Raising initial capital: 4 approaches, of which one is not goodLet's break down the thought from the previous post in more detail. Obviously, to buy stocks, you have to have money, and if you are determined to become an investor, get ready to open your piggy bank. If you don't have savings, however, don't despair, there are other options.
I suggest you look at the following 4 options for acquiring the finances to buy stocks:
- Reduce your current expenses
- Sell unnecessary assets
- Increase your regular income
- And the option I don't recommend using at the start is to borrow.
I immediately stipulate that it is your, and only your responsibility how to apply the knowledge gained - to use something of the proposed or to go another way. I do not insist on anything. Rather, I am sharing information, but the decision is up to you in any case.
My opinion - always start with reducing your current costs, because the funds you save now give you a chance to increase your wealth in the future through investing. Make it a rule to plan your purchases in advance and buy only what is on your list. Don't go to the store without a list, otherwise you will buy more than you really need.
Next. Look at your possessions. Make a list of what you can sell without compromising your financial and mental well-being. Let what you don't need now serve to increase your wealth in the future.
Increasing your regular income is probably the most time-consuming but feasible way to accumulate funds for investment. Many people are often faced with the problem of choosing between a job they love where they don't earn enough and a job they hate with a higher income or, even worse, a job they hate with a paltry income. In the latter two cases, I recommend becoming an active user of services that will help you find the job you want (but don't act in haste, don't quit a job you don't like right away). Remember our goal is to keep and increase our income, not lose it altogether. In the case of a job you love and don't make much money, think about how you can increase your income in your current job. Sometimes all you have to do is make up your mind and ask your employer for it. Even a small increase will help you start saving. And if you have both a job you love and a desired level of income, I congratulate you, you are truly lucky.
Moving on. Borrowing for investments is the riskiest option. I highly do not recommend it, especially at the beginning of your investing journey. You definitely should not take a loan from a bank or other financial institutions. The credit rate will only increase your costs, and the need to repay the loan every month will break your entire investment strategy.
If family, friends or acquaintances are willing to lend you money long-term and without interest, think about whether your lender is aware of the risks and whether you are aware of the risks associated with investing in stocks, and whether this person will demand the money back before the agreed upon deadline. Even if you have agreed on everything, write down all of the terms of such a private loan on paper, so it is easier to resolve any disputes.
I always insist that the investment is conscious, that you understand and are ready to bear the responsibility and risks. So if you have even the slightest doubt about the borrowing option - don't take it! Consider another option. Ideally - work out a step-by-step plan and accumulate the necessary amount of money gradually.
Beyond Technical Analysis
Investing is the ability to say "no" so that you can say "yes"Have a wonderful day, my dear friends!
Let's get acquainted. My name is Capy. Someday I will tell you my stunning life story, and how fate has tied me to investing. I can't quite believe it myself sometimes... But that's not what today is about.
Today I'm starting a series of posts to introduce you to my vision and strategy in the very multifaceted and insanely interesting topic of stock investing.
Let's start by figuring out why you should be an investor?
Many people think that investors are some kind of Wall Street wolves who trade stocks of companies and make unimaginable amounts of money on it. I'm sure there are those too. But, in fact, investing has long ceased to be the monopoly of the employees of banks, brokerage companies or big businessmen.
Investing is available to absolutely everyone who plans their wealth and has the basic knowledge obtained at university. Or aspires to learn this indomitable beast. This is the reason I started this blog: to help everyone who wants to understand and share my ready-made strategy that you can apply in the process of investing.
It's worth saying that every one of us has done the act of investing at least once in our lives, perhaps without even realizing it. For example, when placing money on a bank deposit (the well-known bank deposit), renting out real estate, opening a business or just learning. All these actions have one common formula: you give something away now in order to get it back in the future and, in addition, to make a profit.
When you rent out an apartment, you cannot live in it because you have given it to other people to use. But when the lease expires, you'll get your apartment back, plus a profit in the form of the rent you've been receiving all that time.
When you start a business, you put money into it so you can pay it back later through the proceeds. And, of course, you expect the returns to exceed the costs invested.
When you invest in education, you plan to use what you have learned to achieve something, whether it's getting a job or enriching your inner world.
It is the expectation of profit that is the main motivating factor for the investor and the main purpose of the investment.
If you give someone an apple and they give it back to you after a while, that's not an investment. And if you give someone an apple, and after some time you get two apples back - you are already an investor, because you made a profit in the form of an additional apple.
