"Fed's Powell:
- We estimate neutral to be between 2% and 3%
- If higher rates are required, we will not hesitate"
Good investment decisions traders👌.
"Fed's Powell:
- We estimate neutral to be between 2% and 3%
- If higher rates are required, we will not hesitate"
Good investment decisions traders👌.
Support and resistance trading is one of the most basic forms of technical analysis, yet it can also be one of the most effective when done correctly.
One of the most interesting aspects of support and resistance is the fact that these levels have a changing nature. So, broken support will often become resistance when retested from below and broken resistance will often become support when retested from above. Traders can capitalise on this common dynamic by looking to “trade the retest”.

So, in this example you can see that we have a really clearly defined support level in the market. We have two big touches giving us our support level, we then get a further test of support where once again demand kicks in and holds price up. However, you can see that support is heavily diminished at this level as the rebound off support is only very shallow and price then rolls over and breaks down below support.
So, at the point at which price has broken down through this support level we now know that demand has been overwhelmed and supply is now stronger in the market at this level. So, as price then trades back up to retest this broken support level we can then anticipate that the level will act as resistance and we can use it as an entry point for a sell trade.
This type of entry is especially great during trending markets where price action tends to display this sort of staircase structure where in bearish trends we form support, break support retest and continue lower and in bullish trends we trade up, form resistance, break resistance, retest it and then continue higher.
When trading in this manner, we can either look to just trade the level or we can take a more conservative approach where we wait for price action confirmation.

So, looking at this example you can see that price is moving higher, we then form this clear resistance level at this point, identified by two touches at the level. Then we can see that demand overtakes supply and price breaks out higher. So, once price has broken above that resistance level we can then wait for price to come back down and retest it, anticipating that the level will now act as support allowing us to place a trade, positioning for a resumption of the bullish move.
However, instead of just trading the level and hoping for price to find support what we can actually do is wait to see how price reacts as it tested the level, looking to identify reversal candles that give us a clue that the level is going to hold. And, if you look at the price action that the market displayed as the level was retested you can see something interesting.
So, we traded back down to test the level, and we actually pierced a little below the level which is common, we then stalled and got this small bullish candle and then you can see on the next candle we got this big bullish engulfing candle once again which gives us a strong sign that demand has stepped in and a reversal higher is underway, allowing us to place our buy trade. So, this is the type of process that we always want to follow when using these levels to place trades.

So, if we turn the RSI indicator back on for this example you can see that we get another fantastic confluent signal. At the point that price trades back down and retests that broken resistance level, now turned support, the RSI indicator was heavily oversold telling us that momentum is overstretched to the downside and a reversal higher is likely. So once again we have confluence between all three elements, support/resistance, the indicator and price action itself.
We first of all identify the level by highlighting importance highs/lows that line up and then we wait to see how price reacts once we test the level, waiting to identify reversal candlesticks. Finally if we are using any indicators such as the RSI or any others, we want to make sure that they give us a confluent reading.
Hopefully this has now got you thinking about support and resistance in a more strategic manner and opened up some different ideas for you to consider when looking to place trades based on support an resistance.
Good decisions, Traders.👀👀👀
The ATR or Average True Range was one of the technical analysis indicators presented in J. Welles Wilder's book New Concepts in Technical Trading System in 1978.
Wilder considered average true range technical analysis as a tool to measure the volatility of commodities, but it can also be used for other types of assets. As a volatility indicator, ATR doesn't take into account the price direction. Instead, it examines how much the price of an underlying asset moves during a specific time frame and whether there are price gaps. For an hourly time frame, the ATR indicator value is calculated for each hour. On a daily time frame, the calculation is performed for each day, and so on.
According to Wilder, the average true range indicator formula is centered around the calculation of true ranges for the specific period. It is based on three methods which are fairly simple to use:
The true range for the selected period is obtained as the highest value from the above three methods. As the absolute value is considered, it doesn’t matter whether it is positive or negative. The average value is derived from the values for each period, which, by default, is 14 periods. Wilder smoothed the generated value for a 14-period ATR using the previous ATR value, in the following manner:
ATR = [(Previous ATR x 13) + Current TR] / 14
For periods other than the suggested 14 periods, the general average true range indicator formula is:
ATR = (Previous ATR * (n - 1) + TR) / n
Depending on your trading strategy, you can change the number of periods included in the ATR calculation. Shorter time frames will provide more signals, while longer time frames will provide fewer trading alerts.
The average true range indicator looks like a single line in a section under your chart and the line can move up or down. Reading the ATR indicator is not complicated: a higher ATR means increased volatility, while a lower ATR signals lower volatility. However, remember that ATR does not give signals about the potential trend direction – it only shows what is happening with the price volatility. Let's look at the graph below.

You can see that during a stronger upward or downward movement of the price, the volatility is increased.
The ATR is a useful indicator because it shows what happens with the price volatility of a given asset. However, be careful when defining your average true range trading strategy because the indicator should not be used as a standalone tool. You can combine ATR with price action analysis and with other indicators that will provide alerts about the price direction or the momentum.
The average true range Indicator is commonly used by traders to find potential breakouts and to define stop-loss orders to avoid premature termination of their positions.
The ATR indicator can be used to find potential breakouts. Try to monitor the ATR value and look for a multi-year low value. When you find such a point, look for the price to break the support level, which will be an indication that the volatility will increase and breakout may appear.
Traders can use the ATR to identify potential entry and exit points for their trading positions. Keep in mind that periods of high or low volatility will eventually end, and you can use this to your advantage. For instance, after a period of low volatility, traders expect the volatility to increase and this can be a point where you enter or exit your position.
One way you can use an average true range strategy is to identify potential points where you can set stop-loss orders or trailing stop-loss orders. By using this indicator, you dodge the possibility that you place narrow stop loss in times of high volatility or very broad stop-loss order during low volatility. Look at the following graph to see why ATR can be used when placing a stop-loss order.

The white arrows show periods of increased volatility with respective price movements during the higher volatility (the white circles). By incorporating the ATR in your trailing stop loss decisions, you will ensure that the profit is locked in and that you don’t define tight stop loss, which will result in a premature exit.
In times of decreased volatility (sideways market movement), you can set an adequate stop-loss, which is narrow enough to ensure that you collect a certain level of profits. You can use the ATR value as a base to define your trailing stop, which is beneficial because every time the volatility moves, your stop loss will move as well. When the price action changes are not in your favour, the stop loss can be activated based on the set distance from the ATR value.
Aside from these common applications, traders have developed numerous average true range strategies for determining and confirming potentially profitable signals. Along with the average true range, they also include moving averages indicator to determine the trend direction or the RSI indicator to measure the momentum.
An ATR trading strategy for a stop loss can be defined when you set your stop-loss order below or above the support and resistance levels. The distance of the stop loss from the ATR value is usually set by traders at 1, 2 or 3 times the ATR value. Of course, this doesn't mean that this should be taken as a rule, since traders create their own average true range trading strategies as well as their own general trading strategy.
Good trades, Traders.👀👀👀
Traders here the interest rates around the modern world, enjoy the ups and downs.👀👀👀
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