5 RULES OF SUCCESSFUL CHART ANALYSIS

1️⃣ Draw lines based on bar highs/lows. Avoid using closing prices as it neglects price movements, distorting the analysis.
2️⃣ Build support/resistance lines with at least 3 points. This ensures their significance and strength.
3️⃣ Avoid trading on small timeframes. Use H1 and higher for increased forecasting accuracy.
4️⃣ Stick to liquid trading tools. The effectiveness of chart analysis on illiquid markets tends towards zero.
5️⃣ Protect your profits. When the price moves in your favor, adjust your stop to the breakeven level and beyond.

Don't rely on 90% of your predictions being correct. Maintain a profit-risk ratio of 2:1. With just 50% accurate predictions, you can still profit.

For more on applying technical analysis chart patterns, read the article at the following link https://bit.ly/3LMRIcG

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TOP 7 SETUPS IN THE DOM WITH R:R>1:3

1️⃣A Pullback to the Range
Price breaks the range, returns to its upper boundary, and bounces upward.

2️⃣A Pullback to an Iceberg
The market rises with a breakout, slightly pulls back, and we see a huge volume at the end of the pullback at 1 or 2-3 consecutive price levels.

3️⃣A Pullback With the Loss of Selling Pressure
Sell orders decrease during the pullback and can't push the price down.

4️⃣A Pullback With Correlating Markets
When the fast market starts moving after the pullback, you join in the slow one.

5️⃣Range Trading
Avoid trading this setup in narrow ranges. Absorptions at extremes will help identify levels to enter trades. If the price can't surpass POC, it will move in the opposite direction.

6️⃣A Fake Breakout
A strong breakout of range boundaries. Following a series of stop-orders triggering, the market stops with significant volume.

7️⃣Clean Impulse
The market starts moving very fast without obvious reasons.

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RELIABLE AND COMMON REVERSAL PATTERNS

A reversal is a change in the trend of a financial instrument.
If there is an upward trend in the market, the price will start to decline after a reversal. Conversely, a reversal of a bearish trend will lead to an increase in prices.

Generally, the global trend changes when the price reverses on daily, weekly, or monthly timeframes. Reversals on smaller timeframes are often referred to as pullbacks or corrections. Reversal patterns in trading begin with pullbacks, and it is impossible to determine with 100% certainty what will happen to prices next.

If a day is not trending, reversals can occur several times within it. For positional traders, intraday reversal patterns are not of great significance, they focus on the overall picture. Conversely, for scalpers, reversals on weekly charts are not as important, as they operate only within the day.
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For a more detailed description of patterns, read the article at the following link https://bit.ly/3tU4sbs

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RELIABLE AND COMMON TREND CONTINUATION PATTERNS

Last Engulfing Bottom – this is a continuation pattern of a bearish trend with a reliability of 66%. The first candle is white in a downtrend, and the second is black, with its body engulfing the body of the previous candle.

Last Еngulfing Тop – this is a continuation pattern of a bullish trend with a reliability of 67%. The first candle is black in an uptrend, and the second is white, covering the body of the first candle. Shadows can be ignored.

Bearish Doji Star – this is a continuation pattern of a bullish trend. A doji is a candle that has the same opening and closing price. There are many variations of doji: with long one-sided or two-sided shadows and the body of the candle at the high or low. The appearance of a doji indicates indecision and a lack of direction in the market price. If a doji appears after a long white candle and above its body, Bulkowski believes that there is a 68% chance that the bullish trend will continue. This pair is often considered a reversal pattern, which is why it is called a bearish star.

Bullish Doji Star – this is a continuation pattern of a bearish trend. Similar to the previous example, if a doji appears below a long black candle during a bearish trend, there is a 68% chance, according to Bulkowski, that the price decline will continue. This model is also often considered a reversal pattern.

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