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From Novice to Pro: Navigating Support & Resistance Like a BossGreetings to all. I trust that you are all thriving in both your personal lives and trading endeavors. Today, I present educational content aimed at understanding the concepts of support and resistance in chart analysis. Support and resistance are key concepts in technical analysis used to identify potential price levels where an asset's price might reverse, stall, or consolidate. They are often visualized on a price chart and are critical for traders making decisions about entry, exit, and stop-loss levels. 1. Support: Definition: Support is a price level at which a downward trend may pause or reverse due to a concentration of buying interest. Why it works: Traders perceive this level as a "bargain," increasing demand and preventing further price drops. Visualization: On a chart, support levels often appear as a horizontal line or a sloping line below the current price where previous price action reversed or consolidated. Breakthroughs: If the price breaks below a support level, it may indicate a continuation of the downtrend. 2. Resistance: Definition: Resistance is a price level where an upward trend might pause or reverse due to selling pressure or profit-taking. Why it works: Traders perceive this level as "expensive," reducing demand and increasing selling activity. Visualization: On a chart, resistance levels are horizontal or sloping lines above the current price where the price struggled to move higher in the past. Breakthroughs: If the price breaks above a resistance level, it may indicate the start of a new upward trend. Common Characteristics of Support and Resistance: Role Reversal: Once a support level is broken, it often becomes a new resistance level, and vice versa. Psychological Levels: Round numbers (e.g., $50, $100) often act as strong support or resistance due to psychological significance. Volume Confirmation : High trading volume near these levels reinforces their strength. Types of Support and Resistance: Horizontal Lines: Based on past price action. Trendlines : Diagonal lines formed by connecting higher lows (support) or lower highs (resistance) in a trend. Moving Averages: Dynamic levels that adjust with price movement, often acting as support or resistance. Fibonacci Retracement: Levels based on mathematical ratios indicating potential reversal zones. How to Use Support and Resistance: Entry Points: Buy near support levels or after a breakout above resistance. Exit Points: Sell near resistance levels or after a breakdown below support. Risk Management: Place stop-loss orders just below support (for long positions) or above resistance (for short positions). Today, I decided to share some educational content, as my previous posts have primarily focused on trade ideas. I hope that you all would find this educational material valuable and engaging. If you appreciate this type of content, I encourage you to show your support by liking this post and following me for more educational insights in the future.
NSE:ASKAUTOLTDEducation
by TraderRahulPal
2
HOW LIQUIDITY WORKS!In trading, liquidity refers to how quickly and easily an asset can be bought or sold in the market without significantly affecting its price. It reflects the availability of buyers and sellers and the volume of trading activity for a particular asset. Key Aspects of Liquidity: 1. High Liquidity: The asset can be traded easily with minimal price changes. Common in popular markets like major stocks (e.g., Apple, Tesla), forex pairs (e.g., EUR/USD), and widely traded cryptocurrencies (e.g., Bitcoin). 2. Low Liquidity: It’s harder to find buyers or sellers, leading to potential delays or price changes during transactions. Common in niche markets, lesser-known stocks, or illiquid crypto tokens Importance in Trading: Efficient Price Discovery: High liquidity ensures prices reflect market demand and supply. Lower Risk: Traders face less risk of slippage (unintended price changes during execution) in liquid markets. Flexibility: Allows traders to enter or exit positions quickly, especially important for day traders and scalpers. In summary, liquidity is crucial for smooth and cost-effective trading. #Stockmarketeducation
NSE:HCLTECHEducation
by Sateesh07
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
