Support Resistance Trading In ThinkOrSwim With Polynomial Indicator
Support and resistance indicator
Are you looking for a new indicator? Polynomial regression channel is a machine learning algorithm that prints on your charts the most important level of support and resistance with very low error. Just ONE BUY SIGNAL. Not multiple choices like the Fibonacci: 38-line, 50-line, or 61-line. The Polynomial regression channel is the most accurate indicator in existence today.
You can use this indicator to predict price movement outcome, which will allow you to make better trades and increase the amount of money in your account! With just one click, you can add this amazing indicator onto any asset class! It’s never been easier to get started making money from the markets than now.
What is a channel?
A channel is a set of prices that the market revisits over and over. You may actually draw a line on your graph from the highest high to the lowest low, and know exactly where this price level will be in the future! Because it has already been tested so many times, you may short sell with complete confidence in a support level.
Polynomial regression channel
A Polynomial regression channel indicator is a technical trading tool used to identify support and resistance levels. The Polynomial regression channel is created by drawing two lines, a support line and a resistance line, between two points that represent the highest and lowest points of a given direction.
Finding a stock’s direction
You’re having trouble reading the candlestick charts? Higher highs, high lows or lower highs and lower lows determining the direction. It can be a little confusing to read at first, but the Polynomial regression channel can be used to read bullish and bearish trends. Making it easy to read a bull trend identified by making higher highs (HH) and higher lows (HL), while a bear trend is identified by making lower highs (LH) and lower lows (LL). All within the Polynomial regression indicator.
3 Different trends
The Polynomial function will automatically print on the chart showing you support and resistance levels of the trend, based on the slope direction will confirm if price is moving up or down. If it is rising then that means the demand for this stock is good so the trend is going up.
If the Polynomial regression channel slope is down, then it means people “right now” don’t like the stock and are selling it.
The slope can also be no slope at all which forms a horizontal channel where price moves back and forth range bound. Some traders like this image because it formed a pattern that is easy to spot support and resistance.
If it happened once, it will happen again. Price will tend to move away from resistance line over and over again. We refer to this as being a strong resistance or support. If a trader sees this image, they know the likelihood it will occur again is a high probability. Some traders focus heavily on these lines like a scope on a rifle to enter and exit.
The Polynomial channel can also be used to find entry and exit points for trades. When the price reaches the support line, it is considered to be oversold and a buy signal is generated. When the price reaches the resistance line, it is considered to be overbought.
Advanced trend channel understanding
To predict future price movement, we need to know where are the Polynomial channel’s support and resistance lines. The Polynomial channel structure consists of two straight lines that represent a Polynomial function.
When the Polynomial goes from sideways channel to a U shaped that is saying the stock was coming down but now it has found support and the buyers are buying again. This is the start of a trend reversal. When you see this image realize you are early on and the momentum is not as strong. As a trader legs into the positions the length of time is favorable with this pattern.
In a U shaped, you would understand this is the beginning of a longer upside move. Perfect for stock with time on your side. The upside direction channel can last months or years. When the Polynomial starts to go sideways that is a warning not necessarily a sign to sell your long-term stock position now.
You would wait until the Polynomial makes an upside-down U or a frown face. Frown face for act now or be sad. The U shape Polynomial buy now and you will be happy.
How important is trend in trading?
When you’re investing you don’t expect your investment to go up in a straight line. It goes up and down, sometimes for no apparent reason. Some traders say the trend is your friend, so it must be important when trading. In fact, it’s the number one thing I look at before investing.
Polynomial regression channel shows if the market is going up trend or down with a clear channel slope. No more drawing trend lines on the charts. The market is constantly bouncing between resistance and support sometimes for a long length of time.
Structure and technical analysis
If you use technical analysis to study the markets, you see that they’re finding support and resistance levels. But maybe you made a horizontal line and the stock price broke lower to a diagonal trend line and there it bounced off support.
You understand that the market tends to bounce back when it touches a support level, and that it often pushes forward when it hits a resistance level. This gives you the ability to locate the most likely areas where the market will turn.
Technical analysis indicators
You’ve probably first heard about channels after learning about moving averages price bounce off support then when price is under the moving averages it is resistance. From there upgraded to channels, maybe the very common Bollinger bands which is an offset of the moving average making momentum channels but lacking in identifying trend.
Math in trading
A Polynomial channel indicator is a graphical representation of a Polynomial equation fitted to a set of data points. In traditional technical analysis, we use things like the Linear Regression Line standard deviation mathematical equations to determine price barriers.
