OVERVIEW
In general i will be describing about price movement and how we can follow and predict its movement. I can bet you will not find such deep analysis in any website or forum. People rarely share these secrets.These analysis and rules apply on every assert with every time frame.
These rules are not emotion or news based, its just pure price so you can create indicators or EA with these rules. Even i have my own indicators based on these rules. I used EA BUILDER to create them.
RULES:-
1. The first rule you you must remember is that every price movement has a reason behind it. There is no coincidence. Some movement you can predict and understand while others are difficult to predict.
2. Second rule is price moves due to human emotions which try to move it up and down at the same time, thus it will always try to stay near its average movement.
When i say average, i mean it. Try to plot any moving average over your chart. You will definitely find price around your moving average. Depending on your moving average period price may be away or near it, but it will be definitely around your moving average trying to maintain equilibrium.
3. As price movement occur around moving average, different period moving average gives us different clue. As human we cannot analyse every period, or else we would be 100% correct every time, but i will give you four distinct moving averages to make your analysis simple.
4. When a price is near a moving average, it will try to move away from it and when price is far away from a moving average, it will tend to move near it.
5. When price is moving away from moving averages it is healthy and when it is moving towards it that time it is unhealthy.
6. When two moving average are separated by average candle size distance or more then we can say the trend is healthy. I personally prefer 20 and 50 period EMA, to see if my trend is healthy.
7. All EMAs act as support or resistance when price is near them. I use 10 period EMA for recent analysis. So when a candle open and close is below 10 EMA and price is holding below it, price has higher probability of moving down and same is true for the opposite.
8. The best place to enter into a trade is when price is in between 5 and 10 EMA.
9. When one candle close completely exceed its previous candle high or low, then price has high probability of moving in the direction of close.
10. Candles will frequently try to touch 10EMA so iif price moved away from 10 EMA in higher time frame then in lower time frame you will definitely notice pullback candles .
Use these knowledge wisely and trade profitably.