Until the sell signal becomes the buy signal. <前編> Watching the signal "after"
ULTRA THEORY ／ Observer GPT
Until the sell signal turns into a buy signal. — 3 parts in total, Part 1
The chart has signals.
A selling pattern appeared.
A buying pattern appeared.
The短-term trend shifted.
The swing low was breached.
Price exceeded the retracement high.
For someone just starting to learn trading, what becomes important first is to be able to identify these kinds of signals.
If a sell signal appears, sell.
If a buy signal appears, buy.
That is not incorrect.
In fact, Inoguchi does so as well.
So, what do experienced traders start to look for beyond that?
While observing Inoguchi’s trades this time, one very interesting phenomenon was verbalized.
It was,
In the early phase of the market, use signals.
In the late phase of the market, watch whether the signals work.
This was the gist.
Sell signals: sell normally
First, one must not misunderstand this.
Inoguchi is not trading with the idea of “when a sell signal appears, purposefully target a buy.”
The decline has just begun,
there is still price movement left.
There is room to drop on higher timeframes as well.
Even in the short term, selling pressure is dominant.
In such a situation,
when a sell signal appears, sell normally.
The market says,
“There’s more to sell.”
and you follow the trend.
However, as the decline progresses,
on higher timeframes a sense of achievement emerges from one wave.
It seems the price has already consumed enough movement.
The price begins to break below a rising medium-term moving average.
Seeing this, Inoguchi thinks,
“This could be a pattern of a failed break lower.”
So, still not buying.
The market still looks downward.
However,
“From here, the further selling is probably enough for now.”
This marks a boundary region.
This becomes one boundary line.
It is not that she abandoned a sell bias
This is also important.
Just because she decided, “I won’t sell anymore,”
does not mean Inoguchi decided, “This will go up from here.”
She did not abandon a selling bias.
However,
From this point onward, even if selling goes in the right direction, she will not participate in that sell.
That is the decision.
There lies a big difference.
Up to then, sell signals were
information for entering
But the moment she stopped participating in selling,
the same sell signals could be viewed as
observables
instead.
“A sell signal appeared.”
Then, what happens next?
If that sell signal is genuine,
how far can the price drop?
how far would it normally go?
Inoguchi looks at that.
Then, if in a scene where it should be able to sell, the selling method cannot push the price down. How does Inoguchi interpret that “failure” and view it as evidence for the buyers? In the continuation, we follow the moment when the meaning of signals changes. Please click Read More to continue.