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Reversal

Mastering Trading with Support and Resistance LevelsTrading with support and resistance levels is a fundamental strategy that offers insights into market psychology and potential trade entry and exit points. This guide will explore how to effectively trade using these levels, highlighting the importance of confirmation, rejection patterns, candlestick patterns, and confluence with other indicators. Understanding Support and Resistance - Support : A price level where a downtrend may pause due to a concentration of demand. - Resistance : A price level where an uptrend can pause or reverse because of a concentration of selling interest. The Significance of Confirmation Confirmation is crucial when trading with support and resistance, as it ensures that the price respects these levels before making a trade. Waiting for confirmation reduces the risk of false signals. Candlestick Patterns: The Language of the Markets Understanding candlestick patterns is essential for interpreting market sentiment at support and resistance levels. Patterns like bullish engulfing or bearish engulfing suggest strong reversals. Finding Confluence with Other Indicators Confluence enhances the reliability of trading signals. Combining support and resistance analysis with other indicators like moving averages or the stochastic RSI can provide stronger entry or exit signals. Integrating Support and Resistance into Your Trading Identify key levels : Mark clear support and resistance levels on your chart. Wait for confirmation : Confirm the level is holding through candlestick patterns or price action before trading. Look for rejection patterns : Observe candlestick formations for reversal signals. Seek confluence : Use other indicators to validate your trading signals. Manage your risk : Always set a clear stop-loss order to manage potential losses. By employing these strategies, traders can enhance their market navigation skills, focusing on managing risk and seizing the right opportunities. With patience and practice, trading with support and resistance levels can be a vital part of a successful trading approach.
Education
by AlgoAlpha
BTC - Bulls Took Over 📈Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. In accordance with my previous BTC analysis, we were awaiting a break above the blue zone or below the red zone to determine the next movement. 📈 This week, the bulls won the battle by breaking above the blue structure at 44,300. Therefore, we anticipate further bullish movement toward the 48k - 50k resistance zone. 📉 Unless the bears manage to break below the blue zone again, in which case we would expect BTC to return inside the range, resulting in a movement toward 42,000. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
2
SOLUSDT - SOL is not gonna see $100 soon$BINANCE: (4H CHART) Technical Analysis Update SOLUSDT is currently trading at $95.5 and showing overall bearish sentiment With the recently news about SOL being down for few hours added more bearish sentiment to it. We can expect the trend reversal so the SOL to continue and reach the next support line around $80 We can enter the trade when the support line is broken around 93.4 Long Entry level: $ >93.4 Stop loss: Above $102 Target 1: $ 90.7 Target 2: $ 87.18 Target 3: $ 84 Target 4: $ 80 Max Leverage: 3x Don't forget to keep stop loss. Follow Our TradingView Account for More Technical Analysis Updates, | Like, Share and Comment Your thoughts. Cheers GreenCrypto
Short
by GreenCryptoTrades
9
DYDX - Enjoy The Ride 🚗Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. 📈 DYDX has been overall bullish , trading within the rising channel in blue. Currently, DYDX is undergoing a correction phase and it is currently approaching the lower blue trendline. Moreover , it is retesting a strong support zone marked in green. 🏹 Thus, the highlighted blue circle is a strong area to look for buy setups as it is the intersection of the green support and lower blue trendline acting as a non-horizontal support. 📚 As per my trading style: As #DYDX approaches the blue circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Long
by TheSignalyst
NZDCAD - Following The Trend📉Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. 📈 NZDCAD has been overall bearish , trading within the falling channel in blue. At present, NZDCAD is undergoing a correction phase and it is currently approaching the upper blue trendline acting as a non-horizontal resistance. Moreover, it is retesting a strong supply zone marked in green. 🏹 Thus, the highlighted red circle is a strong area to look for sell setups as it is the intersection of the green supply and upper blue trendline. 📚 As per my trading style: As #NZDCAD approaches the red circle zone, I will be looking for bearish reversal setups (like a top bottom pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Short
by TheSignalyst
1
PURPLE (PRPL) may be in the process of reversal.PURPLE, yes the mattress company, has bee getting hammered for a while now. Their stock price was mile higher than it is now, but it looks like the bottom may just be in. And, it's gone down so much, compared to what it used to be, that the risk involved in investing, or trading it has decreased as well. Keep in mind that this company is extremely subject to interest rates, and interest hikes/cuts. This would probably be a good play for some mid to longer term options plays. Just make sure there's open interest in the strike if you do buy one, as liquidity is key to options trading. Good luck, and always use a stop.
