Every investor's dream is to encounter a chart that is constantly rising on a straight line. But financial markets are not that simple. This fluctuating course is a part of the exciting story hidden in every investment.
People, by nature, tend to protect their lives and property. This reflex is also evident in financial markets. Fluctuations in the price of an investment instrument are a reflection of the psychology of investors. People act reflexively in a given situation, which causes waves to occur in the markets.
No matter what, capital owners follow certain patterns. They use distinct strategies in market entry and exit. Py (market makers) try to control market dynamics by taking advantage of the masses' tendency to act together.
Technical analysis tools such as RSI, MACD, Bollinger Bands provide investors with information about the market. However, it is important to remember that these alone are not enough to trade. These indicators should be used as a guide to make the right decisions at the right time.
The rhythm between tops and bottoms on charts reflects investors' emotional cycles. While enthusiasm prevails at the tops, concerns and reservations come to the fore at the bottom points. Understanding this rhythm can help better predict future movements of markets.
Investors often begin the process of selling assets at the peak. This point is a big psychological test and many investors can make mistakes at this stage. From this point on, the birth of a new wave begins and fluctuations dominate the financial ocean once again.
On this journey, what every investor must remember is that financial markets are unpredictable and complex. Success comes with knowledge, strategy, patience and psychological resilience.
Understanding the psychological conditions behind certain points, indicators and formations on price charts provides an advantage to investors. For example, the "0 point" of the price is often dominated by doubt and negative psychology, but this point can also herald reversals.
At the 0 point of the wave, measurable indicator data stand out alongside a terrible psychology.
At point 0 of the wave, no one believes in the rise. Those who say it will rise are made fun of.
In general, RSI creates positive divergence.
mcd has fallen well below 0 and created a positive discord.
At the top of number 1, there is no significant upward deviation from the Bollinger upper band. However, at number 2, it generally rises by touching the lower band. Think about it, the indicators become positive at point A and produce a buy signal. Transactions cannot be made by looking at the indicator, but it can be used for confirmation.
At the bottom of Number 2, a sharp rise begins as the candles move up and down. Number 3 starts with a lot of momentum anyway, when the belief in the decline weakens, buyers increase and a serious momentum is seen.
The festival begins when hill number 1 is passed.
At the top of number 3, RSI usually reaches its highest level around 90.
There is a serious upward deviation from the Bollinger upper band.
It usually ends with a hard legged candle with an upward shadow.
The rise ends with a major violation/excess.
There are many buyers at number 4.
Py floods these buyers with goods.
At number 4, buyers do not believe in the decline, which generally results in a horizontal process.
Then number 5 begins.
Number 5 is death rise.
Since the only purpose is to sell goods from above, there is a serious horizontality at the top and the process of selling goods takes time.
Terrible psychology.
The price starts to rise from this level. This region is the 0 point of the wave.
