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False Breakouts

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  We can find several false breakouts at any time frames. Once you start observing the price action, you come to know that which one is the real breakout/breakdown. In the above figure: if you observe the resistance levels closely, we can expect some selling pressure at resistance levels, but what happened? There is no selling force when the market is reaching the resistance levels. And the bulls can break out upside without any major struggle. This means, buyers are very strong and sellers are giving up. But if you observe the price alone, you will come to the conclusion that buyers' force is strong. But the next immediate day sellers get activated and show their power. Now we have 2 choices 1.If a trader wants to be a buyer, he or she needs to wait for the price to close above the quick reversal candle. 2.Trader can take the short below the quick reversal candle, by keeping the stop loss above the quick reversal candle. Enable Ginger Cannot connect to Ginger Check your internet ...
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Why "SHOOTING STAR" got failed?

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  Trading is not all about patterns/technical or fundamental analysis. Why? Most of the times  it will be easy or maybe sometimes it will be complicated Anyhow, if you really want to be a great trader or investor, you need an observation. Again saying that you don't want to have the highest IQ or more of intelligence, all you need is simple logic or common sense. Coming to the point if you start observing the above chart, its clear cut selling from higher levels. Technical evidence is there as a shooting star plus followup selling pressure was exist. But the stock did not go down as the bookish concepts. Now if we start to observe the candlesticks, we may come to know what's happening to the particular stock I have marked the zone(downside wick potion), this is now a very crucial and interesting part to understanding the battle between bulls and bears. Exactly sellers are trying to sell, they are doing their job, but buyers are very strong and they are defending the sellers in...
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The inner meaning of the "DOUBLE BOTTOM"

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  What is the inner meaning of the double bottom? Whenever a stock comes to the support we look for buying opportunities. Here I am trying to explain the concept behind the double bottom. You have to be open-minded about the context, focus on the price instead of a pattern. If you observe the price alone, the stock started falling from the level “R”, i.e. said to be resistant. Now you need to find good support to buy. If you observe the price @ “1”, the stock is halting and taking a sort of up move called pullback. But we won't consider it as strong support. Why? Whenever the stock or market is falling we need strong evidence, to trade against the primary trend. Why should I not try to buy @ level “1”? The reason is so simple, whenever sellers start selling from higher levels, after some correction they might recover the stocks at a cheaper price, that might be the reason to first-time bounce. And the second reason is logic: when the first bounce is happening retailers will come to...
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