Standard Deviation Regression Indicator is a lagging indicator compared to the Polynomial regression formula collects the past price action. To foresee the future possibilities of value from all the data creating a curved channel.
The advantage of a leading indicator
It may seem like a simple feature but this is what makes the Polynomial regression channel a leading indicator. Using data from past market movements, we’ve developed a system that uses price point to be achieved in the Polynomial regression channel trading instruments as support and resistance levels.
These price points are used as reference points when trading the Polynomial regression channel. Trading instrument technical details of price point achieved create support levels and resistance levels given point.
Polynomial regression indicator is a form of technical analysis that uses numeric formulas and indicators to predict market movements. The indicator lines, also known as regression lines, are clear images on price charts that use the past performance of a security to predict future moves. These lines are used to determine the location of a stock’s current support or resistance level.
Coded for accuracy
The parameters of your code produce clear formed channels on any security. This allows you to see exactly where your risk is at all times.
You can now build your trades in a way that maximizes your profit while minimizing your losses. This allows you to find the exact entry and exit points that you want, which makes the markets very predictable and profitable!
The most important part of the analysis is identifying where the key levels of resistance and support are. On any chart, these are the places where the price data points form the resistance lines and support lines.
Visually spotting the reversal
The Polynomial regression channel is a great way to utilize both traditional technical analysis and pivot point analysis. You can identify the pivot points that have been computed and then input those values into a Polynomial regression channel. This will give you the probabilities of where the market will turn based on the price action.
You have learned all the technical analysis needed to know where the markets are likely to head next. Take all forms of learning, and combine them into a single cohesive trading approach that offers signals based on the reversal parameter.
When supply really has buyers to ensure your trade is profitable, you have developed a stock trading technique called Polynomial regression channel indicator trading system without even realizing it.
Adjust for old outdated to the new
You’re tired of using the same old indicators to predict stock prices. You’ve tried using other technical analysis tools, but they never worked for you! Imagine having a tool that can create buying opportunities on all securities and any timeframe.
This tool is based on Polynomial regression channel which is an advanced mathematical technique used by professional traders to find patterns in data sets. The pattern has been proven effective at identifying buy signals.
Polynomial function user data set effectively creates buying opportunities on all securities, including stocks, ETFs, commodities and currencies. Its easy-to-use interface allows anyone with basic computer skills to use it.
Follow the rules
Have you ever noticed when you switch chart time frames, the picture does not match up with the higher time frame? With the Polynomial it’s easy. If the highest timeframe is at support, then the lower time frames have to match to enter a long position. But only if it is at support. It is symmetry trading that makes it easy to trade.
Some strategies have too many rules. Yes, rules are important but if they are too confusing then are they really helping? Trading is not hard, following unnecessary rules is hard.
What are the different types of stock trading channels?
1. Up diagonal moving higher making an uptrend
Up trending price action will have a support level where price pulls back to before buyers enter a long position in hopes the trade continues higher. This strategy is very consistent in short term trade setups.
The length of time will vary, in this strategy give yourself extra time when using options. It will also have a resistance level where price will run up and then stop going higher. Price drops as price consolidates lower into support.
1. Down diagonal price drops lower
Then the up-trending channel comes into a bigger resistance and price action starts to consolidate sideways. At the highs you will have the resistance level horizontal and the support levels will also be horizontal. Like the floor and ceiling in a house. This is where the moving averages falls apart, it whipsaws building up losses without a clear direction of trend.
1. Sideways horizontal having range of support and resistance
The last is down trending where price hits the resistance levels and price drops lower. When it finds itself at support level and rises in price making a counter trend trade for some investors. But Not Me! There are too many trends continuation trades to bother with a small reward with a risk. I like small risk big reward trades! Each trend has a support level and a resistance level.
Learn more about bullish and bearish markets here!
How do you choose a channel for your needs?
The Polynomial function is to simplify this process of support levels and resistance levels down to buy on the green sell on the red. When the Polynomial regression channel is rising from the bottom left of your screen to the top right. Meaning trend continuation higher.
If the Polynomial has a bow in it then price is going sideways. The sideway trend will not continue forever. When it breaks the resistance level, the point will start to change, curving the Polynomial more as more data points come in the future.
Follow the trends
Then the Polynomial regression channel is going down from the top left of your computer to the bottom right. If it is down trending, only take trades lower.
The Polynomial regression channel has band that can have the width altered from the default to alert you to place the ticker into your watch list of future pivot points. The signal line can be smooth or independent variable to your trading strategy.