The upcoming series of posts will focus on one of the investment options - namely, investing in stocks of companies. I plan to teach you how to approach each trade wisely and in a measured way to keep you from engaging in short-term speculation that looks like a casino game.
Going back to our formula, a stock investment is a transfer of your money to a particular company in exchange for a stake in its business. The purpose of these actions is to make a profit in the future from the sale of the shares (in the case of buying cheaper and selling higher), or the second option - to receive dividends. Dividends are when the company shares with you a portion of the profits in proportion to your share in the business. But we will focus on the first option to make a profit, that is "buy cheaper - sell more expensive". And the dividends to consider as a nice bonus to this strategy.
I will publish a new post soon. Let's talk about approaches that will allow you to find funds for investment.
Introduction to Volume profile If you have been in the market for some time, you may have heard of a study called the “Volume profile” . Today we are going to take a deeper look at volume profile, along with a few example strategies. This post will also lay the groundwork for future posts about more advanced volume profile topics.
Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading!
The post will shed some light on the following topics:
→ What is volume profile?
→ Difference between traditional volume indicator and volume profile
→ Volume profile terminology
→ Different types of volume profiles
→ Example strategy
👉 What is Volume profile?
Volume Profile is an advanced charting study that displays trading activity at specific price levels over a specified time period. On the chart, it plots a horizontal histogram to reveal significant price levels based on volume.
Volume Profile, in essence, takes the total volume traded at a specific price level during the specified time period and divides it into either buy volume or sell volume, making that information easily visible to the trader.
👉 Difference between volume profile and traditional volume indicator
The core difference between the traditional volume indicator and the volume profile is how they consider volume with respect to time and price.
The traditional volume indicator plots histograms at specific times, without giving any relevance to the price levels. On the other hand, the volume profile gives importance to price levels without emphasizing on the time scale.
👉 Volume profile terminology
■ Point of Control (POC) – The price level for the time period with the highest traded volume.
■ Profile High – The highest reached price level during the specified time period.
■ Profile Low – The lowest reached price level during the specified time period.
■ Value Area (VA) – The range of price levels in which a specified percentage of all volume was traded during the time period. Typically, this percentage is set to 70% however it is up to the trader’s discretion.
■ Value Area High (VAH) – The highest price level within the value area.
■ Value Area Low (VAL) – The lowest price level within the value area.
■ High Volume Nodes (HVN) – Peaks in volume around a price level.
■ Low Volume Nodes (HVN) – Valleys in volume around a price level.
👉 Different types of volume profiles
TradingView currently provides 5 types of volume profiles. These are:
1. Auto anchored - Specifies the anchor of the volume profile calculation, i.e. how often the volume profile recalculates and where it starts.
2. Fixed range - Builds a profile using the custom anchors provided by the user.
3. Periodic - Sets the period for which the indicator builds volume profile, one profile for each new period.
4. Session (Normal and HD) - SVP displays a profile for all the market action that occurs within a session. If set to "All" (default), the indicator will consider the pre-market, main trading session and post-market as one session.
5. Visible range - Builds a profile considering all the visible data on the screen.
Please note that the Volume Profile is a paid-only feature that can be accessed by subscribing to one of our paid plans. If you need to upgrade your account, be sure to check out our Black Friday sale . You can get up to 60% off on subscriptions.
Example strategy
Just like with most other tools or studies, Volume Profile has a number of uses. There are many trading strategies out there using Volume Profile as a key component. Below are the basics of one such strategy which is based on comparing the current day’s opening price to the previous day’s Volume Profile.
👉 If the current day opens above the previous day’s value area (but still below the Profile High)
A sample setup is to look for the price to retrace back toward the Point of Control and then proceed to rise (the direction of the day’s open). Therefore during the retracement to the Point of Control, there is a buying opportunity.
👉 If the current day opens below the previous day’s value area (but still above the Profile Low)
Some traders may look for price to retrace back towards the Point of Control and then proceed to fall (the direction of the day’s open). Therefore during the retracement to the Point of Control, there is a selling opportunity.
👉 If the current day’s opening price is completely outside of the previous day’s profile (above the Profile High or below the Profile Low)
In general, this is seen as a possible runner in the direction of the opening price relative to the previous day’s profile range but different traders may look at it differently.
Thanks for reading! As we mentioned before, this isn't trading advice, but rather information about a tool that many traders use. Hope this was helpful!
See you all next week. 🙂
– Team TradingView
Feel free to check us out on Twitter and Instagram for more awesome content! 💘
My crazy partner is Mr. Market!We are used to the fact that the world's most prominent investors are known for their outstanding deals, returns and stability of results over a long time horizon. Yes, all this is certainly a sign of excellence, but no investor has gained his popularity through books. The books he wrote.