What is Price Action ? Beginners Guide in Easy Steps Part -2In our previous discussion, we delved into the fundamental techniques of reading a price chart with key price action strategies. This time, we're set to expand our understanding even further. By the end of this article, you'll have a fresh perspective on analyzing charts and interpreting price movements, empowering you with deeper insights and more confident trading decisions. 1. Identify the direction of trend with the help of price action candlesticks a.)Strong Uptrend: Green candlesticks moving upwards continuously. Indicates strong buying pressure with no selling pressure. b.)Uptrend with Deep Retracement: Green candlesticks with some pullbacks. Sellers present, causing temporary price dips. c.)Indecisive Market: Alternating red and green candlesticks. No clear market direction, prices moving up and down without strong conviction. d.)Tight Range Before Breakout: Small red and green candlesticks within a tight range. Usually occurs before a significant breakout. e.)Weak Uptrend with Choppy Price Action: Alternating red and green candlesticks, choppy pattern. Indicates weak buying pressure and strong selling presence. f.)Healthy Uptrend: Green candlesticks with few red ones. Strong buying pressure with minimal selling, indicating a solid upward trend. 2. Importance of Wicks and the closing of candle Wick and a Doji Candle: Indicates early signs of buyers attempting to stop the price decline, If you observe closely there is a wick in previous candle also, on the break of high of the candle price hit trendline resistance and fallen again. Second Wick at the Same Zone: Sellers tried to push the price down again, but buyers stopped it, forming a bullish pin bar. First wick formed a demand zone but the second wick confirmed of buyers activity. After Some Fight, Buyers Win: Buyers managed to push the price up From the range, kicking out the sellers. More Lower Wicks: Indicates both buyers and sellers are active, but buyers are gradually winning, which is bullish. Lower Wick Shows Demand: After a downturn, the lower wick signals demand coming in. Inside Bar with Bigger Upper Wick: Shows bearish bias. The break of the low led to the continuation of the fall. NOTE: Wicks are an early indication of demand or supply presence, but the location of formation will be more important.It would help if you determined whether it's in an uptrend, downtrend, or range. 3. Multiple Candle Rejection A)Exhaustion Gap: At one point, the chart shows a gap up, where the opening price equaled the high of the day. This indicates an exhaustion gap, suggesting potential for a larger correction. Despite this, only a single bar correction occurred initially, showing resilience. B)Brutal Correction: A sharp, one-bar correction is seen, followed by buyers trying to push the prices back up within the same candle. This indicates a strong fight between buyers and sellers. C)Inside Bars and Tight Range: The presence of multiple inside bars with tight ranges and prominent lower wicks signals consolidation and market indecision. This is a period where neither buyers nor sellers dominate, often preceding a significant move. D)Break and Continuation: Eventually, the price breaks and closes above the range of the inside bars. This breakout triggers a continuation of the uptrend, evidenced by the subsequent series of green candles and higher prices. #Understanding Candlestick Wicks: Wicks/Tails: These are crucial as they indicate early signs of demand or supply. In this chart, the lower wicks suggest that buyers are stepping in at lower prices, even during pullbacks, showing underlying strength. 4.Importance of Close Of Candle If you wait for close of the Candle beyond support or resistance zone then it can help you take high-probability entries only and avoid fake breakouts. Fake breakout means when the price breaks the support or resistance area but it failed to sustain beyond that area and quickly comes inside the range. That's all for today's idea I hope you have gained good insights into how to read market direction with the help of candlesticks structure If you read market direction in consideration with the factors explained in Part 1 then the outcomes will be Great. If this idea helped you learn something new hit the boost button and share with your friends, Stay tuned new ideas in this series coming soon. Keep Learning, Happy Trading. NSE:NIFTY
NSE:NIFTYEducation
by SANJAYPATIDAR_
2
Bitcoin Crash Incoming? | Elliott Wave Theory Market ForecastGreetings, fellow traders, In this post, I employ "Elliott Wave Theory" to analyze and predict Bitcoin's price movements. The decision to utilize this theory stems from its robust framework for interpreting market cycles, which is essential for precise forecasting in the volatile cryptocurrency market. 1️⃣ The value of an asset directly reflects the sentiment of investors participating in the market. 2️⃣ When investors are optimistic, increased demand naturally drives prices up, while fear among investors leads to price declines. 