Do not enter here! Be careful of counter-trend signs that go against the trend... [Basics of Top and Bottom Chart (7) - of 8]

Long-term trend reversal and short-term pullback identifiable chart

■ Bottom-to-top Chart CheckpointsCheckpoints

First, please look at the following chart.

Points to check: three!

1.　White arrow － presence of reverse-sign signals at upper and lower zones (ceiling zone, bottom zone)Counter-trend signals

（High likelihood of ceiling/bottom zone） ＞＞＞Confirm direction of entry

2.　Check whether the moving average trend is upward or downward

3.Green・Red arrows － pullbacks/signals occurring outside (not in ceiling or bottom zones) in the direction of the trendFollowing-trend signals

（Potential pullback buying on uptrends, selling on downtrends）

＞＞＞Entry points for pullbacks and retracements

When multiple RCI and Stochastics bundles converge at the lower bound and, after crossing, begin to spread upward,and thenthe price moves upward,

in addition, when a candlestick appears above the band of moving averages,buying reversal (bull market).

Conversely, when multiple RCI and Stochastics bundles converge at the upper bound and, after crossing,begin to spread downward,the price moves downward,

in addition, when a candlestick appears below the band of moving averages,selling reversal (bear market)’

is evident at a glance in this chart template.

■ Not only the signals, but knowing the meanings of RCI, Stochastics, and moving averages will greatly improve win rate!

Using RCI and Stochastics across multiple timeframes, you can understand the trend and pullback state.

Indicates overbought and oversold, and you can treat a rebound from ±80% as a timing for counter-trend entry.

A drawback is that when a trend emerges, it tends to hug both directions, making precise timing difficult.

Using 0% as a baseline, you can see whether the direction is up or down.

By multi-timeframe analysis, you can identify pullbacks and retracements within a trend.

Stochastics：

Indicates overbought and oversold, used as a contrarian indicator.

With the chart’s unique multi-timeframe setting for the “Bottom-to-Top Chart,” you can also view a larger timeframe simultaneously to know trend direction.

The white band line is the current timeframe line. If the upper-timeframe line is above the white line, it indicates a downward direction; if the upper-timeframe line is below the white line, it confirms an upward direction.

Moving Averages：

Using 17 moving averages from 8 to 400 days allows capturing trend direction on a larger scale than RCI or Stochastics.

Understanding these three indicators correctly allows you to view the chart more holistically.

■Don’t enter here! Be careful of counter-trend signals!

Just looking at this image, you might think the reversal signal (white signal) isn’t a reversal at all!

However,

when checking entry, the important moving average shows that a strong uptrend is underway,

so you should ignore reversal or contrarian signals in such a case and avoid entering, which greatly increases win rate.

Also refer to higher timeframes; following the direction of higher timeframes is a fundamental trading principle, so simply following signals alone is not enough.

If you analyze the previous chart with a directional filter (discretionary judgment) added, the analysis becomes…

Until the moving average twists (reverses),only pick up pullback signals in the trend direction,,

in other words,

Yellow circle indicates an uptrend in green,signal entry points to extend profits.

■ Remembering various patterns of winning and losing patterns is the key

(Premise)

In a mildly downtrending market

(Checking signals and conditions)

When a reversal (white) signal appears and RCI and Stochastics confirm convergence followed by dispersion,

it is judged as a weaker buy signal, and you enter on the green buy signal.

(Profit target)

However, since the market is in a downtrend, you should take profit when the red (sell) signal appears,

or when the short-term line breaks below the long-term line in RCI.

To be continued in the next [Bottom-to-Top Chart Basics⑧].