Thread by @iRajaDey

[1/7] Technical analysis can be very complicated if you don’t focus on the most important basics, such as support and resistance levels. These areas represent a psychological level where the game is played between buyers and sellers.

#priceaction #trading #stocks #forex

[2/7] Let me give you an example:
If sellers overcome buyers, they will push the price below the support level. Some buyers will feel afraid to lose money because they see that the support level is broken. So, they will get out, and sell the market again to cover their loss.

[3/7] Other participants will notice that sellers are in control of the market, they will decide to sell the market and help the bears push the price to go down.

[4/7] The inside bar is one of the most reliable price action signal that will give you the right time to enter the market and make big profits. Once you understand how to use it in combination with these levels, you will get what the market is telling you clearly,

[5/7] and you will make better trading decisions.
The illustration shows how sellers broke the support level. The formation of the inside bar pattern after the breakout of this level signals indecision in the market.Right now, no one knows if the support level is broken.

[6/7] If you sell at market immediately after the breakout of this level, you are making an aggressive entry, which is little tricky and dangerous, because the breakout is not confirmed.

[7/7] But if you are used with trading inside bars, and you understand the psychology behind their formations, you will know that the safest entry should be after the breakout of this pattern.