Patterns of buy and sell signals
At this point, we'll delve deeper into what the Point-and-Figure diagram might look like. In giving buy or sell signals which has a famous pattern Shown in all samples.The description will give only 2 examples. The first form is a
buy signal on the breakout of a triple top and a
sell signal on the downside breakout below a bullish
support line are issued. Because if you understand the principles of
buying or
selling signals Any
pattern formation is easy for
traders to understand
technical analysis.
The buy signal following the 3rd peak breakout was actually a breakout of
resistance. Which according to the principles mentioned in the subject of
support and
resistance breaking through
resistance Refers to a
buy signal. The next question is How do you know where is
resistance? The answer is that the
resistance is at the peak of the last 2 X
signals. Because the X
signal turns into an O
signal, it means
selling pressure is greater than
buying pressure. So it's a
resistance line. The X
signal crosses above, indicating that demand outstrips supply. It will inevitably result in the price rising. Therefore, a
buy signal occurred.
The sell signal section When the price breaks the
support line up and down, it means that the
selling pressure is greater than the
support along the trend line or that there is an oversupply. Inevitably results in the price dropping Because
traders who want to buy who used to
buy along the trend line are now unable to know
technical analysis and accept it, which may be due to the fact that
traders who want to
sell have higher power, so whoever escapes first You don't have to face the stock condition, which makes it even more a trigger of
selling pressure. So a
sell signal was born.
However, it should also be noted in the figure that the breakout point may not yet give a
buy signal. Or
sell signal come immediately In addition, it is said that the ascending triple top gives the most reliable
buy signal, while the breakout of the triple bottom gives the most reliable
sell signal. But to trust How much you get, let's see for yourself!