The most valuable wealth of a trader is his knowledge.
Knowledge is power & in trading or investing, and you need the power of the knowledge to increase your odds of success. And the understanding of the Price & time scale in the markets is one such element of knowledge that is very crucial.
The use of scale in trading is like separating the wheat from the chaff.
Most traders depend on and use the Price action to trade. But most of them don’t know or understand that without the use of the SCALES, they can’t read the correct action of Price. And so, if they can’t read the proper action of Price, then how they could trade profitably? That’s why the knowledge of scales is so crucial.
The Price & time scale separate and tells you the non-trending portion of the Price, which is no use. And when we discard the waste portion of the Price, we get a clear picture of the trends and reversals.
So, let’s look at today’s Nifty Intraday 05-minute chart to understand how the Price & time scale knowledge identifies the reversal in trend.
Nifty today opened gap-down. Then it jumped 243 points, and again it came down by 176 points. So it was a highly volatile day. But as the user of the Price & time scale technique, we waited for the proper opportunity to appear. And finally, the opportunity came.
Around 12:30 pm, Nifty broke the Price & time scale level (Green oval), and that breakout confirmed the intraday reversal. Then soon, the bulls regained control, and the Nifty jumped 140 points.
And here is how I used that buy reversal signal for taking the intraday trade.
So, remember, the knowledge of the Price and time scale is essential because the scale on the charts helps to see the action of Price and time more precisely. And then, it becomes easier to identify the trend reversals.
If you want to know more about the Power of Scale Method, then click here or read the post below to understand more about the method.