Friday, February 22, 2008

Trading Is Simple But Not Easy

Trading is simple; but its not easy... Price will move with money flow... So you must follow the money flow...

The best way to detect money flow is by follow the trend... normally big trend (4hr and above) will ruled the flow... Small TF less than 4hr rarely to sustain more than 24 hours.. That the reason why the calls this TF as intraday...

The best way to determine the trend is by looking at naked chart... Look at the right side of the chart and determine the swing price... If you see series of higher high and higher low.. then the trend is up... If you see series of lower low and lower high.. then the trend is down...

Normally trend is mature or end after you see:-

1. Price breaks neckline of Double Top... so the new leg for new downtrend start from there...
2. Price breaks neckline of Double Top.. so the new leg for new uptrend start from there...
3. Price breaks neckline of Head and Shoulder pattern... so the new leg for new downtrend start from there... reverse if you see inverted head and shoulder...

This three chart patterns is powerful patterns that give sign of trend change... and there is high chance you see new leg trend... This is trend change pattern...

Do not confuse with candlestick pattern... Eventhough candlestick can give reversal or continuation of trend; but its only for short term.... So candlestick provide short term price continuation or short term price reversal.... Trend still intact....

That the reason why.. if you can use candlestick pattern in direction of TREND... this will provide very powerful signal...

If the TREND is BULLISH... and you see candlestick reversal pattern at support area... this is the best time to open buy position....
If the TREND is BULLISH.. and you see candlestick continuation pattern at resistance area.. this is also provide best entry price...

Apabila nampak chart pattern suggest trend change... maka kita akan berdepan dengan opposite trend.. dan opposite trend nie confirmed apabila anda nampak series of bullish or bearish...

Apabila anda nampak candlestick pattern... ia cuma suggest short term price change dan bukannya trend change...

Satu group lagi chart pattern ialah:-

Ascending Triangle.... dimana price akan break RESISTANCE ZONE... untuk Bullish...
Descending Triangle... dimana price akan break SUPPORT ZONE .. untuk Bearish...
Asymetrical Triangle.. dimana price boleh break samada upper trendlines untuk Bullish and lower trendlines untuk Bearish...

Apabila price sudah sentuh dua kali.. samada zone atas atau zone bawah; sekiranya price berada di zone above 50% fibbo... maka sila monitor price and wait for confirmation of breakouts...

Remember.... the best pattern ialah pattern yang wujud in direction of main trend.... So jika 4hr trend ialah Bullish.. and you see Double Bottom... its good time to open buy position dan sebaliknya....

We focus trend on 4hr and above....

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