This man created his writings back in the 1930s and 1940s, but they still inspire anyone who has taken the path of smart stock investing. You've probably guessed by now who we're talking about. It's the humble author of The Intelligent Investor and Warren Buffett's teacher, Benjamin Graham.
It's amazing that after many years, this book is still considered the bible of investing on the basis of fundamental analysis - Graham wrote such a thorough description of how a person investing in stocks should think. His insight into the market can be useful to anyone who is exposed to this chaotic environment.
To understand Graham's philosophy, imagine that the market is your business partner "Mr. Market." Every day he stops by your office to visit and offer you a deal on your mutual company stock. Sometimes he wants to buy your stock, sometimes he wants to sell his own. And each time he offers a price at random, relying only on his gut. When he panics and is afraid of everything, he wants to get rid of his shares. When he feels euphoric and blind faith in the future, he wants to buy your share. That's the kind of crazy partner you have. Why is he acting this way? According to Graham, this is the behavior of all investors who don't understand the real value of what they own. They jump from side to side and do it with the regularity of a "maniac" every day.
The task of the prudent investor is to understand the fundamental value of your business and just wait for another visit from the crazy Mr. Market. If he panics and offers to buy his stock at an extremely low price - take it and wish him luck. If he begs to sell him the stock and calls an unusually generous price - sell it and wish him luck.
Of course, after a while, it may turn out that Mr. Market was not bad at all and made a very profitable deal with you. But the fact is that on the long horizon of time his luck will be washed away by a series of stupid things he will inevitably do. As for you, rest assured that tomorrow you will meet another Mister. So, as Graham has taught us, is teaching us, and will continue to teach us - you just have to be ready for it. Understanding the fundamental value of the company, this meeting will bring you nothing but pleasure!
How to Study Price and Wave volume RelationshipHi 👋
In this post I would try to throw some light on the Price & Wave Volume relationship (popularized by late David Weis).
This method may help trades in two ways:
1️⃣Ride the trend
2️⃣Picking the end of a rally
I came across this chart randomly and found that there are a few principles that I can discuss with the help of this chart.
Before reading any further I want to disclose that this technique was not originally developed by me. However, different authors may have different interpretations when it comes to some techniques of discretionary trading. This is a small piece of what I have learnt as a big follower of price action trading.
I don’t want to go for bar by bar analysis here due to time and space constraints, so I have marked a few important places (as numbers in green rectangles) that are important and need to be discussed.
The numbers in white are the cumulative wave volume in crores. This means just keep on adding the volume of each up bar until there is a reversal. I have taken the reversal a 2points on closing basis. Which means I keep on adding the volume until the price closes 2points below the close of the previous bar. The opposite is true for down waves.
🚀 Point1
If you look at the upwave preceding the downwave at point1, it is the sharpest of the rallies from March 2020 lows (scroll back the chart a bit). Also wave volume is the highest (37cr) compared to 10,19 and 18cr on previous upwaves.
At point 1 there is 10cr volume on the downwave, which is the highest on any downwave in the rally from Mar2020 lows. This is an alarming signal that sellers are getting active. But this may not impress us to liquidate our trades as we need further evidence to confirm this weakness.
🚀 Point2
Here we have very high volume accompanied by the widest bar (in the rally) but closing in the middle. These three things confirm here that sellers have stepped in and the stock is weakening.
🚀 Point3
There is a rally back to the highs but this time with lesser volume (29cr compared to 37cr) than preceding rallies. This is our second confirmation that buyers are turning there back at this level, at least for now. This is a sure exit opportunity for investors who bought at the lows.
🚀 Point4
There was a sharp reaction with huge volume of 31cr and very wide bar, closing off of its lows. At this point there is still confusion that the trend has reversed or not. If it was a reversal then there would have been a follow through of 31cr volume on the downside but it is not so. For the next 3 days price sustained above the low of this wide downbar.
🚀 Point5
The sellers again tried to push to the stock down but look at the volume in this wave. Are you getting it now? Its just 13cr instead of 31cr on the last downwave. This infers here that seller are not interested. So if seller are not interested then what will happen? Buyers will take over.
🚀 Point6
The sellers tested the level of 1, 4 and 5 a few more times, buyers holds it and that develops a support. There was a very strong rally (compared to rallies in the last one year) back to the highs and volume is again 23cr which is lesser than volume at previous highs.
