For the sake of offering some valuable general information about trading the market.
70% of all trading on any one day is done by computers and algorithms (not fundamentals). Yes, the fundamentals are important when they come out but that is not every day. The big companies and big traders trade every day with the idea of making more money than is lost and increasing their profits.
How can they do that? They do that by using the charts.
One additional piece of valuable information is that the 200 (10-minute, daily, weekly, and monthly) Moving average line has been established as highly valuable for deciding trend. Whether it is an intraday, daily, weekly or long-term monthly trend, the 200 MA is used strongly by computers and algorithms.
As such, I want to give you an example of what I mean. Here below is the 15-day 10-minute chart of the DOW. In it you will see the 200 10-minute MA. You will notice that the first 4 days (of the 15 days), the DOW traded below the line but did test the line several times without breaking convincingly above the line and then on the fifth day and likely because of some news, the DOW broke above the line decisively and got into a short term-uptrend. As you can see, the line has been tested twice but not broken and both times a rally occurred from the line.
Having said that, there is major resistance at 45073 (all-time high in the DOW) and the DOW got up to 44976 3 days ago and the bulls have not yet been able to break above it. The most recent retest of the line was yesterday when it dropped to 44548. As such, the computers and algorithms will sell if that level is broken and will buy strongly if 45073 is broken.
This is what the computers and algorithms do and if you follow the charts, it can be of big help
70% of all trading on any one day is done by computers and algorithms (not fundamentals). Yes, the fundamentals are important when they come out but that is not every day. The big companies and big traders trade every day with the idea of making more money than is lost and increasing their profits.
How can they do that? They do that by using the charts.
One additional piece of valuable information is that the 200 (10-minute, daily, weekly, and monthly) Moving average line has been established as highly valuable for deciding trend. Whether it is an intraday, daily, weekly or long-term monthly trend, the 200 MA is used strongly by computers and algorithms.
As such, I want to give you an example of what I mean. Here below is the 15-day 10-minute chart of the DOW. In it you will see the 200 10-minute MA. You will notice that the first 4 days (of the 15 days), the DOW traded below the line but did test the line several times without breaking convincingly above the line and then on the fifth day and likely because of some news, the DOW broke above the line decisively and got into a short term-uptrend. As you can see, the line has been tested twice but not broken and both times a rally occurred from the line.
Having said that, there is major resistance at 45073 (all-time high in the DOW) and the DOW got up to 44976 3 days ago and the bulls have not yet been able to break above it. The most recent retest of the line was yesterday when it dropped to 44548. As such, the computers and algorithms will sell if that level is broken and will buy strongly if 45073 is broken.
This is what the computers and algorithms do and if you follow the charts, it can be of big help
