A very interesting situation was presented by a member of the Talking Chart's Facebook page.
He decided to put into practice the patterns he learned from the book. The chosen instrument for this exercise was the Philippine Stock Exchange Index (PSEI).
He sent me a screenshot and asked how he was doing. He was right in his conclusions but something in his chart attracted my attention.
There is a useful lesson here that is why I decided to share it with you.
Take a look at the next charts
The first one (a daily chart) is showing how the PSE index looks now.
The second one is displaying the same period but a year ago. Again it is a daily chart. Both charts are made with TradingView
Do you see the difference?
In the current chart, there is more white space - more gaps and small candlesticks. Those many gaps mean a lot of emotions are in play right now. That makes it easier for the market to swing in one or another direction and to break previous highs or lows.
Is this wrong?
Not wrong. The market can't be wrong. It is different and if we want to continue to trade this instrument (we can always search for more liquid markets) we need to adapt to those changes.
Let's focus on some changes:
One thing is certain in trading and it is that everything is changing. When this happens don't be scared, find the changes and adapt.
I hope you enjoyed this lesson. Expect more to come.
Now, let's find your missing piece!
Founder of Piece of Trading
Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer
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