Get started

Support and Resistance

OPTION TRADING When you trade options, you're essentially placing a bet on if a stock will decrease, increase or remain the same in value; how much it will deviate from its current price; and in what time those changes will occur. Based on those parameters, you can choose to enter into a contract to buy or sell a company's stock. You don't need a considerable sum of money to become an options trader. You can start small with a capital of less than Rs 2 lakhs too. However, as you start small, you need to be a careful trader so that you can cut down on the possibility of losses and enhance the return potential of your trades.
NSE:NIFTYEducation
by SkyTradingZone
1
How to get profit by option chain in trading For long calls: If the underlying is above the strike price on expiration, the profit is the underlying price on expiry – strike price – premium paid per contract. If the underlying is at or below the strike price on expiration, the option has no value so your loss is the premium paid to buy the call option. Options trading can be one of the most lucrative ways to trade in the financial markets. Traders only have to put up a relatively small amount of money to take advantage of the power of options to magnify their gains, allowing them to multiply their money many times, often in weeks or months.
BSE:SENSEXEducation
by SkyTradingZone
2
What is Option Chain ?Options chain can be defined as the listing of all option contracts. It comes with two different sections: call and put. A call option means a contract that gives you the right but does not give you the obligation to buy an underlying asset at a particular price and within the option's expiration date. How does an option chain work? An option chain displays available call and put options for a specific underlying asset, with their strike prices, premiums, and open interest. It provides a snapshot of market sentiment and potential price movements.
NSE:BANKNIFTYEducation
by SkyTradingZone
2
DATABASE TRADING Trading data providers supply real-time and historical information relating to stocks and securities traded on various global financial exchanges. Opah Labs. Based in USA. Delivering deep proprietary industry data across a broad range of sectors to create cutting-edge insights. Stock exchanges and data vendors are great sources for institutions. Retain traders can use broker APIs as it's more economical. As a trader, you must be quick and analytical, and good-quality data is the way to go
NSE:BANKNIFTYEducation
by SkyTradingZone
PROFESSIONAL TRADAER ( point of view )A professional trader is someone who buys and sells securities frequently for short-term benefits. An investor generally buys and sells securities for long term capital gains and dividends. What is a professional trader? A professional trader is a person who works in finance and engaged in investing as a business or in a full-time role rather than occasionally or as a hobby. They may work for themselves, at a trading company, at a wealth management firm or as a freelance trader for individual clients. The estimated total pay for a Trader is ₹13,41,500 per year, with an average salary of ₹8,41,500 per year. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users.
NSE:UNITDSPREducation
by SkyTradingZone
Technical analysis MACDMACD is a momentum indicator, which follows trends and belongs to the oscillator family of technical indicators. It permits you to: According to the relationship between two moving averages, determine the current trend direction (bullish or bearish) and forecast where the price is more likely to go. The 12 represents a moving average of the previous 12 bars. The 26 represents a moving average of the previous 26 bars. The 9 represents a moving average of the difference between the two moving averages above.
NSE:NIFTYEducation
by SkyTradingZone
1
Divergence in Trading What is Divergence? Divergence is when the asset price moves in the direction opposite to what a technical indicator indicates. When a stock is diverging, it signals weaker price trends and the beginning of a reversal Seeing divergence increases profitability by alerting a trader to protect profits. Technical traders generally use divergence when the price moves in the opposite direction of a technical indicator. Strong divergence is the most reliable type of divergence, often signaling a significant reversal. It occurs when the price makes a new high or low, but the indicator fails to do so, indicating weakening momentum.
NSE:NIFTYEducation
by SkyTradingZone
Lecture for option trader Derivatives - Options & Futures: Interactive Brokers. Practical Guide to Trading: Interactive Brokers. Trading Strategies in Emerging Markets: Indian School of Business. Financial Engineering and Risk Management: Columbia University. If you think the stock price will move up: buy a call option, sell a put option. If you think the stock price will stay stable: sell a call option or sell a put option. If you think the stock price will go down: buy a put option, sell a call option.
