Mapping Sudden Market Moves With Charts, Tools

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Simpler Trading Team

Aug 16th 2021  .  3 min read

Mapping Sudden Market Moves With Charts, Tools

2021-08-16

There is so much movement in this market that traders constantly struggle with Fear of Missing Out (FOMO) and whether the next opening bell signals GTFO – Get The Funds Out.

This is a time when many traders are choosing to “stay in cash” to avoid the heavy volatility. Sitting safe with a certain account balance is a viable strategy.

So how can traders fill any extra time when not staring at the digital ticker tape?

One option is to pursue some basic charting either as a new tool or a refresher for seasoned traders.

Chart patterns are an important element of Simpler’s traders to identify whether a trend is likely to continue or a reversal is about to happen.

When you combine specialized indicators with chart patterns there is more opportunity for catching trends.

Charts are powerful because they “map” human emotions – fear, greed, worry, hope, joy – that move stock market prices. Emotions fuel market movement. And, like history, the market repeats itself in cycles just like humans.

These “emotional maps” lead the markets down a path – either a continuation of the current trend, or an end to the current trend which then switches into a reversal.

Chart patterns don’t form all the time, but when they do they can be powerful at determining market movement.

Traders often hear quick references to many patterns, and the volume of references can get confusing quickly.

Here’s a few you’ll hear about:

  • Triangles
  • Wedges
  • Head and Shoulders
  • Cup and Handle
  • Pennants

Chart patterns can provide clarity when searching for both short- and long-term forecasts when you develop an understanding of what to follow.

Combining indicators with the insight of chart maps increases the potential for trades.

This all follows the Simpler Trading method of finding and using the right tools for the best trading opportunities. Chart patterns that reveal these “maps” can be a powerful and consistent source of trade setups – and they can form an important base in every trader’s plan.

We Saw: World-shaking events unfolding to start week –

  • Mixed results across the major indexes
  • Feds opening up about changes next year
  • Inflation appears to be here for awhile

We’re Watching: Despite events, market determined to move higher –

  • Will wild run up head off a cliff?
  • Technology sector gaining footing in volatility
  • Setups in: AAPL, AMZN, TSLA, AMAT