How to read charts, identify trends, and manage risk.
The Golden Rule: Risk Management
Never risk more than 1-2% of your portfolio on a single trade. Trading is about survival, not just winning.
Candlestick charts tell you the battle between buyers (bulls) and sellers (bears).
The close price was higher than the open. Buyers were in control.
The close price was lower than the open. Sellers pushed the price down.
Measures the speed of price changes. An RSI above 70 suggests the asset is Overbought (price might drop). An RSI below 30 suggests it is Oversold (price might bounce).
Smooths out price action to show the trend. If the price is above the 200-day MA, the long-term trend is generally Up.
Markets don't move in straight lines. They move in waves.
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