ATMASphere Aug 2014

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5 Price action tips that will make you a better Swing Trader The areas that I have highlighted are the correct support and resistance levels. Often times you will hear traders say something like this: "The support level for XYZ stock is 28.76." What is price action? Price action for swing traders is the art of looking at individual candles to determine the probable direction of a stock - without using any technical indicators. Ultimately, analyzing price action tells you who is in control of a stock. It also tells you, who is losing control: the buyers or the sellers. Once you are able to determine this, you can pinpoint reversals in a stock and make money. Learn the price action tips on this page and I guarantee you that you will be a better swing trader. Let's begin. Tip # 1. Identify support and resistance levels Specific price. This is a no brainer. Identifying support and resistance levels is one of the first things you learn in technical analysis. It is the most important aspect of chart reading. But, how many traders really pay attention to it? Not many. Most are too busy looking at Stochastic, MACD, and other's .Some traders think that a support or resistance level is a specific price. Wrong. It's an area on a stock chart. Let me give you an example. AUGUST <strong>2014</strong> ATMASPHERE | 8
Tip # 2. Analyze swing points Swing points (some call them "pivot points") Are those areas on a stock chart where important short term reversals take place? But not all swing points are created equal. If fact, your decision to buy a pullback will depend upon the prior swing point. Here is an example: Look at the area that I have highlighted in green. You may have considered buying this pullback. Now look at the prior swing point high (yellow highlighted). There are two problems with buying this pullback. First, there isn't much room to work with! The distance between the pullback and the prior high is too small. You need more room to run so that you can at least get your stop to break even. The second problem is this: The prior high (yellow area) is composed of a cluster of candles. This is a strong resistance area! So, it will be very difficult for a stock to break through this area. Instead, look to trade pullbacks where the prior high is only composed of one or two candles. AUGUST <strong>2014</strong> ATMASPHERE | 9
Page 2 and 3: CONTENTS Letter from the President
Page 4 and 5: EDITOR’S NOTE In this issue - 1.
Page 6 and 7: 2. Symmetrical Triangles: These are
Page 10 and 11: Tip # 3. Look for wide range candle
Page 12 and 13: Rajat Dutta is a system designer an
Page 14 and 15: 5. High quality trades, many times,
Page 16 and 17: method that we will follow. Now why
Page 18 and 19: Understanding Market Profile Introd
Page 20 and 21: Hi, I often go with nick name Pit T
Page 22 and 23: Within an average period of less th
Page 24 and 25: World's FIRST E-Library of Technica
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ATMASphere Aug 2014

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