Few Trade examples
Price action is supreme. Simplest analysis is based on simple price action following, but is it so?
Price in itself creates too much noise and challenges individuals to predict correctly the future move of a security. Trendlines can help to visually analyze a trend easily. Just try to connect two or more points in a chart and you get something to look for. However, It is not as easy as it sounds because we have to keep in mind that price is driven by forces of supply and demand. We cannot ignore the support and resistance made up on the chart.
Whenever you try to draw a trend-line, always try to find nearest support and resistance levels on that chart and try to draw in sync with those. You will surely get success. Try to look into multiple time frame and conflicting price zones. You can draw trend lines joining tops or bottoms of a stock. Draw a line where the price takes support too often or a price zone where it fails to cross most of the times. The point on exact Trend-line should not be used as a stop loss or for Buy bid because the price is noisy and there are chances it will hit your stop loss or buy order and then move into opposite direction. So, always wait for trend-line confirmation and for signs of price action in your favor.
Below I have shared few examples of trend-line based trades. Please have a look.
Also, visit the post for Channel Trading here.
HEROMOTOCORP original Buy call was given on 5th December in cash segment:
SHORT TERM CALL: BUY HEROMOTOCORP at 1820-1830, stop loss 1795 closing basis, TGT 1869-1895-1920-1950
The stock took support on a trendline and formed a base.
Result: 1912 High. All targets almost hit.
Another Trade examples, Satyam