After we understood the candles and patterns of reversal and continuation ๐ฏ๏ธ๐
It's time to understand peaks and troughs in a very practical way! ๐ก
โ Peaks and troughs are not difficult terms, but they are the basis for reading the market:
Peak = The highest price the market has reached ๐
Trough = The lowest price the market has reached ๐
1๏ธโฃ Why are peaks and troughs important?
It helps you know the general direction of the price ๐งญ
It clarifies natural support and resistance areas โก (without complicated terms: trough = support, peak = resistance)
It makes understanding candles and reversal and continuation patterns easier ๐ฏ๏ธ๐
๐ Practical example:
Hammer candle at a trough โ price uptrend probability ๐
Shooting star candle at a peak โ price downtrend probability โ
2๏ธโฃ Types of peaks and troughs
๐น Double Top
Shape: the market hit the same peak twice and couldn't rise further
Meaning: price downtrend probability ๐
๐น Double Bottom
Shape: the market hit the same trough twice and couldn't drop further
Meaning: price uptrend probability ๐
๐น Consecutive peaks and troughs
The market is making a new peak + new trough
Meaning: the trend is clear, the price will likely continue in the same direction โก๏ธ
4๏ธโฃ Linking peaks/troughs with candles
Hammer candle at a double trough โ strong signal for price uptrend ๐ช
Shooting star candle at a double top โ strong signal for price drop โ
Engulfing candles at peaks/troughs โ confirmation of reversal
โ ๏ธ Most important rule
โ If the peak or trough isn't accurate or correct on the candlestick โ patterns might fail
๐ You need to see the complete sequence: peak/trough + pattern + candle
๐น Summary
Peaks and troughs = market map ๐บ๏ธ
Drawing it practically will give you more accurate predictions
Combining it with candlesticks and reversal and continuation patterns gives you greater strength in decision-making ๐ช
A beginner applying these basics will be able to understand the market, not just memorize shapes
#ุฏุนู _ุงูู ุญุชูู_ุงูุนุฑุจู
