seems, buyers will not capable to develop a powerful pump and breakout 8400 resistance.


IMO, negative sentiments are growing again.

Any questions?
 
Yesterday, I've posted messages in Telegram Chat about gold
I wrote:
market is not interested in moving higher. We have to expect some sort of decline.

Let's look at this market with a more detailed view and analyze how the situation has developed.

267991


I use ATAS software, a tick chart from Moscow exchange.

1) This is a pumping upmove from yesterday. I judged it as an SLKT and starting the shape of weakness formation. Note "P" shape. It means a lot of activity on the top (around 1524 level). This is a typical behavior for the weak market. You can describe it as EVRT (small Result for bulls Versus high Effort on the Top), or a wall of SELL-LIMIT orders met up-wave.
2) As a consequence of Supply Entered the market, price started to go down. This is the second stage of the Shape of Weakness formation.

After slow sideways movement on Friday, we got...

3) ..News Event spike during American Session. This is another up-movement in fake direction. This up-bar diversion: a) knocked out bears from good positions, and b) attract buyers in Trap
4) Decline with breakdown of support line

Believe or not - On Thursday, professionals & Insiders were aware of Friday news effect. That is why they managed to prepare themselves.


5) Actually, here is minor SLKB (triggering of SLs under the previous minor low added bullish impulse to market). However, I do not expect gold price will continue to rally above the Thursday tight range & high of today's event above 1520.
 
Intraday Bullish Change in #BTCUSD market.

268105


Line A - is major line of support. It can be clearly visualized on TF like 1h-4h.
Now study the behavior of the Price/Volume on down-waves 1-2-3

1) Panic Volume + Wide Fearful Spread (attracting the public to sell)

2) Big Volume + Small result for bears (only SLKB actually).

3) No supply wave. Very little volume on the decline.

4) Demand Bar

5) Small NS bar

6) Another DB.



In sum, we got PANIC+SLKB+NS+DB+NS+DB. After first NS+DB holding shorts became risky as the market demonstrated exhausting of selling pressure on 1-2-3 waves. That gives an idea that the Support line will be unbroken (for a while).
 
This is a post about Stop-Loss killer, it happens everywhere, not only on #oil.

268230


When public bulls look market goes up #1, they go long and place SL under the low of #A.
Then SL-killer comes in #B.


When public bulls look market goes up #2, they go long and place SL under the low of #B.
Then SL-killer comes in #C.


This is a cruel character in every market. Only a business.
Note a spike of volume on clusters. This is knocking out sellers.


If you really want to join the bullish team, cluster #3 could be a signal for you. Buying here has arguments:
1) cruel market lost interest in going lower because it has triggered many SLs of buyers already

2) M5 profiles show the growing POC - it confirms the interest to go higher.
 
#ACB #stock market is developing in the down-trend stage. However, the character of down-move 1 could be interpreted as the Panic selling wave. Now we have to get a confirmation from the Chart. The lines of downward trend channel should produce bearish movements 2 and 3. If the Cumulative volume on that down-waves will decrease in comparison with Panic wave Cumulative volume - then we will get more facts about the accumulation of cheap stocks around level 4.0$
268237
 
Today I wrote in the Telegram Chat:
ZRX broke above previous major high. I believe in Correction. The progress of wave A was quickly nulled.
268323


Actually, as you see in hindsight, it was a clear manipulation:
  • #FOMO wave has extremely size of volume. Extremely high volume on up-bars = hidden weakness.
  • #SLKT above the #FOMO waves – additional Trap of smaller scale (intraday size)
So, the current trading range is developing in the format of the #distribution stage. That is why I do believe, #ZRX #cryptocurrency has negative sentiments
 
Example of Judging the #Bitmex #XBTUSD Market Action using the Price and Buying/Selling Volume

268408


We Have 3 downwaves A-B-C. All downwaves were finished around 8475.

1) Study the Profile of Each wave - They have "b" Shape.
2) Study the Selling Volume - We have a lot of Spikes in red Delta and Red Clusters around 8475.


So, we got signs of hidden strength around 8475. It seems that Professionals Accumulated the falling flow of coins using Buy-Limits.


Study the wave D. Here where Strength turned Real. We have breakout above the resistance line.


So, Bulls are producing big efforts to push market up from 8475 level. If they fail, this level will act as resistance.


OK, this all great. But how you can trade this situation?


Turning delta from red to green (circled blue) around SFDB line - is a rational setup to join the bullish campaign.
 