NSE:BANKNIFTYEducation
by SkyTradingZone
Database information for traderCandlestick charts are perhaps the most widely used among active traders. In some ways, candlestick charts blend the benefits of line and bar charts as they convey both time and impact value. Each candlestick represents a specific timeframe and displays opening, closing, high, and low prices. Price Data: Real-time and historical prices of stocks, commodities, and currencies. Volume Data: Details on traded quantities within specific timeframes. Order Book Data: Insights into buy and sell orders at different price levels. Market Timestamps: Precise timing of trades and market events.
NSE:NIFTYEducation
by SkyTradingZone
Option chain and full knowledge about tradingAn option chain lists all option contracts, including put and call option for given security. However, several traders focus on net change,' 'bid,' 'last price,' and 'ask,' columns to assess current market conditions. Option chain is also called the option matrix. Options trading is a type of financial trading that allows investors to buy or sell the right to purchase or sell an underlying asset at a fixed price, at a future date. Options trading operates on the basis that the buyer has the option to exercise the contract but is not under any obligation to do so
NSE:NIFTYEducation
by SkyTradingZone
Technical concepts in trading Technical analysis is a means of examining and predicting price movements in the financial markets, by using historical price charts and market statistics. It is based on the idea that if a trader can identify previous market patterns, they can form a fairly accurate prediction of future price trajectories. The 3 5 7 rule is a risk management strategy in trading that emphasizes limiting risk on each individual trade to 3% of the trading capital, keeping overall exposure to 5% across all trades, and ensuring that winning trades yield at least 7% more profit than losing trades
NSE:BANKNIFTYEducation
by SkyTradingZone
Few Important Information about tranding Few Important Information about tranding Trading refers to the process of buying and selling financial assets, including stocks, bonds, currencies, and commodities. Trading is done with the explicit goal of making profits from price changes in the short term. Trading involves the buying and selling of financial assets, such as stocks, to earn profits based on the price fluctuations of these assets. There are different types of trading, and traders use various strategies, techniques, and tools to decide when to buy or sell different assets
NSE:IGLEducation
by SkyTradingZone
PCR Trading Option A Advance Guide However, no PCR can be considered ideal, but usually, a PCR below 0.7 is typically viewed as a strong bullish sentiment while a PCR more than 1 is usually considered as a strong bearish sentiment. One way to calculate PCR is by dividing the number of open interest in a Put contract by the number of open interest in Call option at the same strike price and expiry date on any given day. It can also be calculated by dividing put trading volume by call trading volume on a given day.
NSE:BANKNIFTY1!Education
by SkyTradingZone
3
ADX Trading The average directional index (ADX) is a technical indicator used by traders to determine the strength of a financial security's price trend. It helps them reduce risk and increase profit potential by trading in the direction of a strong trend. Many traders consider the ADX to be the ultimate trend gauge because it is so reliable. ADX quantifies trend strength by measuring the degree of directional movement in price. ADX calculations are based on a moving average of price range expansion or contraction over a given period. The default setting is 14 periods, although other settings can be used. ADX can be used with any financial security, including stocks, exchange-traded funds, and futures. The average directional index, known as ADX, is a technical tool used by traders to gauge trend strength. Trading with the trend is considered a fundamental trading practice that reduces risk and increases profit potential. ADX calculations use a moving average of price range expansion or contraction. ADX is less useful when prices enter a trading range. While ADX is a lagging indicator, it is considered reliable.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
Strength Index (RSI) IndicatorThe relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to detect overbought or oversold conditions in the price of that security. The RSI is helpful for market participants in identifying trends. In a strong uptrend, the RSI typically stays between 40 and 90, with the 40-50 range acting as support. In a strong downtrend, the RSI ranges from 10 to 60, with the 50-60 range serving as resistance.
