Everyone asks this question and wants to know the answer: How to know when to buy and when to sell
Here is a simple and yet a workable approach for the solution. It's worth $$$
CadiLIne = Cum( Nos of up counters - Nos of down counters)
(1) Point A, C, E and G were the profitable long setup. They shared the same
Cadi Trend line broke up plus a bullish divergence on the left, then long the
market once the price bars printed in blue color.
(2) Point B, D, f and H were the best time for you to clear your long positions. They
also shared the same characteristics :
Cadi Trend line broke down plus a bearish divergence on the left, then cleared
the long positions.
(3) Area (1) was a longer range of consolidation phase after a strong run up.
(4) Area (2) between point D and E and Area (3) between point F and G.
Form a divergence between Cadi line the index price. Cadi line printed lower
high and lower low where index price run in higher high and higher low. This was
due to the majority of index counters went lower but only a few heavy weight
counters push up the index. During this divergence phase, more of the retailer
unable to make money.
(5) Area (4) from Point H to present. Index price bars all printed in red color. This
clearly tells us that not to take long positions during these periods. Chance of
losing money is too great.
(6) At this moment in time, a question arises. Present price bars are in red color and unable to draw a Cadi trend line, can we long now?
(7) A second approach step in.
Circle I, J and K at the center chart were the more oversold areas and their level
reading almost identical. They should share the same outcome.
I and J eventually had a nice strong rebound (entered long where price bar
changed to blue color, see upper chart orange circle) due to short covering.
Now how about at circle K? At Circle K, indicator is showing round bottom up,
expected rebound soon exactly like Circle I and J.
so what should we do?
WE ONLY NEED PATIENTLY TO WAIT FOR THE PRICE BAR CHANGE TO
BLUE COLOR THEN LONG THE MARKET.
(8) Second chart is my expectation of the rebound target.
TA is a good tool not only guild us to take a right trading decision but also can give us a sense of feeling what the market likely to be in the next movement.
Cheer and hope everyone's huat