Post by account_disabled on Mar 9, 2024 4:34:33 GMT -5
If the trend is not defined, it will be difficult to talk about both the right direction and the ideal time to enter the market. Therefore, today's article will be dedicated to constructing trend lines and their application within the VSA model. This article is the continuation of a series dedicated to Volume Spread Analysis. Previous articles are here: Masters of the market. Part 1 , here we looked at the basics of how the market works, the impact that big players have on price movement, as well as learned how to determine market strength. How to read the market? Masters of the market. Part 2 , here we saw demand shortfall identification, supply testing, push up through supply.
Today I will show the following market reading Mexico Mobile Number List techniques: Construction of trend lines extreme points Trend lines and perceived value Definition of the overbought and oversold level Jump through support and resistance level Absorption volume and lower trend lines Why are trend lines necessary? Determination of the main direction of price movement. On average, about a third of the time markets move in a common direction or trend. By determining this direction, you will anticipate how the price will change shortly. Identification of sudden changes. A strong upward movement will often be followed by a strong movement in the opposite direction. Definition of support and resistance levels. Price bars often bounce off trend lines.
Therefore, by plotting the trend lines, you can simultaneously determine the support and resistance levels. Rules for building trend channels For a bull market, two lows and an intermediate high are used. Accordingly, in a bear market to build a channel, we use two highs and an intermediate low. LiteFinance: Trend analysis: construction and reading of trend within the SA model | Litefinance Example of building a downtrend channel. The highs and lows at which the lines were built are circled on the chart. What trends should be taken into account? Trends can be long-term (major), medium-term and short-term (minor). A long-term trend should be considered as the basis for choosing the type of trend. At the same time, the medium-term trend is perfectly combined with VSA analysis techniques, making it possible to identify optimal market events in terms of frequency and intensity.