NASDAQ:PRPLLong
by MetaShackle
BTC monthly UpdateFollowing the run up to all time high in 2017, we had a bear market breakdown that lasted the year. This period was followed by an uptrend after bouncing off the monthly 50 simple moving average. That uptrend broke at the .618 extension and gave way to another breakdown to test the 50 simple moving average. PA wicked below the 50sma and opened above the following month, and the bull market was on. Here we are at the .618 extension with a doji candle formation following the 2021 top and subsequent breakdown. RSI level is similar to the previous reversal area (around 65) following the 2017 meltdown. The 50 sma looks to line up well with a major area of demand. Monthly open for february is tomorrow, and im expecting the monthly to open red. Both scenarios have printed 5 solid monthly green candles. I think we are due for the macro correction that many have been waiting for. This could be an excellent buying opportunity for those who have been sidelined or are looking to add to a position in anticipation of the next parabolic bull run. NFA Do your own DD
BITSTAMP:BTCUSD
by BallsOfSteel32
7
ETH - Patience Is Key⏱Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. ETH has been stuck inside a narrow range between 2200 and 2400. 📈 For the bulls to take over, we need a break above the 2420 structure marked in red. In this case, a movement till the 2670 would be expected. 📉 In parallel, if the lower blue and trendline and the last major low at 2170 marked in green are broken downward, we will expecting further bearish movement till the 2000 support. For now, we wait ⏱ Which scenario do you think is more likely to happen? and why?. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
XAUUSD - Following The Gold🥇Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. 📈 Gold has been overall bullish, trading within the rising broadening wedge in blue. At present, Gold is undergoing a correction phase and it is currently approaching the lower blue trendline acting as a non-horizontal support. Moreover , it is retesting a strong support zone marked in green. 🏹 Thus, the highlighted purple circle is a strong area to look for buy setups as it is the intersection of the green support and lower blue trendline acting as a non-horizontal support. 📚 As per my trading style: As #Gold approaches the lower purple circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
OANDA:XAUUSDLong
by TheSignalyst
BTC - Two Possible Scenarios ↕️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. BTC has been boring this past week hovering inside a narrow range. 📈 For the bulls to take over, we need a break above the 44,300 structure marked in blue. In this case, a movement till the 48k - 50k would be expected. 📉 In parallel, if the last major low at 41,850 marked in blue is broken downward, we will expecting further bearish movement till the 38,000 support. For now, we wait ⏱ Which scenario do you think is more likely to happen? and why?. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
12
Bollinger Bands Part II: Reversal PatternsBollinger Bands Part II: Reversal Patterns Analzying Two Key Patterns Called M-Tops and W-Bottoms This post will go into greater depth than the basic introduction to Bollinger Bands published last week. In particular, it will discuss two key reversal patterns. Both the M-top reversal pattern and W-bottom reversal pattern are price patterns that form in conjunction with the Bollinger Bands. M-Top Pattern The classic M-top reversal pattern forms when two consecutive price highs form an M-shaped price pattern with the first high tagging the upper band and the second high exhausting before tagging the upper band. An example is shown on Supplemental Chart A involving a topping pattern in BTCUSD from early 2021. This weekly chart shows the M-top in red. The second high meets the traditional (strict) criteria of a second peak near—but not touching—the upper band. This is soon evident as a price failure. Supplemental Chart A But an M-top reversal pattern may arise even when two actual tags or pierces of the upper band occur, i.e., the second high may tag the band without invalidating the pattern. This is based on the email discussion this author had with the creator of the Bollinger Bands a while back in 2022, recounted at the end of this post. In short, the most important feature of the pattern is price exhaustion and reversal at the second high . In other words, look for failure of the price move at or near band resistance (e.g., a failed breakout). The following technical