Reply to thread

If I had to trade this chart (as of today) it would be long based on the very substantial volume in the past week. But I probably won't trade it given that there is no reasonable low risk point to set up stop loss, and substantial resistance at low $3ish.

If looking at the chart as it was originally posted, I would also not trade it although I would favour a break to the down side as suggested originally by Beamstas.

I guess what I am trying to say is reading chart is one part of trading, but the chart pattern also need to provide a decent set up from a risk reward point of view.

I agree with you here. I do it for 2 purpose:

1 - Not having too much exposure to a single sector. E.g. every coal share is looking good on the charts at the moment. But I won't want to have 50% of my open positions on that 1 commodity. You never know that the Chinese communist party might announce an Earth Month where they black out Beijing or something like that.

2 - To see stocks that can hold up fundamentally. I will increase my risk if I am more confident based on the fundamentals.

Of course, with scalping the SPI there is no point following any news. The only thing about news is to know when they will be released. Same with FX.

10,000 post vs 600. Go easy on the hot blooded noob would you...