In my previous overview about #Gold, I wrote this maket did trading in the range of balance between 1500-1520 levels. As a result, we got the formation of a big "bell shape" in market profile (left side indicator).

268496


Yesterday, we got the first clue about future direction with the breaking of minor blue support line.
1) Selling of pressure to break down the minor blue support line


At the opening of today's session, chart confirmed the market's intention.
2) Trap for bulls at the opening of the session (I use data from Moscow exchange, futures section). Green clusters represent: a) buyers are entering Trap b) sellers are knocking out from good positions

3) Another portion of genuine Supply (Selling Pressure).


So, Buying Culmination + EVRT on 03/Oct revealed its power - the Market broke down 1500 level. It should act as resistance. Sentiments are negative. Next week should produce the development of decline. Breaking out above 1500 with the bullish style will invalidate the bearish course.
 
268558


The wide green up-bar (the third from the right edge) was a test or fresh minor zone of Weakness after the second SLKB.

Studying the volume/price action on a fast TF chart (right side) confirms the Supply on slow TF has activated. This Supply comes from old High (line A). So, the down-move toward center-line B (dotted line) should be a reliable expectation.
 
3 weeks ago I wrote in my Telegram about #ZRX
the chart make-belief, ZRX can produce more surprise in the future.

Since that time this crypto did advance from 0.21 up to 0.34. And it continues to climb higher.

268632


Actually, I became skeptic about the continuation of rally when price penetrated previous high 0.2666 (1). It did look very close to fake-breakout. The penetration (2) of previous high (1) with ND+SB sequences (Supply Bar after No-Demand bar) had also bearish impression. But look what did happen next.

Very low volume range (3) below 0.2666. If this low activity was caused by lack of sellers (NS) - then we will get a confirmation from upbar with rising volume - DBar.

Here is it !(4). It confirmed the low-volume range #3 as the Zone where lack of sellers was found. The market changed its character (Cha Cha) into bullish mode again.

The next signs confirmed strong character:
5 - No supply
6 - Demand bar
7 - No supply
8 - DB, but volume is extremely high (sign of hidden weakness).

Breaking out above 0.3 round number attracted rush of FOMO buyers. It is great moment to close big longs and start distribution. However, it is too early to suggest Major Reversal down.

While price is holding above 0.3 green line - market is sending a bullish indications.
 
On the right side, you see 3d #gold chart, a lot of volumes arrived on up-bars in the first half of August. Too much volume on up-bars - is a sign of Hidden Weakness as professional money get an opportunity to close big blocks of longs and spread gold contracts over the buying rush of FOMO public (retail traders). Ths spike in Google trends data confirms the FOMO sentiments. So, if the get the first sign of major distribution range, then what the bearish responses?

268715

1) price can not bounce up from line B and drop to line C.
2) we have a red zone of weakness, it has built from the big Supply Bar. ZOW rejected price down.
3) study the profile of up-wave in the first half of October. It has a shape of "P". Bearish indication.
4) Price declined below the POC level of up-wave in the first half of October. Bearish indication.

Takin into account considered facts, I believe if gold will break down line C, it will reach D.
 
The Concept of Breakouts

Sometimes in my posts, I use the word breakout. Let me clarify what meaning I put in this term.

Simply talking,

-> breakouts, bullish breakouts - is the process of the successful crossing of resistance line. Price struggles above resistance (or zone of weakness) and does not move back.
-> breakdowns, or bearish breakdowns - is the process of the successful crossing of support line. Price struggles below support line (or zone of strength) and does not move back.

-> fake breakouts, or traps for bulls - is the process of false crossing of resistance line. Price attracts traders in longs, because they think the advance will continue. Unfortunately for them, soon price moves back.
-> fake breakdowns, or traps for bears - is the process of false crossing of support line. Price attracts traders in longs, because they think the advance will continue. Unfortunately for them, soon price moves back.

Let’s go to an example.
In the morning I’ve posted this picture in Telegram:



Here is the original big picture


My goal was to turn your attention to following idea:

After period of dullness (flatty sideways movements), traders and trading bots become sensitive to breakouts as they desire to open trade at the very beginning of the planned trend.

