mishhal_ali

What you learn from this post
1. Comprehensive Knowledge about basic trading
2. Pro Tips for beginners
3. Realistic Candlestick Patterns Knowledge
4. Most important at the end of the post you are able to read the chart like a pro.
{future}(SOLUSDT)
Hey, fellow trader! Let’s break down the recent price action of Perpetual Futures (as shown in the chart) with a professional eye, focusing on the two key moves I’ve highlighted with drawings: an upward move and a subsequent downward move.

The Upward Move: Building Momentum
Initial Consolidation (Around 165-170 USD)where the price hovers between approximately 165.34 USD (support) and 170 USD. This is a common phase where buyers and sellers are testing each other’s strength. Notice the smaller candlesticks indicating indecision before the breakout.Pro Tip: If you are a beginner, look for a tight range like this as a potential launchpad. A breakout above the upper boundary (around 170 USD) often signals bullish intent.
Breakout and Uptrend (170 USD to 206.44 USD)The price breaks above 170 USD with strong green candlesticks, indicating aggressive buying. This marks the start of an uptrend, pushing #sol板块 from 170 USD to a high of 206.44 USD.The momentum is clear as each candle closes higher than the previous one, forming a series of higher highs and higher lows a classic bullish trend.Pro Tip: Enter a long position after a confirmed breakout (e.g., a close above 170 USD with high volume). Set a stop-loss below the recent low (around 165 USD) to protect against a fakeout.Pullback to Support (Near 185 USD)
After reaching 206.44 USD, the price pulls back to around 185 USD, where it finds support (highlighted by the horizontal line). This is a healthy retracement, allowing traders to re-enter or add to positions.Pro Tip: Use this pullback to your advantage. Wait for a candlestick confirmation (e.g., a bullish engulfing pattern) at this support level before going long again.

The Downward Move: Reversal and Correction
Reversal Signal (206.44 USD Peak)At 206.44 USD, you’ll notice a large red candlestick, signaling a rejection. This is often a sign that sellers have stepped in, overpowering buyers. The high wick indicates failed attempts to push higher.Pro Tip: Watch for reversal patterns like this (e.g., shooting star or bearish engulfing) at resistance levels. It’s a cue to tighten stops or consider shorting.
Downtrend Initiation (206.44 USD to 185 USD)Following the reversal, the price starts a downtrend, dropping sharply from 206.44 USD back to the 185 USD support level. The red candles dominate, showing strong selling pressure.The sequence of lower highs and lower lows confirms the bearish momentum.Pro Tip: If shorting, enter after the reversal candle closes and set a take-profit near 185 USD (a known support). Place a stop-loss above 206.44 USD to manage risk.Consolidation and Potential Bounce (Around 185 USD)
The price stabilizes around 185 USD, as seen with the current price of 185.84 USD. This could indicate a temporary base where buyers might defend the level, or it could break lower if selling pressure resumes.Pro Tip: Be patient here. Wait for a clear breakout above 185 USD for a long, or below 165.34 USD for a short. Avoid jumping in prematurely let the market show its hand.
Key Takeaways for Beginner Traders
Trend Identification: Uptrends (higher highs/lows) and downtrends (lower highs/lows) are your roadmap. Use support (e.g., 165.34 USD) and resistance (e.g., 206.44 USD) levels to plan entries and exits.Risk Management: Always use stop-losses to limit losses. For the upmove, a stop below 165 USD would have protected you; for the downmove, a stop above 206.44 USD would have been wise.Confirmation: Don’t trade on hope wait for candlestick patterns or a break of key levels to confirm your move.
Patience: The current consolidation at 185 USD is a test. Let the price action unfold before committing capital.

Keep practicing with charts like this, and soon you’ll be reading the market like a pro! If you’d like a deeper dive or have more questions, feel free to ask. Happy trading!

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