Although i am more inclined to wave theory , i want to explain here one of the simple way to trade
1) Plot a weekly chart of any stock
2) Plot horizontal support and resistance line which has tested a minimum of three times
3) Look for a significant break in the support line ,(The word significant is important)
4) The support line now behaves like a resistance line.
5) Look for selling as it comes near to the resistance line
Pearls of wisdom - 1) You can also plot 200 sma as an additional filter to sell
2) It's not necessary that the upmove should touch the resistance line
3) SL should be above the resistance line or with average true range
4) Target should be trailed
If you want to ride a massive trend, the kind that makes other traders go green with envy, then you must…
Trail your stop loss.
This means:
No target profit.
No second guessing yourself.
No bailing out even when it feels “uncomfortable”.
You honor your trailing stop loss and get out when the signal tells you to.
1) Plot a weekly chart of any stock
2) Plot horizontal support and resistance line which has tested a minimum of three times
3) Look for a significant break in the support line ,(The word significant is important)
4) The support line now behaves like a resistance line.
5) Look for selling as it comes near to the resistance line
Pearls of wisdom - 1) You can also plot 200 sma as an additional filter to sell
2) It's not necessary that the upmove should touch the resistance line
3) SL should be above the resistance line or with average true range
4) Target should be trailed
If you want to ride a massive trend, the kind that makes other traders go green with envy, then you must…
Trail your stop loss.
This means:
No target profit.
No second guessing yourself.
No bailing out even when it feels “uncomfortable”.
You honor your trailing stop loss and get out when the signal tells you to.