3️⃣ Prices are a direct representation of investor sentiment, and the "Elliott Wave Theory" is a framework that patterns these price movements. ✅ Conclusion By applying the "Elliott Wave Theory," it is possible to anticipate Bitcoin's next move. Therefore, let's now dive deep into the "Elliott Wave Theory" to both predict Bitcoin's next movements and gain a thorough understanding of this theory. — ✔️BTCUSDT.P / BINANCE / 8H This chart review covers the period from January 24, 2024, to March 14, 2024. During this timeframe, a rare "Double Extended Impulse Wave" pattern appeared, characterized by an extended 5th wave. The supporting evidence for this pattern is as follows: 1️⃣ A breakout from the 1-3 trendline. 2️⃣ The 3rd wave extended beyond 1.618 times the length of the 1st wave. 3️⃣ The 5th wave extended beyond 1.618 times the length of the 3rd wave. 4️⃣ The 4th wave took longer to develop compared to the 2nd wave. I will explore these points in greater detail with the accompanying chart analysis below. — ✔️BTCUSDT.P / BINANCE / 8H This chart includes the evidence discussed earlier, specifically the first point mentioned. (Reference: 1️⃣) In wave analysis, trendlines play a crucial role. A break in the trendline often signifies the end of a wave or highlights the unique characteristics of that wave. In this post, we'll focus on the waves marked on the chart, so please pay close attention to the attached chart. The extension of the 5th wave is significantly influenced by the trendline connecting the peaks of the 1st and 3rd waves. This trendline is especially important in the context of a "Double Extended Impulse Wave." A "Double Extended Impulse Wave" indicates a strong buying momentum in a bull market or a strong selling momentum in a bear market. Therefore, it is expected that the upper trendline (the 1-3 trendline) would be breached as the wave progresses. (leading to a sharp rise in a bull market or a steep fall in a bear market). Please refer to the chart provided above. There are five instances of "Over shooting" , indicating a strong bullish market. This example shows how a single trendline can help identify the market's strength, weakness, and the type of wave pattern in play. Now, let's move on to the next chart. — ✔️BTCUSDT.P / BINANCE / 8H This chart includes the evidence discussed earlier, specifically the second and third points mentioned. (Reference: 2️⃣3️⃣) Additionally, this chart illustrates the internal Fibonacci ratios of the extended impulse wave. The characteristics of the internal Fibonacci ratios for an extended 5th wave in an impulse wave are as follows: (Satisfied: ✔️ / Not Satisfied: ✖️) ✔️ The 3rd wave rises between 100% and 261.8% of the length of the 1st wave. ✔️ The 5th wave rises 161.8% of the (0-3) length, measured from the end of the 4th wave. (It should be shorter than 261.8%.) ✔️ The 5th wave is longer than the shorter of 100% of the (0-3) length and 161.8% of the 3rd wave. Since this wave satisfies all the above conditions, it is highly likely to be a Double Extended Impulse Wave with an extended 5th wave. — ✔️BTCUSDT.P / BINANCE / 8H This chart represents the external Fibonacci ratios of the extended impulse wave. (For an impulse wave with an extended 5th wave, the external ratios are considered more reliable than the internal ratios.) The characteristics of the external Fibonacci ratios for an extended 5th wave in an impulse wave are as follows: (Satisfied: ✔️ / Not Satisfied: ✖️) ✔️ The length of the 5th wave, measured from the end of the 3rd wave, forms at 100%, 161.8%, or 261.8% of the (0-3) length. Since this wave satisfies all the conditions, it is highly likely to be a "Double Extended Impulse Wave" with an extended 5th wave. (The author also considers the external ratios to be highly reliable.) — ✔️BTCUSDT.P / BINANCE / 8H This chart includes the fourth piece of evidence mentioned earlier (Reference: 4️⃣). One of the most essential concepts in "Elliott Wave Theory" is "The Rule of Alternation." This principle is foundational to understanding market movements and is critical to the rules governing wave progression. Without it, Elliott Wave Theory would lose much of its practical value. "The Rule of Alternation" is most clearly demonstrated in the period of corrective waves. In the chart provided above, you’ll notice a comparison between the length of the 2nd wave and the 4th wave. Typically, before an extended wave appears, the market tends to undergo a longer or deeper correction. In this case, the 4th wave is noticeably longer than the 2nd wave, which satisfies this condition. This observation significantly increases the reliability of the wave pattern. — ✔️BTCUSDT.P / BINANCE / 1D Now, let's discuss the potential future direction. If the low point of the 5th wave within the extended impulse wave breaks, it is likely that this impulse wave marks the final wave of a larger wave pattern. In simpler terms, the 5-wave extended impulse wave we've discussed so far may represent the last wave of the current upward trend. To put it even more clearly, if the price falls below the $50,922.5 level, there is a high probability that the market has transitioned into a downtrend. Please refer to the following chart for further