Lesser volume could have 2 interpretations – there are less sellers this time and/or buyers are not interested.
🚀 Point7
The stock is back to the support again. But volume on downwaves is much lesser in relative terms. In fact, it decreasing from 13 to 4 and then 2cr (see chart). Where have the sellers gone? They don’t want to sell at the support.
🚀 Point8
Lack of selling leads to buying and eventually to new highs. Notice that there in very less volume at point 8 (only 4cr). This time sellers attempt (5cr) was failed quickly (without hitting support) and new highs were made outside resistance (developed at 2, 3 and 6).
At this stage, when the price is closing outside the resistance, I would expect more volume to come in. More volume at this stage would indicate that buyers are interested but that is not the case here.
🚀 Point9
Point 8 looked like a failed breakout attempt. The price fell back into the trading range (between support and resistance). If I look at volume here, it is 15cr on this downwave. In the immediately preceding fall with 17cr it touched the bottom end of the range but this time with 15cr it is just at the middle of the range. This signifies re-accumulation at point 9.
🚀 Point10
Re-accumulation lead to a rally back into resistance. We have 13cr as of now. Its too early to say, before this upwave ends, but 13cr is less (for me at this point) to push it any further. It seems holding back in the range.
🚀🚀 Final thoughts
This is a very nice and rare example showing both distribution (by the seller at resistance level) and accumulation (by the buyers at support level). Normally the price peeps outside the range on both sides and fails to follow through, until there is a decisive break on either side.
I hope you learnt something new in this post.
Now you can do one thing, press 🚀 to encourage me to write more educational stuff.
Thanks for reading.
Viewing Deep Preview on Fibonaccisjust now
Hey Everyone,
Today we are again with a lot of information and a bunch of topics, so consider following us for regular ideas and market updates
Let's go Strictly into the idea
So In the last idea we covered an overview but now lets cover a detailed view and even learn about Fibonacci Extensions, Fibonacci Number and Lines and more and more.
What Are Fibonacci Retracement Levels ?
Fibonacci retracement levels are horizontal lines that indicating where support and resistance can take place . Each level is having their own percentage. The Fibonacci retracement levels are 78.6% , 61.8% , 23.6% and 38.2% . But the most working levels of a Fibonacci are 38.2%, 61.8% and 78.6% . The indicator is very useful because it can be drawn easily and it can tell you many thing such as support and resistance . It can be drawn between high and low where the lines form is your support and resistances .
What Are Fibonacci Extensions ?
Fibonacci extensions is a tool that can be used to target Profit or approximate how far a price should travel after a pullback ends . Extension levels are also the areas where the price may reverse
These levels are based on Fibonacci ratios . Common Fibonacci extension levels are 261.8% , 200% ,161.8% , 100% , and 61.8% .
What Is the Fibonacci Number and Lines ?
The Fibonacci Numbers and Lines the sequence of numbers , is a slowly increasing series where every number is the equal to sum of the preceding two numbers .
We will meet you very soon so consider following you can unfollow us any time
Thanks for reading it and giving it your time
Bye 😁
Consistent Trader - Chapter 1Market has opened. Price is moving. You are watching the market. The question is, “do you live in present, understand the market or living in the present or future?”
Everybody enters in to trading, thinking that it is easy to make money in share market. They never think to make easy money, one has to be a consistent trader and it takes time.
The phases of a trader are
Newbie – no knowledge, lot of expectations
Senior newbie – Gain knowledge, less expectations.
Intermediate – Unable to manage emotions during trading, good knowledge about trading.
Expert – Good emotional & trade management skills.
In these 4 stages, most people get stuck in intermediate phase. Why they get stuck there? How to cross that phase?
This intermediate phase is important as it decides whether a person will become a consistent trader or not. The longer a person stays in this phase, the chances of him becoming a profitable trader reduces. Why ? Because the person will be repeating the same mistakes again & again creating it as a habit strengthening the neural pathways in brain and make it as a habit.
People who do revenge trading, impulsive trading, over trading for many years enter in to this category. Can you avoid it? No. Every trader undergoes this phase. And in this phase only he learns the way to become a consistent trader.
Do you have self destructive bad trading habits?
What factors decide the duration of the intermediate phase?
Exercise : Note down your self destructing trading habits. Review your trades to know it.
(To be continued next week...)
Price is what you pay, but value is what you getWarren Buffett is the most successful stock investor in the history of the world. Of course, which we know now. "The Oracle of Omaha" - that's what fans of his "magical instinct" call Buffett. But is that the point?