signals may provide additional confirmation: weakening momentum indicators, including negative divergences in momentum indicators or a lower high on %B indicator which may present as a %B line divergence. W-Bottom Pattern The classic W-bottom reversal pattern forms when two consecutive price lows form a W-shaped price pattern with the first low tagging the lower band and the second low exhausting before tagging the lower band. Supplemental Chart B But note that a W-bottom reversal pattern may arise even when two actual tags or pierces of the lower band occur, i.e., the second low may tag the band without invalidating the pattern. This is based on the email discussion this author had with the creator of the Bollinger Bands a while back in 2022, recounted at the end of this post. In short, the most important feature of the pattern is price exhaustion and reversal at the second low. In other words, look for failure of the price move at band support (e.g., a failed breakdown). The following technical signals may provide additional confirmation: Strengthening momentum indicators, including positive divergences in momentum indicators or a higher low on % B indicator which may present as a %B line divergence. Understanding the Nuances In June 2022, John Bollinger, the creator of the Bollinger Bands, posted a monthly chart of BTC/USD on Twitter. He described the chart as a “picture perfect double (M-type) top in BTCUSD on the monthly chart complete with confirmation” from %B and bandwidth indicators. He noted also that the signal led to a tag of the lower band. Supplemental Chart C is my own attempt to recreate the monthly chart Bollinger had shown to reflect the same two major monthly highs in BTCUSD in early 2021 and then again in late 2021. Please note that Supplemental Chart C shows a different M-top than the one shown on the weekly time frame above on Supplemental Chart A, which only focuses on one of the two peaks analyzed in this monthly chart. Supplemental Chart C This chart that Bollinger originally posted in 2022 showed two actual tags of the upper band. This was not quite technically within the definition of an M-top in much of the technical literature. My previous reading on M-tops and W-bottoms found that all the definitions and examples showed that the second high or low must not touch or tag the relevant band. But this is incorrect to assume that M-tops and W-bottoms are invalid when this technical definition has not been strictly met, i.e., when two (or more) tags of the bands occurred at both price extremes. Responding to Bollinger’s chart of a “perfect M-top pattern,” I messaged John Bollinger, the creator of the bands, directly, hoping for clarification about the strict definition of M-tops and W-bottoms. My question was whether they can be valid while having two actual tags of the bands at both price extremes—two tags at both highs of an M-top and two tags at both lows of a W-bottom. Or were the technical books correct to say that the second peak or low must approach the bands but fail to touch them. In response to my questions, Bollinger clarified that whether a tag occurs at the second peak / high of an M-top is not important as price failure at upper band resistance. This reasoning can be applied in the inverse to W-bottoms as well. In other words, completing the second half of each formation requires a price failure, rather than a band-tag failure, upper band resistance (M-top) or lower band support (W-bottom). So this broadens the scope of what constitutes a valid M-top or W-bottom pattern. But it does not exclude patterns that meet the conventional technical definition. This means that valid M-top and W-bottom patterns include cases where the secondary high / low fails to tag the upper / lower band. Stated differently, failures to tag the bands at a secondary price high / low can also form valid topping and bottoming patterns. Finally, beware of seeking reversals too soon when price is trending strongly, or walking the bands —pullbacks in that specific scenario are not at all "price failures," and it's important to recognize the difference. Conclusion In short, the key is to apply substance over form, to follow the core concept rather than strictly adhering to the technical rules / definitions. Broaden the scope of the technical requirements to include price failures—on the secondary test—at band resistance or support. This will help traders recognize the patterns arising from this technical indicator more effectively. Further, Bollinger himself recommended using other indicators for confirmation, such as RSI or another indicator that isn't overlapping in its operation too much. Lastly, it may be important to realize that the final failure at or near the bands may not be the second peak or low but the fourth, fifth or sixth. Just draw the M at the end where it fits if there has been strength followed by a failure at or near the bands. And remember trading time frame (M-tops and W-bottoms that are valid have much less significance on shorter time frames and much more and lasting significance on longer time frames. And keep risk management on as always. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