BSE:SENSEXEducation
by SkyTradingZone
3
professional trading mindsetThey are disciplined in their trading and can view the market objectively, regardless of how current market action is affecting their account balance. They don't give in to being excessively excited about winning trades or excessively despairing about losing trades. Stick to Your Discipline. ... Lose the Crowd. ... Engage Your Trading Plan. ... Don't Cut Corners. ... Avoid the Obvious. ... Don't Break Your Rules. ... Avoid Market Gurus. ... Use Your Intuition.
NSE:NIFTYEducation
by SkyTradingZone
3
How moving average works on chartsHello mates sharing a view How Moving Averages Work A moving average works by calculating the average price of a security over a specific period of time, and then updating that average as new price data becomes available. The purpose is to help eliminate noise (short-term price fluctuations) to provide a clearer view of the underlying trend. Types of Moving Averages Simple Moving Average (SMA) Definition: The most basic type of moving average. It is calculated by taking the arithmetic mean of a security’s price over a specified number of periods. Formula: SMA=Sum of closing prices over a periodNumber of periods SMA=Number of periodsSum of closing prices over a period​ Example: A 10-period SMA adds up the last 10 closing prices and divides by 10. As each new closing price comes in, the oldest price is dropped, and the new price is added. Use: The SMA smooths out price data and provides a basic view of the average price over the chosen period. Exponential Moving Average (EMA) Definition: A more sophisticated type of moving average that gives more weight to recent prices, making it more responsive to price changes compared to the SMA. Formula: The calculation is more complex than the SMA but it’s designed to give more emphasis on the latest price data. Use: The EMA is often preferred in volatile markets because it reacts more quickly to price movements, providing more timely signals. Weighted Moving Average (WMA) Definition: Similar to the EMA but with a simpler calculation. It assigns a specific weight to each data point, with more weight placed on the more recent prices. Use: Like the EMA, the WMA is more sensitive to recent price changes compared to the SMA. Common Periods for Moving Averages Short-Term (Fast) MAs: 9, 10, 20 periods (e.g., 10-day or 20-day SMA or EMA) Medium-Term MAs: 50 periods (e.g., 50-day SMA or EMA) Long-Term (Slow) MAs: 100, 200 periods (e.g., 200-day SMA or EMA) Key Uses of Moving Averages Trend Identification Uptrend: When the price is above the moving average, it signals an uptrend. Downtrend: When the price is below the moving average, it signals a downtrend. Sideways (Neutral) Trend: When the price moves sideways and stays close to the moving average, this indicates no clear trend. Support and Resistance Levels Moving averages can act as dynamic support and resistance levels. In an uptrend, the price might repeatedly bounce off a moving average, using it as support. In a downtrend, the moving average might act as resistance. For example, in a strong uptrend, the 50-day or 200-day moving average might act as a support level, where price tends to pull back to and then bounce up again. Crossovers (Golden and Death Crosses) Golden Cross: A bullish signal occurs when a short-term moving average (like the 50-day SMA) crosses above a long-term moving average (like the 200-day SMA). This is seen as a confirmation of an uptrend. Death Cross: A bearish signal occurs when a short-term moving average crosses below a long-term moving average. This is seen as a confirmation of a downtrend. Momentum and Buy/Sell Signals When the price crosses above a moving average: This is often considered a bullish signal, suggesting that an upward trend could be starting. When the price crosses below a moving average: This is typically a bearish signal, suggesting a potential downward trend. Smoothing Volatility By averaging out price data over a set period, moving averages help reduce the "noise" of daily price fluctuations and provide a clearer view of the overall trend. How to Use Moving Averages in Charts Plotting Moving Averages: On most charting platforms, you can easily overlay a moving average by selecting the tool from the indicators list and choosing the period (e.g., 50-day or 200-day). Adjust the Time Period: You can experiment with different time periods to adjust the sensitivity of the moving average. Shorter periods (e.g., 10-day) react faster to price changes, while longer periods (e.g., 200-day) provide a smoother, slower-moving trend line. Example of Using Moving Averages Trend Confirmation: If the price is consistently above the 50-day moving average, the market is likely in an uptrend, and you might look for buy opportunities. If the price is consistently below the 50-day moving average, the market is in a downtrend, and you might look for sell opportunities. Golden Cross (Bullish Signal): Suppose the 50-day SMA crosses above the 200-day SMA — this is the "Golden Cross," a classic signal that suggests the start of a strong uptrend. Traders may start looking for long (buy) positions. Death Cross (Bearish Signal): Conversely, if the 50-day SMA crosses below the 200-day SMA, it forms a "Death Cross," signaling a potential downtrend, and traders may look for short (sell) opportunities. Using Moving Averages as Support/Resistance: In an uptrend, the price might pull back toward the 50-day moving average and then bounce back up. This makes the 50-day MA act as a dynamic support level. In a downtrend, the price might approach the 50-day MA and then reverse downward. This makes the 50-day MA act as a resistance level.
