Reading and evaluating Daily candlestick chart. I will begin evaluation for all trades and set up on the daily chart. I must also be aware of monthly, quarterly and yearly highs and lows, these extremes are significant and must be given consideration.
- What am I looking for on daily candlestick chart?
Trend bias and direction
Always trade in direction of trend. There are 3 trend directions: up, down or ranging sideways. When the trend is up, I want to buy low and sell high for a profit. When trend is down, I want to sell high and buy low for a profit. When ranging sideways, I want to buy low at support and sell high at resistance level.
- How will I use the information gained on daily chart?
To find trade entry and exits
Trend direction and trade entry are two separate and different things. My preferred entry is extreme price levels with low risk. Extreme price levels are price points where price does not remain for a long time, these price points have produce a strong reaction of buyers and sellers. Support and resistance levels are slightly different from extreme price levels. Trading at extreme points, support or resistance levels also reduce risk as they are closer to stop loss range.
- What indicator will I apply to the daily chart?
21, 100 and 200 EMA
- How to mark up and evaluate daily chart?
Horizontal lines to highlight high low extremes
- Use of rectangular boxes, horizontal lines and char formatting tools
To identify and highlight strong support and resistance levels
This is my trading journal intended only for my use to help me organize thoughts and ideas for successful trading. Nazaar.
Price Action Trading 