StochRSI indicator and support and resistance levels

前天

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Have a nice day today.

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The StochRSI indicator on the left chart is slightly different from the StochRSI indicator on the right.

The StochRSI indicator on the left chart is the StochRSI indicator provided by default in TradingView, and the StochRSI indicator on the right chart is an indicator with a modified formula.

The StochRSI indicator is a leading indicator that is reflected almost in real time.

Therefore, it reacts sensitively to price changes.

Although it is advantageous because it reacts sensitively, it also increases the possibility of being caught in a fake, so I thought that a slight delay(?) was necessary, and so I created the StochRSI indicator on the left chart.

If you look at the relationship between the K and D of the StochRSI indicators on the two charts, you can see that there is a big difference.

In the end, you can predict the movement by checking whether the movement of the K line has escaped the overbought or oversold section.

However, I think that you will receive information that can determine the sustainability of the trend depending on the positional relationship between K and D.

Therefore, it is important to distinguish the inflection points that occur in the StochRSI indicator.

This is because these inflection points provide important information for drawing trend lines.

Therefore, the StochRSI indicator on the left chart, which better expresses the inflection point, is being used to draw the trend line.

(Unfortunately, this indicator was not registered on TradingView because I did not explain it well.)

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As a new candle was created, the StochRSI indicator on the left chart is showing an inflection point on the K line.

The StochRSI indicator on the right chart is showing a transition to a state where K < D.

We will have to check whether the inflection point was created only when today's candle closes, but I think that the fact that it is showing this pattern means that there is a high possibility of a change in the future trend.

Since the next volatility period is expected to start around July 2nd (July 1st-3rd), I think it has started to show meaningful movements.

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It is true that you want to buy at the lowest price possible and sell at the highest price.

However, because of this greed, one mistake can lead to a loss that can overturn nine victories, so you should always be careful.

Therefore, if possible, it is better to check for support and respond.

In that sense, I think it is worth referring to the relationship between K and D of the StochRSI indicator on the left chart.

This is because the actual downtrend is likely to start when K < D.

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In order to check for support, you definitely need support and resistance points drawn on the 1M, 1W, and 1D charts.

Ignoring this and checking for support at the drawn support and resistance points can result in not being able to apply the chart you drew to actual trading.

Therefore, you should draw support and resistance points first before starting a trade.

Otherwise, if you draw support and resistance points after starting a trade, you are more likely to set support and resistance points that reflect your subjective thoughts, so as I mentioned earlier, you are more likely to lose faith in the chart you drew.

If this phenomenon continues, it will eventually lead to leaving the investment market.

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It is important to determine whether there is support by checking the correlation between the StochRSI indicator and other indicators at the support and resistance points drawn on the 1M, 1W, and 1D charts.

Even if the inflection point of the StochRSI indicator or other indicators occurs at a point other than the support and resistance points you drew, you should consider it as something that occurred beyond your ability to handle.

In other words, you should observe the price movement but not actually trade.

As I mentioned earlier, if you start to violate this, you will become less and less able to trust the chart you drew.

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Accordingly, the basic trading strategy I suggest is to buy near the HA-Low indicator and sell near the HA-High indicator.

However, since the HA-Low and HA-High indicators are expressed as average values, they may move in the opposite direction to the basic trading strategy.

In other words, if the HA-Low indicator is resisted and falls, there is a possibility of a stepwise downward trend, and if the HA-High indicator is supported and rises, there is a possibility of a stepwise upward trend.

Therefore, the basic trading strategy mentioned above can be considered a trading strategy in the box section.

In the case of deviating from this box section, it is highly likely to occur before and after the volatility period indicated by the relationship between the trend line using the StochRSI indicator mentioned above and the support and resistance points drawn on the 1M, 1W, and 1D charts.

Therefore, special care is required when conducting new transactions during the volatility period.

This is because there is a high possibility of being caught in a fake when trading during the volatility period.

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The DOM(60) and DOM(-60) indicators are good indicators to look at together with the HA-Low and HA-High indicators.

The DOM indicator is an indicator that comprehensively evaluates the DMI, OBV, and MOMENTUM indicators.

Therefore, the DOM(60) indicator is likely to be at the end of the high point range, and the DOM(060) indicator is likely to be at the end of the low point range.

In the explanation of the HA-Low and HA-High indicators,
- I said that if the HA-Low indicator receives resistance and falls, there is a possibility that a stepwise downtrend will begin,
- and if the HA-High indicator receives support and rises, there is a possibility that a stepwise uptrend will begin.

In order for an actual stepwise downtrend to begin, the price must fall below DOM(-60), and in order for a stepwise uptrend to begin, it must rise above DOM(60).

In other words, the DOM(-60) ~ HA-Low section and the HA-High ~ DOM(60) section can be seen as support and resistance sections.

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If these correlations start to appear, I think you will be able to create a trading strategy that fits your investment style without being swayed by price volatility and proceed with trading.

The reason for analyzing charts is to trade.

Therefore, the shorter the time for chart analysis, the better, and you should increase the start of creating a trading strategy.

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Thank you for reading to the end.
I hope you have a successful trade.

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前天

註釋

Even if you interpret the StochRSI indicator of the auxiliary indicator well, it is not easy to apply it to actual trading.

The reason is that the K and D lines of the StochRSI indicator, which is an auxiliary indicator, are curved and it is not easy to find support and resistance points.

To compensate for this, the StochRSI 20, 50, and 80 indicators were added.

The StochRSI 50 indicator indicates that if K is below the 50 point, it is a time to focus on finding a buying period, and if it is above, it is a time to focus on finding a selling period.

Therefore, it indicates the support and resistance points corresponding to the midpoint of the StochRSI indicator.

The actual trend is likely to occur when it exceeds the StochRSI 20 or StochRSI 80 indicator.

In other words, if the price falls below the StochRSI 20 indicator and maintains, it is likely to show a downward trend, and if the price rises above the StochRSI 80 indicator and maintains, it is likely to show an upward trend.

Therefore, the StochRSI 20 indicator is likely to be in the support zone, and the StochRSI 80 indicator is likely to be in the resistance zone.

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As mentioned in the text, trends are likely to occur before and after periods of volatility.

Therefore, you can receive information that will allow you to create a detailed response strategy that is useful when trading between the DOM(-60) ~ HA-Low section and the HA-High ~ DOM(60) section.

The key is to comprehensively evaluate various interpretation methods and create a trading strategy that suits your investment style.

Therefore, if you do not have a basic trading strategy concept, you will have difficulty comprehensively evaluating various interpretation methods, and you will likely end up trading incorrectly.

Therefore, it is necessary to establish a basic trading strategy that suits you.