Is it difficult for an uninitiated person looking at a chart of stock quotes to understand when to buy and sell shares? The trained eye of a trader will notice patterns in price behavior. In fact, there is nothing difficult in reading charts, if you practice. After all, you, for example, waking up in an unfamiliar place and looking out the window, will be able to determine with a high probability whether it is day or night. In parallel, guess the time of year and the approximate weather. And then make a conclusion what to wear before going out. Why so decided? Surely there is some secret? You received signals, on the basis of which you built a logical chain: The sun is shining. Conclusion: like a day.
Unless it's Stockholm, where it's as bright at 3 am as it is at noon. Green leaves on the trees. Conclusion: probably spring or summer. If the house is not standing in the middle of a giant greenhouse in the snow. Swifts fly in the sky. Conclusion: day time, May-August and we are definitely not in the greenhouse. Solution: put on summer clothes.
Profit! Also, an experienced trader, looking at the chart, will predict the further price movement. Signals from the outside add up to patterns, drawings, sequences. By the way, they are used by trading robots (which, according to CNBC, control 80% of the US stock market). When the robot algorithm detects a certain pattern in the price behavior and it coincides with the confirming signals of other indicators, the “buy” or “sell” command follows. The programmer's task is to describe the process of entering and exiting a trade in as much detail as possible. To describe trading programs, stock oscillators are used - tools for price forecasting. Consider the five most popular ones to trade with the trend.
Where did oscillators come from? Most oscillators were invented in the 30s of the last century. During the Great Depression, financial analysts suddenly had a lot of time .. The sharpest minds began to hone their own trading rules and publish scientific papers. This is how the world learned about Elliot waves, the Gann fan, the Wyckoff sequence and others. It is not necessary to know all oscillators.
Usually a trader uses three or four, the most suitable for the style of trading. The task of oscillators is to answer the question of whether it is worth buying or selling stocks at the moment, as well as to predict the direction of the trend. 1. What are support and resistance levels? A support level (or simply support, English support) is a price range from which the price turns up. This level seems to support the price, preventing it from going down. The level of resistance (resistance) does not allow the price to go up. The mirror level acts as both support and resistance.
Level trading is my favorite strategy. The main thing is to find the right entry point. This method is ideal for stocks whose price moves sideways (horizontally). Sometimes, instead of going flat, a stock trades in an ascending or descending channel, like Alrosa (ALRS). We buy at the lower border of the channel, put the first take profit in the middle, the second - at the top. TradingView's drawing tools allow you to look for similar patterns. .