Trading Strategy for Beginners: Regression Trend to Identify Support and Resistance
Hello everyone! Today I want to talk to you about a useful tool for those starting in scalping: the regression trend. This indicator not only shows the direction of the market but also acts as a dynamic marker for supports and resistances.
Basic Concepts
In trading, supports are levels where the price tends to bounce back, as buyers consider it a good time to enter. Resistances, on the other hand, are levels where the price usually stops because sellers take the opportunity to take profits. These points are essential for determining entries and exits in scalping.
What is the Regression Trend?
The regression trend is an indicator that traces a central line (based on statistical calculations) that represents the average price movement over a given period. Additionally, it delineates a channel with upper and lower limits that adjust to market behavior.
Using the Regression Trend in Scalping
In 5-minute charts, this indicator helps make quick decisions:
The edges act as dynamic supports and resistances. When the price touches the lower limit, it is likely to bounce upward, while the upper limit indicates possible downward corrections.
Practical Example
Let's assume that the price is moving in an upward regression channel. If it touches the lower limit and the RSI indicates oversold, it would be a good entry point for a buy, with a target close to the upper limit. If the price reaches the upper limit with strong green candles, you might consider waiting for confirmation for a sell.
Advantages of the Regression Trend
Visual Clarity: Helps quickly identify key areas. Adaptability: Adjusts to market movement, useful in changing conditions. Success!
Hello everyone! Today I want to talk to you about a useful tool for those starting in scalping: the regression trend. This indicator not only shows the direction of the market but also acts as a dynamic marker for supports and resistances.
Basic Concepts
In trading, supports are levels where the price tends to bounce back, as buyers consider it a good time to enter. Resistances, on the other hand, are levels where the price usually stops because sellers take the opportunity to take profits. These points are essential for determining entries and exits in scalping.
What is the Regression Trend?
The regression trend is an indicator that traces a central line (based on statistical calculations) that represents the average price movement over a given period. Additionally, it delineates a channel with upper and lower limits that adjust to market behavior.
Using the Regression Trend in Scalping
In 5-minute charts, this indicator helps make quick decisions:
The edges act as dynamic supports and resistances. When the price touches the lower limit, it is likely to bounce upward, while the upper limit indicates possible downward corrections.
Practical Example
Let's assume that the price is moving in an upward regression channel. If it touches the lower limit and the RSI indicates oversold, it would be a good entry point for a buy, with a target close to the upper limit. If the price reaches the upper limit with strong green candles, you might consider waiting for confirmation for a sell.
Advantages of the Regression Trend
Visual Clarity: Helps quickly identify key areas. Adaptability: Adjusts to market movement, useful in changing conditions. Success!
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content.Ā See T&Cs.
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