As an 11-year-old child, little Warren was inspired by the possibilities of the stock market and invited his sister to participate in his first investment. These were preferred shares of Cities Service. The sister agreed to take the risk and Warren bought 3 shares at $38.25. But then, the wave of enthusiasm turned to disappointment and guilt - the shares fell to $27. Buffett's first investment "enterprise" lost 29% of the amount of investments that were borrowed. We can only imagine how the young investor felt at that moment, but I think this feeling is familiar to many: positive expectations clashed with the harsh reality of the stock market. Warren didn't sell shares. But when the price for them reached $40, he did it instantly. Apparently, considering this whole undertaking a mistake. The income was 4.6%, the sister received her money back. Everything worked out. Surprisingly, Cities Service's share price rose to $202 a few days later. Or +428%, Warren!
The entire subsequent history of Warren Buffett confirms that he drew the right conclusions from the experience of his childhood. He realized that the price on the stock exchange may not reflect the value of the company itself. Buffett began to study accounting, the principles of fundamental analysis of enterprises, the ideas of Benjamin Graham. This allowed him to develop an approach that consisted in determining the real value of the company, different from the one that we see on the stock exchange.
"Price is what you pay, but value is what you get".
From myself I will add: and if the value is higher than the price - such an investment is considered reasonable.
In the chart above, the price history of Buffett's main holding company, Berkshire Hathaway. As well as the S&P500 index. As you can see, his company "overtakes" the index, which means it shows much better performance than the average value of 500 US companies.
Perhaps, in addition to deep analysis of the companies' business, Buffett's unique investor instinct helps, I don't know. But the fact that he is a real Wizard of our time is an indisputable fact for me.
Black Friday giveaway - Win a Pro, Pro+, and a Premium plan!Hey everyone! 👋
As you may know, we are having our Black Friday sale in the latter half of this month. So, to celebrate this, we are giving away a Pro, a Pro+, and a Premium plan to you, our community of traders and investors.
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When you receive our next newsletter, follow the instructions and you will be entered for a chance to win. We look forward to seeing you. Oh, and please feel free to send us any feedback about our newsletter. We especially want to hear if you enjoy it or if there’s anything you would like to see added!
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How to find High Probability trades? Hi all, hope you guys are doing well. It’s been a long time since I last posted. Apologies for that. 🙏
In this post, we are going to see how we can combine different indicators/concepts to create confluence zones and find high-probability trades.
Introduction
A trade that has a greater chance of success than a regular trade is called a high-probability trade. Obviously, it's our assumption that some trades have higher chances of success as compared to others because they have more supporting factors. Nevertheless, a high probability trade can also result in a loss.
How to find high-probability trades?
There are a few things that you can observe to find a confluence of various important factors such as a support/resistance level, demand/supply zone, Fibonacci level, moving averages, volume, RSI, etc.
Depending on your knowledge and trading style, the confluence zone can be derived using a combination of various different concepts or indicators. In this post, I am going to share the factors that I look at for finding good trades.
How to find confluence zones?
In order to find the confluence zones, you need to understand the concepts and the indicators, then combine them together to create the whole picture. It's like building a jigsaw puzzle - first, you need to identify the individual pieces, and then you need to put them together.
Let’s dive into all of these concepts one by one.
1. Market structure
Market structure is simply a basic form of understanding how the markets move . The price action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend.
I have covered market structure in various different threads that you can read here:
2. Consolidation before Breakout
If a stock consolidates before giving a breakout, there are higher chances that it will be a true breakout. This is because all the residual supply gets absorbed at the resistance zone and most of the pending demand orders get filled.
Ideally, once a stock goes into consolidation, one of the two processes occurs:
Accumulation
Distribution
In layman’s terms,
- If demand is more aggressive than supply, then the price rallies, which confirms accumulation.
- Similarly, if the supply is more aggressive than the demand, then the price falls down, which confirms distribution.
If you are struggling with identifying the breakouts, be sure to read this post.
3. Support-Resistance levels
S/R levels are critical parts of trend analysis because they are used to highlight important zones. The fact that these levels flip roles between support and resistance can be used to determine the range of a market, trade reversals, bounces, or breakouts. These levels exist due to the influx of buyers and sellers at key junctures.
Flip zone acting as resistance:
Flip zone acting as support:
If you are looking for an in-depth tutorial on support and resistance, please check out my old guide here:
4. Supply-Demand zones
S/D demand zones are one of the most important things that I look at while charting. The stronger the S/D zone, the higher the chances of a reaction. Always look for these zones in the direction of the major trend.