AMEX:SPYEducation
by SquishTrade
4
CRV - Shift In Momentum Soon!Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. 📈 After breaking below the blue channel, CRV has been overall bearish , trading within the falling channel in red. 🏹 For the bulls to take over again, we need a break above the upper red trendline and 0.5 round number. In this case, a movement till the previous major high at 0.7 would be expected. 📉 Meanwhile, until the bulls take over, CRV would be bearish and can still trade lower to test the lower bound of the red channel and 0.41. In this case, we will be looking for short-term buy setups on lower timeframes. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
Chinese Economy (HSI) Supercycle ReversalThe Chinese economy has had 4 consecutive years of closing in decline. Evidently, the Chinese economy supercycle (as depicted in the chart) indicates that a reversal is well overdue (or superdue in this particular context). By the end of this year, it can be expected to see a relatively massive reversal in the Chinese economy, one that may catch many by surprise. On the daily timeframe, this reversal started in this past week, Monday 01/22/24, where China likely saw its last lowest of the year. There's still potential to test 10/31/22 low and maybe even break it at some point in February, but doing so will imply an even larger repump, leading to potential break of the yearly supercycle. In any event, if China does indeed maintain the recent low as the yearly low, it means it intends to engulf the yearly red cycle this year, latest 2025. But 2025-'26 should mean the chinese economy once again sees a powerful decline. After this, Chinese economy could choose to completely collapse as an economy or overcome odds and revive a green supercycle economy. In my fairest opinion, I think Chinese economy will explode to the upside, likely with fusion technology as the leading catalyst. Artificial Intelligence will ultimately be the wildcard that decides whether this catalyst holds the economy in whole or whether it briefly collapses until further regulation is upheld.
TVC:HSILong
by JuanLagos94
3
ETH - Market Structure 101 📕Hello TradingView Family / Fellow Traders, From a long-term perspective, ETH is currently rejecting the upper bound of the brown channel. Weekly Chart: 📈 For the bulls to take over again from a long-term perspective, a weekly candle close above 2600 is essential for the bulls. If achieved, a movement toward the next resistance at approximately 3000 could be anticipated. H4 Chart: 📉 Conversely, the bulls will remain in control from a medium-term perspective as long as the local support in red at 2100 holds. If the 2100 is broken downward, a bearish correction till the 1750.0 mark would be expected. 🏹 Meanwhile , for the bulls to take over again short-term, we need a break above the last minor high from 4h at 2285. Which scenario do you think is more likely to happen first? and why? 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Richard Nasr
by TheSignalyst
2
CVNA Long after completed Fib. RetracementCVNA on a 30 minute chart trended up from November post earnings for 6-7 weeks until December 20th and then started falling from a head and shoulders pattern at the pivot. The Fib retracement tool is used to draw the retracement of the prior up trend. The Trend Based Fib Time is used on that prior up trend to show fib levels across time instead of price. Price is currently at the 0.5 Fib retracement for price and also at 0.5 for the latter tool. The other indicators show rising RSI, a flip between positive and negative directional indices and volatility beyond the running mean. I will take a long trade here targeting 52.3 which is just under a 0.5 fib retracement of the recent trend down. The stop loss will be set at 42.8 at the level of the reversal narrow-ranged candles. A option trade will be entertained for the February monthly expiration.
NYSE:CVNA
by AwesomeAvani