Friday, 5 August 2016

Reading the Prices

It is the fact that as a price action short-term trader we need to develop the skill of reading the prices, without which we are not going to succeed.  Trading only the patterns is not going to work for sure.

Last few days markets were trading in anticipation of news flow (GST).  Yesterday markets traded after the news was out.  So now today morning this is how I tried to read the price action engaging the other party. 
(open the chart image in new window for enlarged view).

The first clue it gave when it failed to break the intra-day low yesterday indicating sellers were not interested to sell further.  The reason was obvious because the news flow was not favorable to sell. It was the positive news flow.  Today's full gap up and breaking out of last two days high in first candle confirmed all these setting the stage for Type 1 kind of day.

5 out of 6 pointers were in line for Type 1 trend day which I have discussed in my Price Action Reading Video Tutorial