Day trade is about making quick decisions based on all market movements. While indicators such as RSI, MacD and Bollinger bands are useful, many professional day traffickers are dependent on the price action – raw movement of the price of the chart.
The price action begins by trading candlestick analysis. Each candlestick tells a story about buyers and suppliers – longer Vicks may indicate rejection, while stronger body often indicates speed. For example, a hammer light at the end of a dowtrand may suggest a reversal.
Support and resistance levels are another basis for value action. These are areas where the price struggles to move historically. Day traders use them to plan and get out – buy close support and sell close resistance. If the value is broken through these levels of strong volume, it often indicates a new trend.
Map patterns such as flags, triangles and heads and heads can also lead decisions. For example, a fast flag pattern after a strong step upwards is often before another rally. On the other hand, a head-end shoulder pattern may indicate an upcoming fall.
The volume price is a quiet action partner. High volume brakeouts have more than one reliability with low volume. Volume nails can also indicate in institutional activity – large players continue the market.
Finally, the successful day dealers keep charts clean. Many indicators can cause “analysis paralysis”. A minimum setup with main value levels and volume is often more effective. Mix it with a disciplined mentality and you will be able to act more confident.