5. Location of 200MA or 200EMA
Always observe the position of 200MA/EMA with respect to price. Once the price interacts with the moving average, study the reaction. If you are looking for a long trade, then look for a positive reaction as the price reacts with the moving average.
6. Overlap with a Fibonacci level
A lot of times, the price will come back to a Fibonacci level. You need to observe the price behaviour near these levels.
If you are not familiar with the Fibonacci tool, please check my old guide on Fibonacci retracement and extension.
7. Candlestick pattern and the size of the candles
The candle spread plays an important role in determining the strength and mood of the underlying trend. In layman's terms, big-bodied candles indicate strength and small-bodied candles act as noise.
In any case, the candlestick pattern and candle spread should only be viewed at an important level. The context plays a crucial role.
8. Chart patterns
This is pretty self-explanatory. If you trade patterns, you can combine them with other factors to strengthen your analysis.
9. Volume expansion
Ideally, at the time of the breakout, the volumes should rise . The volume can be deceiving and we need to see orderflow for a clear picture. Obviously, the majority of us are not looking at the orderflow and hence the volumes can be deceiving. But, for a normal trader, the simple volume indicator is more than enough.
So, these are mainly all of the factors that I look at while analyzing the charts. Please note that the usage of the concepts will vary with charts. Sometimes only 3-4 factors may be at play and the other times, 6-7.
High Probability trade checklist:
1. Market structure
2. Consolidation before the Breakout
3. Support-Resistance levels
4. Supply-Demand zones
5. Location of 200MA or 200EMA
6. Overlap with a Fibonacci level
7. Candlestick pattern and the size of candles
8. Chart pattern
9. Volume expansion
In the example above, you can notice the following things:
1. The market structure was bullish before the breakout, which was evident from the formation of higher highs and higher lows. Don't confuse the internal structure (Low time frame structure) with the external structure (High time frame structure).
2. The price was consolidating in the rectangle/parallel channel for a good amount of time.
3. When the price reached the previous demand zone, the selling pressure started to decrease and the buyers started to step in.
4. When the price interacted with 200MA/EMA, there was a strong reaction to the upside. This means that the buyers want to take the price higher.
6. The buying interest can be seen by an increase in the volume in the last few sessions before the breakout. The volume can be deceiving and we need to see orderflow for a clear picture. But in general, you do not need to complicate this, just use volumes in conjunction with other factors.
7. We always look for some reversal or indecision candlesticks in the confluence zone. In the chart above, at the point of interaction with the moving average and the demand zone, we can see the formation of exhaustion candles.
Again, we need to look at these patterns only at specific important levels (like support or resistance levels) and disregard the formations in between the levels.
8. When the price broke above the previous major resistance with a massive bullish candle, there was a heavy volume expansion.
More examples:
You can read and revise this post until you understand all the concepts.
Thanks for reading. I hope you found this helpful! 😊
Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
Community Manager (India), TradingView
How to use the Multi-layout feature?If you track several markets or if you need to track multiple symbols simultaneously, the multi-layout feature is the way to go. It enables you to track different markets or the same symbol simultaneously on different time frames. This particularly comes in handy if you trade indices and need to track the constituents to observe their price behaviour.
Example : If you trade Bank Nifty index futures or options, you can track the top constituents of the index. This will help you in assessing which constituents are pulling up or dragging the index and how the overall move can unfold.
This short visual guide will help you in accessing and customizing the multi-layout feature. Let’s get started!
1. Open the homepage of TradingView, go to “ Products ” and then open your chart layout.
2. Once you are on the chart page, you’ll see a small square icon at the top-right hand side of the screen. This is the “ Layout ” option. Click on it to view different available options.
3. As soon as you click on it, you’ll be greeted with a small window showing various combinations of horizontal and vertical layouts .
4. You can select the desired layout as per your needs. The vertical layouts look great on monitors in landscape mode, whereas the horizontal layouts go with portrait mode.
Please note that the number of charts per tab varies with the subscription type. The limit is as follows:
Free plan- 1 chart (Can’t use the multi-chart feature)
Pro plan - 2 charts
Pro+ plan - 4 charts
Premium plan - 8 charts
If you need to upgrade your account, be sure to check our Black Friday sale . You can get up to 60% off on subscriptions.
5. As we mentioned earlier, the multi-layout feature enables you to track several markets simultaneously or the same symbol on different time frames.
Example: Tracking different markets
Example: Tracking the same symbol on different time-frames
Observing the same symbol on multiple time frames provide easy insight into the multi-time frame analysis.