NSE:NIFTYEducation
by MISSION_TRADING
How to draw support and resistance level on chart1. Identify the Trend Support: This is the price level where a downtrend can pause or reverse. It occurs when buyers are expected to step in and push the price upward. Resistance: This is the price level where an uptrend can pause or reverse. It occurs when sellers are expected to step in and push the price downward. Key tip: The more times the price touches a particular level and reverses, the stronger the support or resistance. 2. Locate Significant Highs and Lows Support: Look for the lowest points where the price has previously bounced. These are the bottoms where price failed to drop further. Resistance: Look for the highest points where the price has previously been unable to break through. These are the tops where price failed to rise further. Key tip: You want to find significant turning points — areas where price made a sharp reversal. 3. Use Horizontal Lines to Mark Levels Support: Draw a horizontal line along the most recent low or lows where price reversed or consolidated. This will mark the support zone. Resistance: Draw a horizontal line along the most recent high or highs where price reversed or faced rejection. This will mark the resistance zone. Key tip: You can use multiple points to validate a support or resistance level. If a price has touched and reversed at the same level multiple times, it becomes more reliable. 4. Adjust for Areas (Zones, Not Just Exact Price Points) Often, support and resistance are not exact price points but zones where price action tends to cluster. For example, if a stock often bounces between $100 and $105, you might draw a support level around $100-105 rather than at one specific price. Key tip: Consider the range of price movement around these levels. Drawing the lines as zones can provide more flexibility for trading. 5. Look for Volume Confirmation High trading volume near a support or resistance level adds strength to the level. A breakout or breakdown accompanied by high volume suggests that the level is more significant. Key tip: Pay attention to volume spikes when the price approaches key support or resistance levels. This may indicate that a breakout or breakdown is imminent. 6. Dynamic Support and Resistance These levels are not always static. Trends can create dynamic support (in uptrends) or dynamic resistance (in downtrends), where support or resistance is aligned with trendlines or moving averages. Key tip: In trending markets, you can use tools like trendlines or moving averages (like the 50-day or 200-day moving average) to spot dynamic support and resistance. 7. Check for Price Patterns Price patterns such as triangles, channels, or head-and-shoulders can also help you identify key support and resistance zones.
