Beginner's Guide For Traders About Market Phases and Use Trading Indicators ?
Market Phases
- Accumulation Phase: Accumulation occurs after the market has bottomed and the innovators and early adopters begin to buy, figuring the worst is over.
- Markup Phase: This occurs when the market has been stable for a while and moves higher in price.
- Distribution Phase: Sellers begin to dominate as the stock reaches its peak.
- Markdown Phase: Downtrend occurs when the price is tumbling down.
Average True Range (ATR) is a technical indicator measuring market volatility.
It is typically derived from the 14-day moving average of a series of true range indicators.
It was originally developed for use in the commodities markets but has since been applied to all types of instruments.
The higher the volatility the higher the ATR, the opposite goes for when the volatility is low.
Do you use moving averages?
If you do, then try and use them to identify the direction of the trend.
It's simple, plot your 80 EMA and if the price is steadily moving beneath the 80 EMA and testing it, as it continues down, it tells us that the price is trending downwards.
If the price is above the 80 EMA and is testing it, as it continues upwards, then it tells us that the price is trending upwards.
Give it a try and see how it works out, when the price tests the 80 EMA it often leads to great trading opportunities.
Tweezer tops and tweezer bottoms are dual candlestick formations that represent a reversal.
Tweezer tops consist of a bullish candle with a large upper wick followed by a bearish candle with the same length wick. This suggests a bearish reversal is approaching.
On smaller time frames this often looks like a double top as it shows price being rejected from the same resistance zone twice!
The opposite applies for tweezer bottoms, they imply a bullish reversal is approaching!