How to trade a breakout from support line. It's important to always have a target setup before you take any trades. In this case we had the support line further below.
Price Action is important, it can tell you about future price levels that price could react to in one way or another. There are two major details to
keep in mind when drawing support or resistance lines using price action analysis:
1. Pay attention to the number of touches, the more touches the stronger the line (the price level)
2. Pay attention to the volume, the bigger the volume is the more buyers/sellers are in that area which is also another indicator for a strong support or resistance line.
You can draw horizontal support/resistance lines using price action on all timeframes but the higher timeframes are obviously stronger. Why? Same reasons as already mentioned above, because on the higher timeframes the volume a candle represents is much bigger for example comparing a daily candlestick to a M15 candlestick. You can also see more previous history on a higher timeframe in one frame than you can on a lower timeframe. Therefore, price action analysis on higher timeframes provide stronger support and resistance lines.
The Keltner Channels tool looks pretty much like a Bollinger Band. It contains the price, like a channel does and hence the name Keltner Channels indicator. There are three bands, middle, upper and lower. We should keep our focus on the upper and lower one. For best results, always trade with the trend direction. For example, if the prices are moving up and are contained within the Keltner Channels bands, wait for a higher low, prefferably at a support line and make sure it reaches the lower Keltner band. That's a good entry! For put options, you can use lower highs that retrace back to the upper band where there is a resistance line as demonstrated in the video above.
Have you tried multiple strategies without success? Then you might have a problem. For example, you are using too many indicators, you don't understand how the indicators work at all or you can't read the charts properly. You might also be too focused on only one timeframe. Check out how you can fix your strategy buy applying the above. For example, reducing the number of indicators will definitely improve your strategy! Why use three oscillators when you can use only one? Also, if you can't see what's going on one timeframe then you might want to check other timeframes to get the bigger picture.
In this video you can watch a simple Ichimoku Senkou Span retracement on the M1 which was a good position for a short put Option and you can watch a breakout off of a support on that same M1 where the red Tenkan-Sen crossed the blue Kijun-Sen. Ichimoku requires some understanding of price action but will also teach you about trendlines and support and resistance. Ichimoku clouds (Senkou span along with the other lines) can be used as potential targets. Just like a magnet, price tends to reach the Ichimoku lines.
Basic technical analysis involve being able to analyze candlestick charts or if you prefer (bar/line charts). The most basic tools used are support and resistance lines, trendlines and the overall price action itself. You can of course use indicators but you must know how they work and be familiar with them and use them as confirmations only. There is more to charting and to be considered a skilled technical analyst you must learn to identify trends, patterns, volume, targets, support, resistance, higher lows and lower highs just to name a few of the subjects.