The above chart presents a simplicity of trading, its the heart and soul of trading, let it be a trend following system or investor or day trader or scalper -its as easy as kids ABC
Let me explain my points with the simple yet powerful setup with above chart and more examples:
- Breakout - As we all know every tick in the market is a confirmation of fight between bulls and bear as bulls want to take prices higher and bears hammer the prices lower, breakout can be understood as a winning the battle and taking the prices higher. And we just have to join the WINNING SIDE in this case its BULLS
- Consolidation - Consolidation can be understood as a laying the foundation for a strong building. In stock market we know it as Flag, triangle, rectangle etc
- Retest - Its like price reversing back to the breakout level & consolidates again and forms patterns as flag, triangle, rectangle etc
- Continuation - Price again breaks out of the consolidation zone and continues
some of the live Nifty examples are mentioned below for better understanding
Some of the Bank Nifty charts for ready reference
Breakdown - retest from bottom & continued lower
Breakout and twice retest
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