How to Turn Charts into Trading Strategies
In this video, Chris Ashton, an Independent Trading Analyst from the Corellian Academy, provides a comprehensive overview of technical analysis techniques essential for daily trading by using real case studies such as the US Tech 100, Gold and Euro/Dollar.
Ashton commences by elucidating the concepts of support and resistance, demonstrating how traders can recognise key levels on a chart. To further illustrate, he utilises a chart of the UK 100 Index to showcase how support levels are delineated by previous market lows where buyers intervened. At the same time, resistance is pinpointed by past highs where seller influence was predominant. Traders can effectively utilise these determinations to strategise their entry and exit points. Additionally, a horizontal range presentation exemplifies a balanced market, affirming that buying near support and selling near resistance may yield favourable outcomes.
He then describes how the Bollinger Bands can be used in monitoring price trends and volatility. He articulately explains that expanding bands indicate escalating volatility and a more robust trend while contracting bands signify a slowdown.
Furthermore, the video underscores the significance of Fibonacci retracements as an effective tool for recognising potential support and resistance levels within a trend.
Ashton uses the Euro/Dollar chart to demonstrate how these retracement levels can act as key points for market reversals, to help traders plan their entry and exit points based on market dynamics.
In conclusion, the video underscores the importance of implementing technical analysis to construct well-structured strategies tailored to different trading scenarios.
