Special Edition #5: My Charts
I planned each charted course, each careful step along the byway And more, much more than this I did it my way.
In leiu of a typical Thursday post I’ve decided to do an overview of my charts. I’ve gotten some feedback from folks that I think is important to address before I move on.
Today I’ll cover my preferred chart setup and what all the things and words mean. And it’s in video format too!
Introduction:
Bar/Candle Charts:
My preference is bars over candles unless I’m really zoomed out with lots of history on the chart.
Horizontal Support/Resistance:
I’ve made a couple of videos about drawing support and resistance. Watch those later.
*See the footnote.* —>1
High Volume Area:
This is a murky concept to plot and is mostly just a gut feel kinda thing. I don’t really have guidance on it so I’m just letting you know what it is if you see it on my charts.
Trendlines:
Trendlines are in my opinion largely psychological and made true as support and resistance because many people see them and plan to do things around them. Often times price can blow right through them so always pay attention to candle patterns and oscillators when the price is around trendlines to indicate whether there will be a reversal or not.
Broken Trendlines:
Drawing these is not entirely necessary. I just keep them up for reference.
Moving Averages:
Moving averages are mostly used to define trends for me although they can also provide trade setups. My preferences lie with the Exponential Moving Averages, primarily the 50 EMA.
RSI:
I’ve been testing out a variation on the RSI for trading that looks promising but my preferences for analysis with price action oscillators are Momentum (Mom), Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Commodity Channel Index (CCI), and Detrended Price Oscillator (DPO). These are all momentum-based indicators so they are considered LEADING indicators. They indicate what potential future price action will be. This is in contrast to LAGGING indicators like moving averages that reflect what price has done in the past and are useful for confirming trends.
Outro:
I hope this makes it easier to follow along. See you in the Sunday Synopsis later today!
@theprivacysmurf