details. — ✔️BTCUSDT.P / BINANCE / 1D Based on the assumption that the market has transitioned into a downtrend, I’ve constructed the following scenario. It appears that a Corrective Wave (Flat) has already occurred, and the market is currently experiencing a correction in response to this wave (indicated by the red dotted line). According to this scenario, even if the price experiences an upward movement, it is likely to be a technical rebound within the broader context of a continuing downtrend. — Conclusion Today, we applied the Elliott Wave Theory to the actual Bitcoin chart to analyze the market. I made every effort to maintain an objective perspective. I am aware that many traders and investors are anticipating a continued upward trend. However, my intent in presenting a bearish scenario was not to gain attention, but rather to analyze the market as objectively as possible. It’s important to approach the market rationally, rather than simply calling for a rise without substantial evidence. I encourage you all to remain wise traders and investors who do not succumb to 'FOMO' (Fear of Missing Out) and always maintain an objective view of the market. Thank you for taking the time to read this post. If you found this analysis helpful, I would greatly appreciate it if you could give it a "boost." Should there be significant interest in this post, I'll consider creating follow-up analyses.
Education
by Killer_Whales
2
Mastering Trade Setup with simplicity of dow theorySimplifying Trade Strategies with Dow Theory Wisdom Welcome to the world of trading, where the Dow Theory can be your trusty guide. Let's break down an easy trade strategy that suits different market situations. Dow Theory Insights Dow Theory, a key tool in technical analysis, says understanding trends is crucial. Figuring out the trend is where we start, setting the stage for smart trade decisions. Bullish View If we're feeling positive Higher Lows: Check if prices keep going up. Near Support: Make sure prices are close to a support zone. Reversal Signs: Look for any candle patterns signaling a turnaround. Buying Setup: Stoploss: Think of it like a safety net, set it at the recent lowest point. Execute a buy trade when these factors line up, always keeping an eye on that stoploss. Bearish View If we're feeling negative Lower Highs: Check if prices keep going down. Near Resistance: Make sure prices are close to a resistance zone. Reversal Hints: Look for any candle patterns signaling a potential shift. Selling Setup: Stoploss: Your safety measure, set it at the recent highest point. Execute a sell trade when these conditions come together, always mindful of that stoploss. Sideways View For a market that's just hanging out Draw Lines: Sketch lines above and below the current prices (Support and Resistence Trendlines) Be Patient: Hang tight until prices break above or below those lines. Only jump into a trade when the market decides where it's going. In the lively world of trading, Dow Theory keeps us wise. By using these strategies, along with clever stoploss placements, you can navigate the markets with ease This post is for educational purposes only. Trading involves risk, and past performance is not indicative of future results. Always do your research and consider consulting a financial advisor before making any investment decisions. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Hope this post is helpful to community Thanks RK💕 Disclaimer and Risk Warning. The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
NSE:NIFTYEducation
by RK_Chaarts
25
What is Price Action ? Beginners Guide in Easy Steps NSE:NIFTY What is Price Action Really? When I started learning I was using a lot of indicators and crap but then I heard about Price action, its meaning is pretty vague and confusing after a lot of effort I get to know that the simplest things work best. Let's see a structured way to approach Price Action analysis. 1. Chart Reading Bar by Bar. Studying the Previous candle reflects a lot of important information on the market movement and future direction. 2. Reading the Context and the whole Structure. *The circles marked on the chart show the best location where certain candlestick formation offers good trading opportunities. *The reading chart in the overall structure helps to eliminate taking trades in the direction of exhausted trends. 3. Identifying Momentum Increase or decrease. 4. Adding Volume Confirmations. Volume is the better half of price and without volume analysis can be incomplete. These are some of the factors that start the price action analysis. By practice, one can look into the deeper significance of these factors and use them easily. I hope this has added some new value to your knowledge, if you like these educational ideas, Share your views and like. Will Upload the Next Part with more factors. Keep Learning, Happy Trading.