I like to stretch the Polynomial function out, putting a higher demand on the stock to be ready for reverse at the pivot points zone. The video course shows you how to shape the Polynomial regression indicator to match your strategy giving the best statistics of results. Identifying the chart function between price and data lines.
Middle band bonus
Another bonus to the Polynomial regression channel is the middle band like the moving average but better. Giving great targets for quick profits. Before letting your runners run if that is a trading strategy you like. Then the Polynomial regression indicator is a must have trading tool for you.
I do not typically trade the mid band on the chart as an enter just an exit. Because of the probabilities is a 50/50% chance of which direction the price will go. But a great place to take some money off the table for investors shorting from resistance or trade from support it is a place to scale out. As pivot points go think of it as a mini stopping point. Pause, that refreshes.
Why should you use a stock trading channel?
Most fundamental analysis investors do the research needed to confirm good quality stocks but it does not mean the stock is at the best price to buy. With technical indicators on a particular security can be easier to predict where the price is headed in the short term.
A Polynomial function is a technical analysts dream! It allows you to look at the market psychology in terms of trend direction and momentum. This gives you the peace of mind of knowing where the market is at, instead of the uncertainty of figuring out how to structure your trades in a way that will protect you from losing money.
The benefits of using a stock trading channel
Believe it or not you know more than you think you know. But a lot of times we let the indicators generally lead our trading. Your ideas and methods need a conclusion of success. Your price charts should specifically match the trader points of trade over the indicator.
To be able to display your method of trading setting to signal the method you want to trade from the data of the charts is the goal. If you were writing your own settings to represent your method of ideas for entering a position would those ideas match the Polynomial regression indicator? From the chart to the trades does it form the signals that would have a positive effect on your portfolio?
Match the indicator to your strategy
Some traders don’t realize it’s not only about the chart, prices, signals, bands, or trade duration that prevent us from making money. It is our final confirmation of data, values, methods, and calculating it all together for a winning trading strategy that keeps us from making money. For me and many other traders the Polynomial regression channels are where it all comes together creating a simple but effective trading strategy.
Traders not taught the function of the methods they trade from are calculating a method of positive trading values or negative value. Without understanding this will be the difference in winning and losing over and over.
First the Polynomial regression indicator can keep you on the right side of trend which is the main value of price going up or down. But let’s reverse the idea, what if you always sell against the trend at the support of the Polynomial regression indicator and the effect will be negative to sell at support. Use the true nature of trend and the indicators that match your trading strategy for the best results.
Shorting with the Polynomial regression indicator
Polynomial regression indicator is my favorite tool for trading. It has disciplined me to be patient and correctly enter trade both long and short. The regression indicator shows when price value is overbought. Most traders use this for target level but it can be used for a trend reversal line.
The bands need to have a bowed image. The upside-down U which means price is slow compared to normal. I don’t assume it will reverse the trend with one touch of the upper band. So another setting I like is for price to fall to the middle band or lower before retesting resistance band again. Giving me a two touch, or in other words a double top reversal pattern. This signals a break in the trend pattern. With a broken trend the momentum has shifted.
Remember trend makes higher highs so equal high is not the typical pattern. This is a reasonable ask of the stock price before sellers are expected to come in. I also like to test the idea with a small portion of money, not trying to attempt making a million dollars on one trade. Even though the Polynomial display is a good trade set up. There is no guarantee, a trader needs to have limited risk on each trade. At least that’s what I suggest.
When selling short the volume can be larger than the volume in long positions but when calculating options always go the extra month. Just another thing I had to correct in my trading when writing list of rules. Selling short can have some really big rewards if you have never done it before as a trading strategy.
What online broker do I needed to get started?
You can open an account with TD AMERITRADE OR the Polynomial channel indicator can be added to your thinkorswim.com FREE demo charting platform. It is a great tool for helping to identify key support and resistance levels.
If you are interested in learning more about technical analysis, or if you would like to try using the Polynomial channel indicator in your own trading, WITHOUT changing brokerages, download in minutes here for a free charting application:
In conclusion
Hopefully this blog has stirred you up to see the opportunity in trading in a new light. Most investors don’t understand market structure and they’re missing out on a lot. If you want to profit from stock prices buying the Polynomial dip or selling the Polynomial resistance band lower, then this indicator and course will show you exactly what to look for in the charts.
The self-directed online course teaches traders how to read market structure using Polynomial channel levels. By following these simple techniques, any trader can learn how to trade stocks with confidence! Don’t forget our extended education watch list comes out monthly for Real-time trade set ups, cancel anytime. FOR BETTER TRADES CLICK NOW!
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