Line Colors
Last updated
Last updated
When using Whale Trade Finder, it's important to pay attention to the colors of the lines displayed on the chart. Blue lines are more likely to act as support levels, while pink lines are more likely to act as resistance levels.
However, it's important to consider the context of the line's location on the chart. For example, a blue line in a buying zone is more likely to provide reliable support, as it indicates an area controlled by buyers.
On the other hand, a blue line in a selling zone may not be as reliable. Similarly, a pink line in a selling zone is more likely to provide resistance, as it indicates an area controlled by sellers.
Conversely, a pink line in a buying zone may not be as reliable, as it indicates an area controlled by buyers. Overall, understanding the context of the lines on the chart and the buying/selling zones can help traders make more informed decisions when trading with this indicator:
The picture shows a buying zone that has been confirmed by the blue color fill, indicating that buyers have taken control and the area is now acting as support. However, within this buying zone, there is a pink line that has previously acted as resistance, indicating that there may be some selling present at that level.
While it is possible to enter short positions at pink lines that are acting as resistance levels, it is important to consider the context of the line's location on the chart before entering a trade. Selling zones, where sellers have control, are more reliable entry points for short positions.
For example, a pink line in a buying zone may indicate some selling pressure, but since buyers have taken control in that zone, traders should be cautious opening short positions in this situation.
In the examples shown, price retested the pink/resistance line and rejected off it briefly before ultimately breaking out through the resistance level and continuing to rise. The reliability of the selling pressure decreases with every retest, since as long as buyers control that area, they can gradually chip away at the available supply/resistance:
The picture shows a selling zone that has been confirmed by the pink color fill, indicating that sellers have taken control and the area is now acting as resistance. However, within this selling zone, there is a blue line that has previously acted as support, indicating that there may be some buying present at that level.
While it is possible to enter long positions at blue lines that are acting as support levels, it is important to consider the context of the line's location on the chart before entering a trade. Buying zones, where buyers have control, are more reliable entry points for long positions.
For example, a blue line in a selling zone may indicate some buying pressure, but since sellers have taken control in that zone, traders should be cautious opening long positions in this situation. The reliability of the buying pressure decreases with every retest, since as long as sellers control that area, they can gradually chip away at the available demand/support.
In the example shown below, price retested the blue/support line and bounced off it briefly before ultimately breaking down through the support level. So while the blue/support line did act as it should by providing a temporary bounce, a long position opened based on that support level would have been risky as the sellers ultimately prevailed, pushing price lower:
These examples show why it's important to use caution and discretion when trading within buying/selling zones and to look for additional confirmation before entering a trade. Traders should exercise discretion when trading against a zone's expected behavior.
Less stressful, more reliable conditions exist, such as:
