1. Overreliance on Basic Support/Resistance
Issue: The analysis uses a simple support/resistance concept without clear validation (e.g., no multiple touches or volume confirmation).
Disruption: Support could easily break if there's insufficient volume or strong bearish sentiment, invalidating the buy signal.
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2. Lack of Confirmation Indicators
Issue: There's no use of confirmation tools like RSI, MACD, or moving averages.
Disruption: Entering a "Buy" based purely on support without a reversal signal (like bullish divergence or candle patterns) increases risk.
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3. Premature Target Setting
Issue: The target is drawn quickly after a minor dip, with no fib levels, pivot points, or historical resistance considered.
Disruption: The price might face resistance before reaching the “Target,” especially around previous highs or psychological levels.
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4. Ignoring Downside Risk
Issue: The scenario assumes price will bounce back but doesn’t show a stop-loss or contingency for a breakdown.
Disruption: If price breaks the "Support" zone, it could trigger a stronger bearish move—this risk is not accounted for.
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5. Misleading Arrows
Issue: Arrows (red, yellow, blue) seem speculative and oversimplified.
Disruption: They imply a clear path, which can mislead traders into thinking price action follows linear logic—real markets are more chaotic.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.