Basic trading framework for beginners (6)

1. How to determine the profit stop?

Figure 1⃣️First, let’s look at the enlarged version of this chart:

It can be found from the picture that the take-profit area is actually the upper and lower boundaries of the previous box oscillation.

why? Because I personally think that the price trend is like "putting boxes and stacking boxes". When your price drops, the take-profit area will naturally be based on the previous box as a reference. Equivalent to the conversion between resistance and support.

One thing to note is that when the price drops, the original box can be used as a reference for taking profit, but it does not mean that you will open a long position when you reach this take-profit area. This is a wrong idea.

Summary: During the rise, find the upper resistance area as a take-profit area. During the decline, find the support area below as a take-profit area. It's a take profit, not a reversal.

Personally, I suggest you start reducing your positions and taking profits based on two logics:

🔸Disk composition: The upper boundary of the box-shaped oscillation is blocked (key areas are blocked) 📉

🔹The candle chart is suspected of divergence from the top 📉

Taking Figure 2⃣️ENS as an example, the support below is at the 21 price area.

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