NSE:NIFTYEducation
by SANJAYPATIDAR_
18
Concept Of Support and Resistance & Roles ExchangeDefination Of Support and Resistance levels-: The support and resistance (S&R) are specific price points on a chart expected to attract the maximum amount of either buying or selling. The support price is a price at which one can expect more buyers than sellers. Likewise, the resistance price is a price at which one can expect more sellers than buyers. Particular defination-: Resistance As the name suggests, resistance is something which stops the price from rising further. The resistance level is a price point on the chart where traders expect maximum supply (in terms of selling) for the stock/index. The resistance level is always above the current market price. The likelihood of the price rising to the resistance level, consolidating, absorbing all the supply, and declining is high. The resistance is one of the critical technical analysis tools which market participants look at in a rising market. The resistance often acts as a trigger to sell. Support understanding the support level should be quite simple and intuitive. As the name suggests, support is something that prevents the price from falling further. The support level is a price point on the chart where the trader expects maximum demand (in terms of buying) coming into the stock/index. Whenever the price falls to the support line, it is likely to bounce back. The support level is always below the current market price. Reliability of S&R The support and resistance lines are only indicative of a possible reversal of prices. They by no means should be taken for ascertain. Like anything else in technical analysis, one should weigh the possibility of an event occurring (based on patterns) in terms of probability. Key takeaways from this chapter 1-S&R are price points on the chart 2-Support is a price point below the current market price that indicate buying interest. 3-Resistance is a price point above the current market price that indicate selling interest. 4-To identify S&R, place a horizontal line in such a way that it connects at least 3 price action zones, well-spaced in time. The more number of price action zones (well spaced in time) the horizontal line connects, the stronger is S&R 5-S&R can be used to identify targets for the trade. For a long trade, look for the immediate resistance level as the target. For a short trade, look for the immediate support level as the target. 6-Lastly, comply with the checklist for optimal trading results How support and resistance changes their roles-: If the price falls below a support level, that level will become resistance. If the price rises above a resistance level, it will often become support. As the price moves past a level of support or resistance, it is thought that supply and demand has shifted, causing the breached level to reverse its role. Examples by Snapshots-: Support become Resistance Resistance become Support Conclusion Technical analysis is one approach of attempting to determine the future price of a security or market. Some investors may use fundamental analysis and technical analysis together; they’ll use fundamental analysis to determine what to buy and technical analysis to determine when to buy. Don’t forget that technical analysis is not an exact science and it is subject to interpretation. If you continue your study of technical analysis, you’ll likely hear someone say it is more of an art than a science. As with any discipline, it takes work and dedication to become adept at it. Best Regards- Amit rajan
NSE:NIFTYEducation
by AMIT-RAJAN
13
Trends- Based on Price MovementUptrend- In an uptrend, both the peaks (tops) and troughs (bottoms) of a stock chart keep increasing successively. So, every day or so, the stock price touches a new high and falls lower than it did previously. Don’t be a mistake; this need not be a lifetime high. It could be the highest the stock touched in the past few days, weeks, or months too. This steady rise in tops and bottoms indicates that the market has a positive sentiment. It expects the stock has a higher chance to appreciate more than depreciate. So, more investors buy, thus driving the price higher. Similarly, each time the stock falls, investors see it as an opportunity to buy even more. They don’t wait for it to fall to the previous level. They buy the stock before that. This arrests the fall. Sideways- In a sideways trend, a stock doesn’t move notably in either direction during an extended period. Peaks and troughs continue to be constant and there is no significant move to decide whether to buy a stock or not. A sideways trend occurs when the force of demand & supply are nearly equal. A sideways trend is also called a ‘horizontal trend’. In this trend stock trading between two parallel horizontal support and resistance lines with less movement. Downtrend- A downtrend is a pattern, where a stock is falling constantly. Not only are successive peaks lower, but successive troughs are also lower. This means that investors in the market are convinced that the stock will fall further. Each little rise in the stock’s price is used by investors to sell their existing quota of shares. No further buying takes place at these levels. Such a stock must not be bought, no matter how much its price has fallen especially if you are a short-term investor. If you are a long-term investor, you may want to wait until the stock price falls further.