Now turn to cluster chart. Red clusters - executed SELL orders, green clusters - executed BUY orders. Below the clusters - delta indicator, it shows the difference between BUYs and SELLs


  1. The balancing wedge, or the zone of dulling flat. We got resistance line above range, and support line below the range. The profile forms the shape of a gaussian bell. Which way the market will move from it? Here is the clue comes…
  2. Trap for bears started to form here. You see effort of sellers (red clusters) to breakdown the support.
  3. Price quickly reversed. Green clusters point on buying. Trap formed. It increases chances on genuine bullish from initial balance.
  4. here is mentioned bullish breakout (effort of buyers to overcome resistance).
Setup worked fine. And it works fine often.

Hope, this post was helpful to understand the concept of breakouts.

Thanks for following
 
I see the exhausting of uptrend on #USDJPY market and here is why:

1> the decreasing of the bullish progress
2> EVRT. The tiny range on up-bar with volume above average. This is a hidden supply.
3> No demand
4> SLKT (Trap for bulls) Note price did not reach a top line of the up-trend channel.

Some support should arrive from center line. But nevertheless, In described conditions, I expect the breaking down the center channel with reaching the bottom line.

 
xcSqDGZ[1]
xcSqDGZ[1].png1550x1012 96.2 KB



AB balancing wedge is narrowing. The NS+DB sequence did show that #BTC was not ready to break down B. But this scenario remains valid as we have

  • Major zone of weakness above 9300 (from 21/Jun till 24/Sep)
  • Big SB 24/Sep
  • Fake breakout (circled blue).

The recent up-bar with big volume looks like killing SLs above 8300. Note, we have minor SB on background. Many Sellers, who entered shorts on 15th/Oct, placed their SLs above 8300. Now they knocked out. If this interpretation true, we will see a building of a Shape of weakness (Red triangle) with a new attack on line B.

Be cautious, price is moving near the center of the wedge. This is why the market is vulnerable to send confusing signals.
 
#GBPUSD is losing its bullish character

  1. I think, it was FOMO Buying culmination. Probably, some bullish news was released there. This is ultra-wide bar. Small retail traders can not move the currency rates so wide. Big professionals was active there. What was the result of that activity.
  2. #GBP was capable to reach (and even overbought) the top line before huge up-bar 1 (green). But it was incapable to reach top line of the channel after huge up-bar 1 (red circles).
  3. EVRT- sign of weakness
  4. The first Minor Bearish Cha Cha
  5. ND - No demand
  6. Supply Pressure and breakdown the support line
  7. testing the breakdown
  8. Resuming the bearish pace.
I’d like to expect the reaching of the bottom blue line.

 
#GBPUSD is losing its bullish character

  1. I think, it was FOMO Buying culmination. Probably, some bullish news was released there. This is ultra-wide bar. Small retail traders can not move the currency rates so wide. Big professionals was active there. What was the result of that activity.
  2. #GBP was capable to reach (and even overbought) the top line before huge up-bar 1 (green). But it was incapable to reach top line of the channel after huge up-bar 1 (red circles).
  3. EVRT- sign of weakness
  4. The first Minor Bearish Cha Cha
  5. ND - No demand
  6. Supply Pressure and breakdown the support line
  7. testing the breakdown
  8. Resuming the bearish pace.
I’d like to expect the reaching of the bottom blue line.

Dude, did you see the recent volatility? It can be there twice, higher and lower with this rollercoaster. Do you predict 1.2850 on 24 October, i.e. in two days?? Damn...amazing chart read (bs).
Setting such tight target where is your stop loss target? 1.2930? 1.30? I'm all ears so tell us please :0
 
When analyzing any market, the global context is vitally important.

In the case of #oil, we have:

  1. HUGE TRAP for bulls and Exploding totally sellers from market by killing their SLs. This is the starting point that produces impact over the #oil market.
  2. As a consequence after Trap we got a development of S-Wave, …
  3. …which culminated (Panic Selling moment) on 03/Oct.
Since that day, market entered consolidation zone A-B (balancing wedge).

  1. Here is a clue. Fake breakout (with an increase in volume) of line A yesterday, with a decline today.
From the arguments mentioned above, I have more bearish expectations in the nearest hours or even days.

 
Dude, did you see the recent volatility? It can be there twice, higher and lower with this rollercoaster. Do you predict 1.2850 on 24 October, i.e. in two days?? Damn...amazing chart read (bs).
Setting such tight target where is your stop loss target? 1.2930? 1.30? I'm all ears so tell us please :0
It is too risky to give advice on high volatility periods. Have questions? Ask the chart. It sends the most trustworthy messages in non-stop mode.
 
Top