It could be important to monitor news flow and past price patterns of support and resistance. This chart is your road map in planning ahead. Keep these levels in mind as these are the most recent psychological price points of importance.
Chart traders are artists. Those who trade solely off charts are trying to gain an edge by mapping out the road ahead by drawing familiar chart patterns. Today in RIG was a perfect example of how a bullish acsending channel breakout can lead to higher prices and a bearish rising channel breakdown can lead to lower prices. I chose a 1 min chart to map out the direction of each potential move keeping in mind that patterns do fail and money management is king.
Squat Bar is a good indication for a market reversal in a congestion market. Almost all charting programs have volume indicator, big volume in a small range bar (Range = H-L) creates a Squat Bar. The logic behind is very simple. If market can’t continue its trend with good volume, most likely it will reverse.
