Thread by @dmdsplyinvestor

Dow Jones - Trendline Hindsight lessons! Why simple trendlines work? coz of pure demand and supply zones. Observe how the channel acted as support and resistance throughout the fall starting from the 20th Feb. Today is the 1st sign of reversal signs 1/n

Why is it the first sign of reversal? higher low has formed for the first time in the entire fall and the price is piercing inside the channel as I post this. In a falling channel, the downward sloping channel on the right side acts as strong support always. 2/n

In an upward rising channel, the right trendline will act as support always. Another point to note is that in hindsight everything will look good, but in reality, it will be very challenging to trade this perfect downtrend #DJI #trendlines #trading #trendfollowing

Another observation - Observe how the CBOE Volatility index is reversing from the confluence of horizontal support and trendline support. Confluences are strong areas to take trades. Trendlines work in all markets across the world. It is up t us to wait for the right opportunity.

The risk at the confluence of multiple supports is the least Risk but high reward trades. And, one needs the courage to take the trade at the first sign of reversal. This is the most important skill for an investor or a trader - waiting patiently for the right levels.

Updated CBOE VIX chart - at this point, one should either book partial profits or trail SL and should not let this turn into a loser.

You must be completely out of the long trade now if you were in one.

So, the close was a breakout of the rising wedge. A very positive sign. On Monday, a long trade will be taken if the channel breaks on the upside or a short trade if the lowest rising red support is broken. #DJI #trading #trendlines