/biz/ - Business & Finance

>>17355030
>Now what makes you think this high will be a bearish reversal for the day and not the previous stair step earlier this morning?
I'd give it a 50/50 chance of going either way at this point. I always start scaling out of my positions at previous support though. I trade futures purely on a technical basis and I'm best at mean reversion. I look for horizontal lines of support on different time frames and wait for the price to not touch the support but emphatically break through it as it did this morning. Notice the horizontal red line, that was the support point I was paying attention to at the time. When we broke through, I waited for it to drop a certain amount (a certain fraction of a standard deviation I prefer) then I bought. When we got just about back to that support I sold. My theory is that support line has lots of buyers who were anchored to their buy price. When we broke through unexpectedly they all got scared and were like oh fuck muh moneyz. As it descended they started panic selling. At the bottom, more big money came back in and pushed us back up. Along the way the people who panic sold earlier started getting confident again and decided they were ready to try to make some of the money back they lost earlier. Since they were anchored on that original support price though, when it got back around that point they started selling again setting off a bear reversal.
That's a big part of how I analyze charts. I think about the psychology of the market, especially retail and try to exploit flaws in the markets thinking. I've been doing it quite a few years and it works for me