6. There are also a few synchronization options. You can synchronize the symbol, interval, time, crosshair, and date range between the charts. You can just select the sync option by just clicking on it.
Thanks for reading! Hope this was helpful!
See you all next week. 🙂
– Team TradingView
Feel free to check us out on Twitter and Instagram for more awesome content! 💘
How to compare relative performance between stocks and indices ?You can compare the relative performance by using the compare option on charts. The compare function tool is used to compare the market movements of two or more different symbols simultaneously. Popular use for a comparison chart is comparing two companies within the same sector.
Click on the Compare or Add symbol button (displayed as plus sign) on the toolbar along the top of the chart, search and add the indices/stock which you would like to compare. You will see a representation of the percentage comparison from the beginning price point to the current price.
To delete the comparison line right-click on it and click on ‘Remove’.
This example is comparison chart of Nifty Bank and Nifty PSU Bank.
After 12 years i.e. 1st November, 2010 - 7th November, 2022:
Nifty Bank - 214% Positive
Nifty PSU Bank - 31% Negative
Nifty PSU Bank has given breakout.
I hope this little information on comparing indices/stocks is useful. Please feel free to write any additional information in the comments section below.
Thanks and happy learning/trading.
Disclaimer: This is for demonstration and educational purpose only. This is not buying or selling recommendations. I am not SEBI registered. Please consult your financial advisor before taking any trade.
10 things to remember about bear markets, volatility, and panicTrading & investing is not easy. If it were, everyone would be rich.
One of the most difficult moments for all traders, and especially investors, is when markets are abnormally bearish, trending downward or in a direction that goes against their positions. Adding to that difficulty is when volatility is rising and when uncertainty is high. These events have occurred throughout market history and should be expected. Every trader or investor should remember a simple truth: markets will go against you at some point. Be prepared.
Learning to trade or invest in bearish and volatile markets requires great skill, experience, and composure. The last 12 months have demonstrated that. Stocks, bonds, forex, crypto, and futures have seen heightened volatility over the last 12 months. So what should we do? What now?
Let's revisit the basics - the skills, traits, and mindset that are required to survive these moments.
1. Plan ahead 🗺
Plan your trade, trade your plan. Every trade, and every investment, should have an underlying plan. Write out the basic questions before you buy or sell. For example, what is your desired entry price? What is your desired exit price? What is your stop loss? How much money are you risking? Why are you making this trade or investment in the first place? In times of volatility, these questions matter more than ever. Get back to the basics.
2. Don't rush 🧘♂️
Volatility, and especially market panic, cause people to make quick reactions. The pressure, the fast price action, often forces people to act without a moment to revisit their original plan. Don't do this! Take your time. Stay composed and deal with the hand you have been dealt.
3. Be patient with entries 🎯
Many traders & investors speak of buying dips, but this phrase does explain the steps required. You don't buy dips without a plan. You plan out your strategy, you wait for the perfect entry, and you let the market come to you. When the market is in a downtrend, and volatility is high, it is paramount that you remain patient, waiting for the perfect entry. Use limit orders wisely.
4. Know your timeframe ⏰
Are you trading for one day? One month? Or 5 years? These basic questions will remind you of what you're trying to accomplish and how rushed or patient you should really be. They will also remind you about the chart you should be looking at, whether you should be zoomed in to a 30-minute chart or zoomed out to a weekly chart, showing years of price history.
5. Have an exit strategy 🚨
An exit strategy means that no matter what happens, you know where your stop loss is and you know where your profit target is. No matter what happens, up or down or sideways, you have an exit plan. Do not leave any entry or exit up to chance. Create your exit strategy before you place the trade and follow it.
6. Tighten position size 💪
Added volatility and uncertainty need to be factored into your game plan before it begins in the first place. However, many new investors and traders forget to do this. If that's you, it's time to adjust your strategy, and your plan, for larger trading ranges, and volatility. The year-long trends that defined a previous market are now less valid.
7. Zoom out for historical context 🔎
Zoom out on your charts. Then keep zooming out. And now zoom out some more. Circle the latest candle, line, or price movement and let it serve as a reminder about where the price is today vs. where it came from. There's a saying: when in doubt, zoom out. Do not get lost in the moment, looking only at the day or week, but instead go research the entire history of price. Learn about what has happened in the past.
8. Cash is a position 💸
Want to dollar cost average into a trade? Want to buy more? Want to trade more? You need cash to do that. There is comfort in being able to participate in the volatility whenever you want. Cash is a position and guarantees this.
