Another Day Trading Tip

Love Trading Buy/Sell Arrow Signals? Try This!

One of the odd things I discovered to help reading your charts is if in doubt, invert the chart. This means you have to save the chart to some imaging program (Paint would do) and then flip the image so the image is still travelling left to right but highs have now become lows and lows have become highs.

There are two reasons why this is such a good trading tip. Firstly, during prolonged trends you can often get itchy trigger finger and want to counter trend trade just because the “trend has been going for soooooo long”. We’ve all done it at some point and a lot still do it. Quite often a trader favours taking trades in one direction more than others. I was always good at trading “long” but most newbies like shorting. I think it is partly to do with the recent declines we have experienced since 2000 and also there seems to be some “cudos” is being able to catch down trends.

So if it has been in a downtrend for a long time and you are a “long” trader by nature. By flipping the chart you can ask yourself the opposite question. “Would I short this up trend”. Suddenly the chart takes on a whole different meaning.

So you can use this to test whether you would take a trade in your unfavoured direction. If you would then you should be pretty confident in the trade.

It is also good to flip your chart in order to see if the buyers or sellers have the upper hand. Some times a chart just looks wrong upside down. There is something not quite right about it. This is usually because something is standing out on oneside rather than the other and usually only occurs when bottoms or tops are being formed.

Have a look at the two day trading charts below and see if you can spot which one is the correct way around. It looks pretty obvious in my opinion.

Image 1

Image 2

If you would like to find out which is the orginal chart and check to see if you were right please go to the search box in the header and type in ‘Question Answers’ and you should find the page with the answer on.

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