NSE:BANKNIFTYEducation
by MISSION_TRADING
Navigating the Bullish Surge: A Cautious Approach to InvestingThe Indian markets are experiencing an extraordinary rally, with major indices soaring to unprecedented heights. This surge is undoubtedly enticing for retail traders and investors eager to capitalize on the momentum. However, the pressing question remains: Are these elevated levels truly the right time to enter the market? Perhaps not. To gain insight, we can turn to a diagram by Dr. Jean-Paul Rodrigue that illustrates the typical stages of a market bubble. When we overlay this framework onto the current landscape of Indian indices, it becomes apparent that we may be on the brink of significant market movement—potentially in the coming weeks. History has shown us that markets can swing from euphoric bullishness to sharp corrections. Notable examples include the catastrophic crash of 2008 and the rapid declines during the COVID-19 pandemic in 2020. While we may not face declines as drastic as those events, it’s essential for retail traders to be proactive in safeguarding their investments. One effective strategy to mitigate downside risk is to consider purchasing long dated put option. A put option provides the holder with the right to sell the underlying asset without the obligation to do so. This means that if the market experiences a downturn—whether in the immediate future or after a few weeks or months—the put option can yield significant profits during a substantial decline. On the flip side, if the market continues its upward trajectory, the put option will gradually lose value and may eventually become worthless as indices continue to set new records. The key takeaway here is to keep your investment strategy straightforward and avoid unnecessary complexity. This is merely one of many strategies available for investors looking to protect their portfolios. Final Thoughts: As we navigate these exciting yet unpredictable market conditions, it’s crucial to remain vigilant and informed. While the allure of all-time highs is compelling, prudent risk management is essential for long-term success in investing. Disclaimer: All investments carry inherent market risks. This article is not a recommendation; please conduct your own analysis before making any trading or investment decisions.
NSE:NIFTYEducation
by VishalSubandh
Hathway - Inverse/Reverse Head and ShoulderCMP - 23 TGT - 42 ⚡️Disclaimer: Any of my posts should not be considered as a Buy/Sell/Hold recommendation. This analysis is for educational and learning purpose only⚡️ Description: Reverse head and shoulders chart pattern is a bullish chart which signals a potential reversal of a downtrend. It is the opposite of the head and shoulders chart pattern (which is a bearish formation) The reverse head and shoulders chart pattern consists of three (3) troughs (u-like chart formation): 1) The first is identified as Left Shoulder 2) The second and deepest is called Head 3) The Third is called Right Shoulder 4) Neckline is the zone where the price has hit a resistance and corrected multiple times (as seen in the chart) Target Measurement: Draw price range from the lowest point of the Head to the Neckline and place it at the neckline. (the points measured in the depth is target from the neckline)
NSE:HATHWAYEducation
by Imran_I_Ahmed
Alkyl Amines - Descending ChannelA descending channel is a chart pattern which indicates a downward trend in a stock price. Visually, a descending channel angles downward, from a high point to a lower point. It is drawn by connecting the lower highs and lower lows of a security's price with parallel trend lines. This should have at least 2 resistance and 2 support zones to establish a channel-like pattern Usually traders wait for a breakout to signal an entry point, which is when the stock price breaches an established channel's boundaries, either on the upper or lower side. Target - Target could be placed at a recent high, Since this type pf chart pattern may have multiple lower highs. One could look for a lower high with good consolidation. This is where most buyers would be stuck and may want to exit as soon as the stock price reaches that price. For example: Below mentioned is one such price zone. CMP 2124 TGT 3203 (50%) ⚡️Disclaimer: Any of my posts should not be considered as a Buy/Sell/Hold recommendation. This analysis is for educational and learning purpose only⚡️
NSE:ALKYLAMINEEducation
by Imran_I_Ahmed
Bajaj Hindusthan Sugar - Cup and Handle (Weekly Chart)A cup and handle pattern on a stock chart is an pattern which resembles a cup with a handle, where the cup is in the shape of a "u" and the handle has a slight downward drift or consolidation. The cup and handle is considered a bullish signal, with the right-hand side of the pattern typically experiencing lower trading volume. A cup and handle is considered a bullish signal extending an uptrend, and it is used to spot opportunities to go long. Target Measurement - The depth (which is the bottom price of the cup till neckline) is measured and placed on the neckline to get the final target Technical traders using this indicator should place a stop buy at the bottom of the handle on closing basis
NSE:BAJAJHINDEducation
by Imran_I_Ahmed
7