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How to Train Your Eyes to See Charts Like a Pro (Part 2)
08/17/2010 12:01 am EST
You see my perspective. Maybe you have your own perspective, a different perspective on this same chart. That's what makes markets!
Where do you think this market is headed now? You have my market map in front of you. Can you see the probable path of price?
Is price likely going to break the current lows and begin a run to test the prior major swing low?
Is price likely going to head higher and test the upper Multi-Pivot Line and perhaps even break above the recent swing highs, heading for a test of the prior major swing high?
Are there any clues on the charts in front of us that may give us a clue to the likely direction price will take from here?
When I focus in on the action between the higher and lower multi-pivot lines, I notice that the inside swing lows that were lower and lower have been broken to the upside. I added a dotted change in behavior line connecting these broken swing highs with the low of the prior gap. I also notice that I could have drawn the same action in on the high swing lows that follow.
Can you see where that up-sloping line should have been drawn and where it was finally violated as price failed at the upper multi-pivot line? If you can't see it easily, print out the chart and mark the swing lows, then connect them with an up-sloping line that touches the bottom of the current open gap. The more you practice drawing and marking out market structure like swing highs and lows, double tops and bottoms, and open gaps, the better a chartist you will become; and again, your trading will improve as you practice.
More tomorrow in Part 3…By Tim Morge of MarketGeometry.com
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