Chart Analysis: Establishing Trading Strategies

١٣ سبتمبر
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When you start studying charts, the first thing you learn is about candles.

However, you start studying about the Open, Close, High, and Low of candles.

When you start studying about the Moving Average, you start to think that you understand the charts.

However, when you actually start trading with the Moving Average, you realize that nothing works properly.

So, you start studying other indicators.

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The above is based on my experience. When you study various charts, you may think you know them, but when you actually start trading, you realize that they don't apply at all.

Where on earth did I go wrong?... What I learned after a long time is that I was wrong from the very beginning.

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In other words, I realized that my subsequent chart studies were not done properly because I lacked understanding of candles.

When you start studying candles, you study candles of various shapes and patterns.

At this time, you should not be too obsessed with the names of candle shapes or patterns or the conditions that occur and try to memorize them.

It is important to read it repeatedly several times until you can grasp the concept of the arrangements formed by the combination of candle shapes or patterns, that is, the support and resistance points.

Eventually, when the candle shapes or patterns are combined, you can find the volume profile section formed around it, that is, the section where trading volume occurs.

By drawing and marking the support and resistance points you find in this way on 1M, 1W, and 1D charts, you can create a trading strategy on the charts you mainly trade.

That's all the experts in chart analysis say.

In the end, everything is about looking at the combination of candles that make up the chart, finding the corresponding support and resistance points, and trading according to your trading strategy.

A trading strategy is to create a response strategy at the corresponding support and resistance points based on the three things above:
1. Investment period
2. Investment size
3. Trading method and profit realization method

However, since most books do not include trading strategies, you will only learn about the timing of trading and closing of trading using various indicators.

Because of this, there are many cases where you cannot respond to the volatility that occurs after starting trading and end up losing money.

Even so, it is difficult to specifically define the contents of trading strategies.

This is because the investment period, investment size, and trading method are different depending on the individual's investment style.

Therefore, what I can tell you is that you need to set the buy, sell, and stop loss points according to the support and resistance points obtained through chart analysis and wait for a while.

Due to price volatility, you may not touch the buy, sell, and stop loss points or may move past them.

You should learn how to create a trading strategy by modifying the way you respond to these things according to your investment style.

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One important thing here is that you should mark the support and resistance points in advance through chart analysis before starting trading.

Otherwise, if you start trading and then mark support and resistance points, psychological factors will come into play, which will likely lead to an unexpected transaction.

Don't forget this, and you should practice marking support and resistance points in advance before starting a transaction.

Also, you should avoid analyzing charts after listening to various articles, news, or community content.

The reason is that psychological factors can come into play.

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I think trading is a response to the movement of prices that fluctuate in real time.

Therefore, waiting and determination are necessary.

If you wait too long or do not make a decision and pass it by, there is a high possibility that you will suffer losses or make little profit, so you need something to refer to when waiting or making a decision.

That is the support and resistance points I mentioned above.

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However, support and resistance points alone do not solve everything.

Therefore, you should add trend lines and various indicators to ask for a method of responding to price fluctuations.

However, since the trend line is formed by a diagonal line, there is a lack of countermeasure strategies using the trend line.

Therefore, the trend line is used to literally find out what the current trend is.

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Therefore, when it deviates from the trend line, the movement at the support and resistance points is checked and the corresponding response is made.

When trading with a chart consisting of the above two support and resistance points or only the trend line, there are often cases where the transaction cannot be properly conducted due to fakes or sweeps.

Therefore, in order to counter these fakes or sweeps, various indicators are added to the chart.

The most commonly used of these is the price moving average.

Even if you add the price moving average, you realize that it is a curve, just like the trend line, and is therefore not suitable for countermeasure strategies.

So, the price moving average is also used to check the trend, just like the trend line.

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In that regard, the indicator I recommend is the StochRSI indicator.

The default settings for the StochRSI indicator are 14, 7, 3, 3 (RSI, Stoch, K, D).

The value of the Signal line (EMA) of the StochRSI indicator is 7.

If the StochRSI indicator rises in the oversold zone and maintains the state of StochRSI > StochRSI EMA, it is a buying period.

On the other hand, if the StochRSI indicator falls in the overbought zone and maintains the state of StochRSI < StochRSI EMA, it is a selling period.

However, you should trade depending on whether there is support or resistance at the support and resistance points formed at that location.

Even if there is movement in the StochRSI indicator, it is recommended not to trade if you do not have support and resistance points drawn on the 1M, 1W, and 1D charts.

The reason is that you may feel psychologically anxious, so there is a possibility that the trade will proceed incorrectly.

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If you can trade with only what I mentioned above and make an average profit, it is because you have established a trading strategy according to your investment style.

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We need objective information to establish a trading strategy according to your investment style.

We think that this is the only way to minimize the psychological factors that arise when starting a trade.

If you can add various indicators to the chart to obtain objective information and receive support and resistance point information according to them, you can create a trading strategy according to them at any time.

To do this, we used the StochRSI, OBV, CCI, and RSI indicators to display support and resistance points on the price candle part.

And, we added the StochRSI and BW indicators as auxiliary indicators.

The StochRSI indicator added as an auxiliary indicator is not the StochRSI indicator provided by default, but an indicator with a modified formula, so you can share the chart and use it or copy and paste the TS-BW UP indicator to your own chart and use it.

There is no problem using the basic StochRSI indicator.

However, there is a slight difference from what I said, so there may be a slight problem in understanding.

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As above, since the support and resistance points of the 1M, 1W, and 1D charts are drawn on the chart to create a trading strategy, my chart is very confusing and not easy to understand when you first look at it.


And, since there are many indicators that I have not explained, it may be even more difficult to see the chart.

Therefore, to resolve the difficult parts, share the chart, hide the indicators added to the chart, and activate them one by one while looking at them, and you will be able to understand the chart.

If you share the chart, you can use it normally, so you can check the chart from various angles.

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Have a good time.
Thank you.

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