NSE:NIFTYEducation
by Mr_Chartist_
Find a perfect Trend Line With this check listThere are many traders out there who trade trend lines. Mastering trend lines is not easy as it seems, with experience things changes with your perception about Trend Lines. What I learned from my experience is that it is important to find a trend line, but it is more important to filter it so that, we can trade only the potential opportunities. Here I do not say that those trades which we filter out will not work or we efficiently filter out those less profitable trades, because adding a filter in your system not only filter trades which are unprofitable but also filter out profitable trades. You have to accept that you are leaving better for best. So, what are the check points I follow to filter out Trend Lines, 1) Touches, I prefer more than three touches and I strictly follow it. See what happens with two touch the number of trades increases too much; I am not saying trend line with two touches does not work but that trend line cannot be of higher profit potential than 3 or four touches. 2) Distance between touches, it is stated that if touches have equal distance between them the trend line is considered as a good Trend Line, but i do not strictly apply if the touches are places at enough spacing and the distance between then approximately equal that it is a good Trend Line. I do check distances but not strict on it. 3) Apply your own logic, this is a very subjective thing, person to person it will vary. Every trader looks the same setup differently, setups will only work when his psychology matches with those setups otherwise it will not work. Build your own logic. At last, I want to end this post by a quote I have in my mind. "True Knowledge cannot be taught, it can only be caught."
Education
by TRADEWITHFUN247
11
FALLING TREND LINE Education Falling trend line: Rising trend line is the type of trend line which typically helps trader in identifying the exact bearish momentum (downward trend). The rising trend line or descending trend line, be connected from highest price traded within the time range, and connect to the lower prices of the asset or security. Traders may prepare for selling after retest of the falling trend line and stop above the trend line. It helps minimizing risk and maximizing rewards when used appropriately.
Education
by CELGIB_TRADING
How to Draw Trendlines and Their ImportanceHi, In this idea I will try to throw some light upon the traders' favorite tool, that is trendlines (also known as dynamic support and resistance). Trendlines represent the direction of trend- up or down. They also indicate the strength of the trend. Steeper trendlines means more momentum than a less steeper trendline. The following discussion would focus mainly upon: ✅How to draw trendlines & ✅Importance of trendlines Let us discuss these topics one by one. ✅How to draw a trendline? For drawing a trendline, we need at least two touch points. Join the two points and extend the line forward. These two touch points could be: 1. A low made by the stock in a correction and a swing low/trough/valley made due to a pullback 2. Two troughs/valleys on the chart, made during pullbacks/consolidation see chart 👇 There are higher chances that the price will hold the trendline during subsequent touches. ✅The steeper ones will need adjustments A sharp price wave on a chart may have shallow pullbacks. This leads to a steeper trendline. This is because more traders sitting on the sidelines wanted to get in quickly, so as not to miss out the move. These sharper trendlines are less likely to hold and may soon need to be adjusted as the price progresses. See chart 👇 ✅Breakout of a down-trendline During corrections you might have the urge to connect swing lows without including the lowest point. There is nothing wrong in it. Price often takes support from these lines too but we need to trade with caution in such cases. When the price breaks an up-trendline (yellow), we need to wait as the price may change behavior and starts forming lower peaks/highs. This offers us an opportunity to draw a down-trendline (red). We don't need to buy before the price breaks out of this down-trendline. See 👇 As the price makes new highs, we again join the lowest low (base) and the most recent larger swing low to make a new trendline. See 👇 ✅What is meant by a valid trendline? Many users might have different verdicts for the validity of a trendline but I am sure they would all agree upon one thing, that is touch points. The more the touch points available to draw a trendline, the better. More touch points offer validity and