I have volume zoomed so I can better see the trend.
See how buying pressure is decreasing? ie: the green candles are getting smaller.
Selling pressure seems to be decreasing at first glance, but it's much more active now and it's been consistent.
In aggregate, selling volume is still greater than buying volume.
You don't enter a trade on a red candle. It's like trying
to catch a dropping knife. There are aggressive trades that can be made
on a red candle, but you look for a smaller red candle,
or for a series of decreasing volume red candles,
preferably forming a reversal pattern (hammer, dragonfly, doji).
However, that's still a risky trade. I would be more prone to enter into that type of a trade were it a bull market, where the probabilities of a price increase are generally better on a base level.
Daily chart still bearish per candlesticks.
I would like to see a bounce off the 50 day moving average.
If we stay relatively sideways or slightly down, I expect it will be in that zone of support.
It will be a third almost fourth test of the support line.
I just want to give you guys an example of what to look for in looking at potential set-ups.
Most times when you look at the chart you don't see a trade set-up.
That's good, it's supposed to be that way.
Quality over quantity, long-term thinking.
Risk management, manage your bankroll.
Let's look for volume to pick up and see if we get support off the 50 day MA.
Yeah, I can spot the potential head and shoulders.
These are fairly obvious to spot when you see them,
the only thing that wrinkles here is that the third high was only a smidge below the first.
However, thinking long-term, the reason Head and Shoulder patterns precede a price decline is simple: why would you want to put your money into something that isn't going higher? That looks to be going down?
Think like an institutional investor,
someone with a large amount of money.
They don't lose their money trading.
Trading exists to make people with money money.
They don't jump into risky trades.
They enter safe bets.
They want to put it in the safest thing that it can earn on.
That's why there's so much money in stocks,
because it (averaging) just keeps going up and up.
The S&P500 is the second best thing you could have invested in
in the last 100 years
yes, the best thing was Bitcoin.
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