In the above chart,
I first noticed that the price was around its support. It can be confirmed by seeing the previous price swings that the support is well tested.
Next I look at the to confirm if the divergence between the Signal Line and line is decreasing to make sure if it is the right time to enter or not.
Usually these 2 steps take hardly a few seconds and I can form a preliminary idea about the position.
Once these two points are confirmed,
I move forward to confirm if the 9,21 (which can been seen has worked out beautifully for this stock in the short time frames like 7-10 days) is actually looking to enter right now. If the is not already crossed, or about to cross, I can drop the share here. In this case, the lines are very close and the chances of a cross are good enough.
Next, I confirm my hunch by looking at the data and see if the increase is price will actually be sustained by smart , or fall down by retail trading pressures. Increasing with price increase helps to get conviction for a long position.
Finally, I check the levels and I monitor them very closely to see if there is any or Hiden divergence and see how strong they might be. I also like to draw a vertical line at the key level from which always bounces or retracts. Personally I prefer levels between 50 and 60, after a recovery from 30-40. It just implies that the bulls are gaining control again and still leaves out plenty of room for entering a trade and making profits before it hits the overbought region.
After I am satisfied with the Technicals, the last thing remains is to check if there are any major news, events or rumours about the share and the recent EPS growth of the share. This doesnt affect a lot in the short run, but doing due diligence never hurts. It is how I identified IEX , HUL and TCS just right before they shot up.
Thanks for reading!
Keep Learning :)
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Good clear chart and idea with good clear explanation.
You can be either Price Action trader or indicator based trader. Use of EMA & Volume is more than sufficent for confirmation. I am sure if you remove indicators, it will be simple & better study.
Good work on channel.