solidarity to the trendline. And hence more chances for traders to take high probability trades near the trendline. See the chart above 👆 ✅Invalidation and Breakdown As I said before, the steeper trendlines are less likely to hold for long. They may lead to a correction or a pullback. At one point the major trendline would also be invalidated. This would happen when the price manages to break the most recent attempt (swing low at the trendline) to hold the trendline. This often leads to a steep fall or a long term correction. ✅Up-trendline as resistance We all know that horizontal support and resistance levels once taken out, reverse their role. Resistance once broken turns out to be support and vice versa. The same is true for dynamic support and resistance levels (trendlines) As the price breaks an up-trendline and then approaches it again, it tends to react. The same is true for down-trendline. Also notice that we have a major down-trendline (red) which is in action and it had a nice confluence with the up-trendline (yellow). The price hit that confluence and reacted. I just hope that this information would be useful for some traders. Thanks for reading.
NSE:AMBUJACEMEducation
by Bravetotrade
11
How to draw a good Trend Line .?(SCANNING TRENDING SCRIPS) 1) First, find a trending stock where , price moving up or down in a swinging fashion, like higher swing highs higher swing lows for up trend and lower swing lows and lower swing highs for down trend. ------------------------------------------------------- (FILTERING OUT THE IMPERFECT TREND LINE) 2) At least three touches ,I mean touches without crossover. If you making a trend line by connecting swing lows then price should not be traded both the side price should be at left side of the trend line only that is the core concept of trend line. ------------------------------------------------------- 3) Check the distance between touches the distance between consecutive touches should not very too much. ------------------------------------------------------- 4) (SLOPE) The slope of trend line should not be very steep. Flat trend line is okay but very steep trend line is not a good trend line. Note: the trend lines are not very different from Support and resistances , The concepts apply to them is exact same just with one difference is that they are "TILTED". Trend lines also called tilted support and resistance. ========================== The more you practice the more you get the grip.There are some trend lines ideas I shared where you can observe how price behave at trend lines. Examples:
NSE:NATIONALUMEducation
by TRADEWITHFUN247
21
Using the Moving Averages and RSI to optimize buying processIn this chart I have explained my rationale using Moving averages, relative strength and RSI to initiate a buy on this scrip. I always use a weekly chart to check for overall trend and analysis and based on it will initiate a buy on a Daily chart. Explanations are given on the chart. The idea is get the maximum conditions in our favour for a profitable trade. Hope it will be helpful. Another important thing is to always define a stop loss if the trade does not go according to plan.
TEducation
by TheUnlearningOne
25
Educational Post Ascending Channel**** Educational Post: ASCENDING CHANNEL An ascending channel is the price action contained between upward sloping parallel lines. Higher highs and higher lows characterize this price pattern. Technical analysts construct an ascending channel by drawing a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs. The pattern’s opposite counterpart is the descending channel. KEY TAKEAWAYS 1. An ascending channel is used in technical analysis to show an uptrend in a security’s price. 2. It is formed from two positive sloping trend lines drawn above and below a price series depicting resistance and support levels, respectively. 3. Channels are used commonly in technical analysis to confirm trends and identify breakouts and reversals. ****Trading the Ascending Channel 1. Support and Resistance: Traders could open a long position when a stock's price reaches the ascending channel’s lower trend line and exit the trade when the price nears the upper channel line. A stop-loss order should be placed slightly below the lower trend line to prevent losses if the security’s price abruptly reverses. 2. Breakouts: Traders could buy a stock when its price breaks above the upper channel line of an ascending channel. 3. Breakdowns: Before traders take a short position when price breaks below the lower channel line of an ascending channel, they should look for other signs that show weakness in the pattern.
