SPY is forming a triangle ...
My previous chart may still be valid, but I will build on it with a new chart. We are seeing a triangle formation with the tip forming on Feb. 12. We should see the market breakout, either up or down before the tip. (I typically switch to the hourly charts when drawing my triangle formations to get a more precise drawing. But oftentimes, that will make the lines on the daily chart not match up exactly.)
I am NOT a fundamental trader (I am a technical trader) but I find the technical indicators tend to coincide with fundamental reasonings or explanations. Donald Trump stated on Friday, Feb 7th, he will announce tariffs on many countries next week so it would make sense that the market would move next week following the announcement.
From a technical trading point of view, the market could go up or down closer to the tip of the triangle. Breakouts of triangle pattern usually occur 2/3 to 3/4 of the triangle length, so the SPY could move outside the triangle before the tip (Feb 28).
The triangle pattern is usually considered a continuation pattern which means the market will continue in the direction it was moving before the triangle started. This pattern should usually have at least 5 touches of support and resistance. (You can get any of this information from the internet.)
I think there are 3 aspects to trading:
1) Being able to read the charts so you have an idea where the market is going.
2) Being able to choose the correct trade strategy for the market conditions. You do not want to put a bullish trade when the market is bearish and vice versa. There are also certain trades where you can make money when the market is trading sideways with a non-directional trading strategy or a different trade if the market is extremely volatile. You can apply an iron condor, a credit spread, debit spread or butterfly trade depending on the market conditions. All trading strategies have their own risks and rewards.
3) Knowing details, both the positives and negatives about your brokerage which can really elevate your trading.
MORE THEORY … which I have stated before.
I am using the Heikin Ashi candlesticks. Why Heikin Ashi candlesticks?
1) They show more of a directional movement within candlesticks.
2) They tend to filter out the market noise so you can see the market direction better.
3) It reduces false signals, allowing you to stay in the trade longer.
4) And, it gives you a smoother appearance making it easier to see trends and reversals. (This information is from Dr. Keith Wade who speaks at the Wealth365 Summits.)
I personally find:
* the 5 minute indicators typically represent what will happen in the next half and hour.
* the 10 minute indicators typically represent what will happen in the next hour.
* the 30 minute indicators typically represent what will happen in the daily.
* and, the hour indicators typically represent what will happen in the next week.
Typically, I would wait until there are 2 green Heikin Ashi green candlesticks before entering.
I still tend to switch back and forth between Heikin Ashi candlesticks and regular candlesticks since regular candlesticks are what I am familiar with and have been using since I started trading.
I use the MacD, the Stock RSI and the DMI to assist me with the direction of the market. I am not perfect at them. I will hopefully try to explain these in future trading charts.
I am trying to take trading classes through Udemy, mostly because they are cheap. I usually wait for a sale where the courses are as low as $14.99 instead of paying over $100 per course during the rest of the year. As well, you may be able to get access to Udemy through your local library depending on where you live. udemy.com/
I always try to attend the free Wealth365 Summit which is held about 4 times a year where I always pick up some more useful information. I believe the next week long summit will be around April. Again, I am not affiliated with this company in any way. wealth365.com/
I really like writing up these charts and always learn something new with each chart I draw. The first one is always the hardest but I encourage everyone to draw a chart at least once. Drawing charts was one of the best things I did to improve my trading. Don’t be afraid to make a mistake. Mistakes don't need to be avoided or feared. They help move you forward.
Happy trading, everyone!
I am NOT a fundamental trader (I am a technical trader) but I find the technical indicators tend to coincide with fundamental reasonings or explanations. Donald Trump stated on Friday, Feb 7th, he will announce tariffs on many countries next week so it would make sense that the market would move next week following the announcement.
From a technical trading point of view, the market could go up or down closer to the tip of the triangle. Breakouts of triangle pattern usually occur 2/3 to 3/4 of the triangle length, so the SPY could move outside the triangle before the tip (Feb 28).
The triangle pattern is usually considered a continuation pattern which means the market will continue in the direction it was moving before the triangle started. This pattern should usually have at least 5 touches of support and resistance. (You can get any of this information from the internet.)
I think there are 3 aspects to trading:
1) Being able to read the charts so you have an idea where the market is going.
2) Being able to choose the correct trade strategy for the market conditions. You do not want to put a bullish trade when the market is bearish and vice versa. There are also certain trades where you can make money when the market is trading sideways with a non-directional trading strategy or a different trade if the market is extremely volatile. You can apply an iron condor, a credit spread, debit spread or butterfly trade depending on the market conditions. All trading strategies have their own risks and rewards.
3) Knowing details, both the positives and negatives about your brokerage which can really elevate your trading.
MORE THEORY … which I have stated before.
I am using the Heikin Ashi candlesticks. Why Heikin Ashi candlesticks?
1) They show more of a directional movement within candlesticks.
2) They tend to filter out the market noise so you can see the market direction better.
3) It reduces false signals, allowing you to stay in the trade longer.
4) And, it gives you a smoother appearance making it easier to see trends and reversals. (This information is from Dr. Keith Wade who speaks at the Wealth365 Summits.)
I personally find:
* the 5 minute indicators typically represent what will happen in the next half and hour.
* the 10 minute indicators typically represent what will happen in the next hour.
* the 30 minute indicators typically represent what will happen in the daily.
* and, the hour indicators typically represent what will happen in the next week.
Typically, I would wait until there are 2 green Heikin Ashi green candlesticks before entering.
I still tend to switch back and forth between Heikin Ashi candlesticks and regular candlesticks since regular candlesticks are what I am familiar with and have been using since I started trading.
I use the MacD, the Stock RSI and the DMI to assist me with the direction of the market. I am not perfect at them. I will hopefully try to explain these in future trading charts.
I am trying to take trading classes through Udemy, mostly because they are cheap. I usually wait for a sale where the courses are as low as $14.99 instead of paying over $100 per course during the rest of the year. As well, you may be able to get access to Udemy through your local library depending on where you live. udemy.com/
I always try to attend the free Wealth365 Summit which is held about 4 times a year where I always pick up some more useful information. I believe the next week long summit will be around April. Again, I am not affiliated with this company in any way. wealth365.com/
I really like writing up these charts and always learn something new with each chart I draw. The first one is always the hardest but I encourage everyone to draw a chart at least once. Drawing charts was one of the best things I did to improve my trading. Don’t be afraid to make a mistake. Mistakes don't need to be avoided or feared. They help move you forward.
Happy trading, everyone!
Trade active
NOTE: In the third paragraph, last sentence, I stated 'SPY could move outside the triangle before the tip (Feb 28)' I meant to put Feb 12, like I did in the first paragraph, not Feb 28.Note
As we saw the announcement about tariffs from President Trump did not impact the market much. But the CPI is coming out tomorrow (Wednesday) and on Thursday the Initial Jobless Claims will come out. Both which could impact the market in a positive or negative way. This will be a fundamental reason for why the market will move.
From a technical point of view, I am looking at the triangle formation and the market can move up or down before it reaches the tip of the triangle.
Trade closed: target reached
The market did start going up last week and it did exit out of the triangle when I said (on Feb 12), so I will close this trade. I will draw another chart trying to estimate where the target point is and when it will hit it. Just glancing at the calendar, I think it will hit around March 4th.
I will try to draw my new chart after close tomorrow.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.