Reading a Chart Bar by Bar

[SuperTrader]

Will post my observations about Index based on daily price movements.

Over the period of time, should be a good guide to how to simply trade the chart with price as the only indicator.

[MurAtt]

Looking forward .. many many thanks

[krishere]

:cheerful:

Will post my observations about Index based on daily price movements.

Over the period of time, should be a good guide to how to simply trade the chart with price as the only indicator.

[WULF]

Also post on Trailing SL as per your promise plz this week

[SuperTrader]

Most definitely Wolfe.

[SuperTrader]

Price Action Trading

To simply put it, price action trading has no absolute definition. For each trader, meaning of price action trading is different. For me, price action trading is nothing but gauging the inherent psychology of traders and identifying the path of least resistance of the market. In order to gauge the underlying momentum, there are four specific type days which will help us to judge who remains in control of the market; Bulls or Bears.

While analyzing price action on stocks or indices, we will basically categorize each and every day based on the following four days. Each day has a specific price structure which will be discussed in detail going ahead.

Strong Accumulation

Strong Accumulation is nothing but a market session where the main index along with the index components and broader markets comprising of Midcaps and Small caps show visible signs of delivery based buying. Such visible signs are mainly volume related when compared to the action on previous day. A Strong Accumulation session signals an uptrend, unless and until it is encountered by a Strong distribution session wherein the markets would then be in a downtrend. Such days are usually extremely positive for the market and form good S&R levels for active traders.

Weak Accumulation

Weak Accumulation session is where the main index along with the index component typifies weak price action and invisible accumulation. During such days however, broader market participation in the form of mid caps or small caps is relatively strong. Most of the days in a typical Bull market consists of majority of Weak Accumulation days. This is precisely why it is said that Bull markets rise on skepticism.

Strong Distribution

Strong Distribution is nothing but a market session where the main index along with the index components and broader markets comprising of Midcaps and Small caps show visible signs of delivery based selling. Such visible signs are mainly volume related when compared to the action on previous day. A Strong distribution session signals an downtrend, unless and until it is encountered by a Strong accumulation session wherein the markets would then be in a uptrend. Such days are usually extremely negative for the market and form good S&R levels for active traders.

Weak Distribution

Weak Distribution session is where the main index along with the index component typifies weak price action and invisible distribution. During such days however, broader market participation in the form of mid caps or small caps is relatively weak. Most of the days in a typical Bear market consists of majority of Weak distribution days. This is precisely why it is said that Bear markets fall on fear.

Individually, for each day, we will now start to identify how we will determine accumulation and distribution days.