Reading Special Bar Combinations - Crypto Academy / S5W8 - Homework Post for @sachin08"

in hive-108451 •  7 months ago 

Hello guys, it is already the last week of Season 5 and I'm glad to participate in lessons presented by professor @sachin08 on Reading Special Bar Combination. Let's get started...

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Explain Price Bars in your own words. How to add these price bars on the chart with proper screenshots?


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The Price Bar

Just like other forms of technical indicators used in the representation of chart analysis of an underlying asset like the candles, Lines, Hollow candles, Area, Heikin Ashi, etc, the Price Bar is no exception. That is, it is a bar representation of the trading and underlying effect of the buy and sell activities of a given asset which is hence shown on a chart analysis. The demand and supply push that happens in a gone set is observed to be shown in these price bars. Therefore when we have more buying pressure in the trade, this would represent an Uptrend movement of price Bars in the trend analysis.

This is also the same for scenarios where we have more selling pressure where selling activities outweighs that d buying pressure. We have the Price bar observed in a downtrend movement. The Uptrend movement of Price bars is correlated with the presence of Higher highs and Higher Lows in its occurrence whereas the Dpwntrend movement of price Bars comes with Lower Lows and Lowe highs in its occurrence. There the overall Trend changes in a given market can be identified by the use of the price bars.

Furthermore, from its structural nomenclature, it comes with Open, Close, High, and Close points for every period taken. These all represent the start of a trend, the end of a trend, the peaks and lows attained in a day which hence can be calculated to derive the required performance of an asset.

Adding the Price Bar on a Chart

I will be demonstrating this process using the TradingView Site.

  • Launch the Trading View Site and hence click on the Chart Option
  • From the Headies, click on the icon with the candlestick symbol to select the Price bar
  • From the options, click on the Bars to effect selection.

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How to identify trends using Price Bars. Explain both trends. (screenshots required)


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Before the identification of Trends, there should be the existence of the forces of demand and supply mechanism already in which hence set the pace for either element taking the order of the day. This simply brings about the presence of the higher high and higher low levels which depicts the occurrence of an Uptrend and when we have lower lows and lower highs, we have the presence of the downtrend in the trend.

Identifying an Uptrend using the Price Bars

Usually, we all know that an Uptrend comes with a reasonable level of sequence in the formation of Higher-higher and Higher Lows. But this does not completely define the identification of the Uptrend as other supporting signals needed to be observed. Most importantly we expected to observe the Close higher than the Open as well as the Lowof the Day and higher than the day before we can ascertain a valid uptrend of the Price Bar.

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Identifying Downtrend using the Price Bars

This is the typical opposite of the Uptrend scenario which is prevalent with the presence of the Lower lows and lower highs. There is a typical presentation of the Day Close lower than the previous Close. Therefore when we see the days close always lower than the close of the previous day, this simply denotes a downtrend movement of the Price bars. This comes with the occurrence of the Lower low signal in trend movements for valid confirmation of trend direction.

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Explain the Bar Combinations for Spending the Day inside for both conditions. (Screenshots required)


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Spending the Day Inside

Just as the name implies so it is the concept behind the Spending the Day Inside of the price bars. There is the presence of two bars with the latter price bar being enveloped by the high and low ranges. This simply means that in a given price bar of an underlying asset, the present day's High is lower than the previous day's high as well as the day's low is observed to be higher than the previous Day's low.

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This type of price bar places the Day's price bar at the center of the precious Day's price bar and hence comes with a lot of indecision for the next trend action. From the image above we can observe the formation of this trending concept with no anticipated market direction thereafter.

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Explain the Bar Combinations for Getting outside for the Day for both conditions. (Screenshots required)


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Just as explained for that of the Inside of the day scenario, this is also an opposite scenario where the day's price bars are found all outside the preceding candle. The Open and close ranges just as observed inside the "Day inside scenario" are now found all outside in the "Getting Outside for the Day".

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Most importantly we have combinations where these scenarios are either in an uptrend direction or downtrend direction.
In this first case, we have the Open as the low point whereas the Close is at the High point.

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On the other hand, we have the Open representing the High level whereas the close indicates the Low level of the price bar.

Both scenarios represent the Trend reversal or continuation as the case may be. For a downtrend direction, we should likely anticipate a reversal when the close is at the high whereas a trend continuation is anticipated for an uptrend direction.

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Explain the Bar Combinations for Finding the close at the open for both conditions in each trend. (Screenshots required)


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Finding the Close at the Open for Uptrend Scenario

In this Price Bar combination for Uptrend scenario, we find a situation where trend direction is observed in a higher with the Open and Close ranges observed at per in the upper high of the candlesticks. This indicates an uptrend price movement but when observed near the Low, we may likely anticipate a reversal in price trends.

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Finding the Close at the Open for Downtrend Scenario

This also involves a scenario where the Cloe and Open of the Price bars are observed in a downward direction. Both the Open and Close which are observed at per or near each other are seen in the Low which hence indicates a continuation of downward movement. But if observed on the high, this indicates a possible market reversal.

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Conclusion


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Indeed the use of Price Bar readings is another additional technical indicator available to the investor/trader for the sole purpose of forecasting and making informed trade positions for profiteering. With the different combinations found where we have the identification of uptrend and downtrend scenarios, spending the day Inside and Outside as well as the Finding the Close at the Open, are all important signals which can give the trader more valid entry positions to attain a reasonable open position.

Its nomenclature which comes with the Open, Close, High, and Low with the occurrence of Higher high, higher lows, lower lows, and Lower highs levels in its trend representation are all valid signals while making a trade decision.

Thank you Professor @sachin08 for your lessons.

All images used are screenshots from the Tradingview Site.

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