Education
by nawaab001
The Ultimate Price Action Breakdown Strategy Preface Alright, the operation started after creating an extreme low at 120.20. Price has created an upward channel from the extreme low, where the equilibrium has occurred between bull and bear traders. Control line has given eleven touches, which shows the strong gravitation at the middle. Here, we can see four reversals on the upper band, and three reversal points occurred on the lower band. We have two opportunities: 1. Now, the price is on the H-line, and the breakout of the h line indicates the lower band touch. 2. Bull can buy at excess, or they can enter at reappearing in the value area for the target of the control line. Every beginner who wants to start trading with naked strategy (without indicator) can use this method because the price is the thing that will pay you. Let me explain to you important aspects of the breakdown strategy. Value area: A zone in which bulls and bears both are satisfied to stay within it. In this zone, supply and demand equally exist. Ascending Value area: Range-Bound Value area: Descending Value Area: Value area has two bands: Upper band: Upper band indicates demand-supply. In this chart, the price has taken four reversals from the upper band to maintain the equilibrium. The upper band put a stop to the bull power. Lower Band: The lower band indicates demand pressure. In this chart, the price has taken three reversals from the lower-band to maintain the equilibrium. The lower band put a stop to bear power. ------------------------------------------ No trading zone: In order to respond to either bull or bears initiative, the price creates an area. In which no trading activities have taken. It helps to find the weakness of any particular move. ------------------------------------------ H Line: After completing the last share move, the price creates the bulk trading activities, where bulls' power becomes dull. Breakout of the H-line indicates the cease of the particular move. ------------------------------------------ Excess: Excess is regret and fake-out. In simple words , price breaks the upper band and again re-enter into the parallel channel. Buying or selling at the excess is the perfect deal. An excess is a signal of reversal. The psychology behind the control line : Price is forming in the parallel channel, but bulls are not satisfied with the current trend. That's why bulls increase demand pressure to break the upper band of the value area. After breaking the upper band, bulls face some problems with profit booking. Now, bulls realize that the price is not going up. Bulls give up on the thought of trend change. Bears were watching this patiently. And after they realize that prices are too high, they increase supply pressure above the upper band of the channel. Now bulls are out of the market, and the seller has maintained the equilibrium & Vice versa. ------------------------------------------ Control line: The Control line is the gravitation point of any value area. We can draw by connecting the reversal points in the middle. The more the points are available, the higher the effectiveness. Please note that the price can not stay away from the control line of the value area. We can use it as a price target or breakout trade. Here, the price has given eleven touches on the control line. ------------------------------------------ Breakout or breakdown of the channel: Bulls and bears both disagree with the current price trend. Either bulls or breaks out the value area by giving consistent closing. It often happens after a complex correction or trend change. I will upload practical work on this idea. Kindly wait for the implementation. Thank you for your support. To be continued.....
NSE:INDUSTOWEREducation
by forextidings
55
Market Crash:- Is it an opportunity? Hi Everyone! In this analysis we'll look at some chart after we met Crash. Whenever market crash it's an opportunity for us to buy a good share at discounted price. Just Switch to the higher time frame ( Monthly, Weekly ) and find out the major Support/Resistant. It'll try to test major Support/Resistant, Trendline , Channel. ASHOKLEY :- The chart is self explanatory. HDFCAMC :- Find support at IPO's high in 2020 Corona crash. SBIN :- Major support @150 AXISBANK :- Create support at previous resistance. JSWSTEEL :- Create support at previous major resistance. VEDL :- No need to explain. Q- Can we enter as soon as price touch the Support/Trendline/Channel? Ans- No, Wait for Price Action or W pattern in Short time frame { D } Disclaimer:- This is Not investment advice. It's just for learning purpose. Invest your capital at your own risk. Please like, share & follow if you find this article helpful for you in any manner.
NSE:TATAMOTORSEducation
by TheGopal
4