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Once you understand price action, markets open to you

Trading concepts can be applied across many markets

Question: Can you spot any familiar price action/ chart patterns in these two charts?

INTC weekly chart

INTC weekly chart

AVGO weekly chart

AVGO weekly chart

 

Recurring chart patterns with high probability outcomes

First chart:  Intel Corporation (INTC)

  1. Head and shoulders pattern with right shoulder predicted by equidistant channel.
  2. These concepts of A) potential bearish reversal and B) equidistant channel were previously discussed here and here.
  3. Head and shoulders have near-perfect symmetries that are easy to detect.
  4. Patterns on weekly charts are considered significant and would be keenly followed by big players.
  5. The pattern is confirmed when ‘neckline’ is broken.

 

Second chart: Avago Technologies (AVGO)

  1. This stock was discussed during BP class.
  2. AVGO is a home grown tech company.
  3. Stock price consolidated for 2 years before breaking out of $40 high.
  4. Price is now >3x higher at 142 a mere 2 years later.
  5. We covered the concept of consolidation – breakout in this post.

 

Challenge to individual traders

Step #1 of your mission is to master a set of skills namely recognising price action, understanding market psychology, evaluating risk – reward and knowing when to commit to  action.

Step #2 of your mission – extend your tentacles EVERYWHERE!

Achievement? Acquiring an ‘ATM card’ that has withdrawal limit capped only by your imagination, determination and daring. The rest is up to you.

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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