9. Avoid panic, FUD, and FOMO 😳
When emotions are running high, some of the biggest psychological mistakes can occur. FUD stands for fear, uncertainty, and doom. FOMO stands for fear of missing out. These are two common emotions in crashing markets. On one hand, everyone thinks the end is near and then on the other hand every little up move is the next bull run. Do not let these emotions take you.
10. Take a break 😀
Sometimes it helps to step away. Log out, close your apps, get outside and get some exercise. Come back to the markets when you're ready. Your mind will also be well rested now.
We hope you enjoyed this post and we hope it helps you as you navigate the markets.
Please feel free to write any additional tips or pieces of advice in the comments section below!
See you all next week. 🙂
– Team TradingView
Do check us out on Instagram and YouTube for more awesome content! 💘
Rounding Top patternHey everyone! 👋
Last week, we wrote about the "Rounding bottom" pattern. If you missed last week’s post, you can catch up here:
Today we are going to cover the "Rounding top" pattern along with a few examples.
Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading!
The post will shed some light on the following topics:
➡ Basics and identification of the pattern
➡ Components
➡ Important aspects
What is a Rounding top pattern?
• A rounding bottom is a bearish reversal pattern that resembles the shape of the inverted "U".
• Rounding top pattern occur at the end of long uptrends and indicate a potential reversal.
• The pattern is also referred to as an inverted saucer due to its resemblance to an inverted saucer.
• Although, the volume and price move in sync but in practice, this can vary widely.
• When the price moves down from the neckline, it indicates weakness and suggests that the stock may begin a new downtrend.
Components of a Cup and Handle pattern:
A rounding bottom pattern can be divided into three main parts.
• Advance
• Formation of the base
• Decline
Important aspects:
1. Prior Trend: Since it is a bearish reversal pattern, the prior trend must be an uptrend. The top of a rounding bottom should ideally mark a new high or reaction high. The stock may trade sideways or flat for a long duration before the formation of the pattern.
2. Advance: The advance that leads to the formation of the high, can take a variety of forms. Sometimes, the up move has many whipsaws while other times, the stock may just trade flat.
3. High: In general, the pattern resembles an inverted "U" shaped top. However, it can also resemble an inverted "V" or an "M," but the high should not be too sharp. In addition to this, there is always a possibility of a new high due to a buying climax.
4. Decline: In general, the formation of the right half of the pattern should take about the same amount of time as the left half. This means that the down move of the highs should take about the same time as the up move. Moreover, the decline shouldn't be too sharp, or else there is a possibility of a bear trap.
5. Breakdown: The pattern is confirmed once the price breaks and sustains below the neckline. The price may return to the neckline to test for the supply before continuing downwards.
6. Volume: In general, the volume levels should be
- High during the up move
- Low during the formation of the base
- Rising during the down move
However, these are only guidelines and should not necessarily be taken at face value.
7. Target: Using the measurement objective, the target comes out to be equal to the depth of the base. It can be measured by calculating the distance between the bottom of the base and the neckline.
8. Stop-loss: Ideally, the stop loss is placed at the highest point of the base. But if the price oscillated up and down a number of times near the neckline, the stop-loss can also be placed above the most recent swing high.
Exhibit: Rounding top pattern with a failed breakout
Thanks for reading! As we mentioned before, this isn't trading advice, but rather information about a tool that many traders use. Hope this was helpful!
See you all next week. 🙂
– Team TradingView
Feel free to check us out on Instagram and YouTube for more awesome content! 💘
Not every swing high is a Fake Breakout !Good morning traders.
If you have entered long at the high of the green candle as shown in the chart you would have thrown out of the market by taking your SL and kept you thinking Oh! It must be a Fake Breakout.
-->We all know that market structure is combination of waves.
-->These waves will follow Primary trend, Secondary trend and all the minor trends on the way.
-->In the Bullish momentum - Price will form Higher highs and higher lows.
-->In the Bearish momentum price will form Lower highs and lower lows.
-->If we observe the recent path the market is following, it has formed higher highs and higher lows.(Bullish If i have to say)
-->Before Friday the recent swing low the market has formed at 17637 level.
About the fake breakout - The price level it broke has hardly respected once. If the price has respected that level 2-3 times and then if it breaks it and comes back into range then we may call it a fake breakout or if it has broken the previous swing low then we can consider it as a fake breakout.
Since none of the above mentioned has happened its just be a another swing high and market is still in up move.
Above concept is done.
Now on Friday market has formed a new swing high 17830 level and major swing low is 17637 levels. If price can go past 17835 on Monday then swing low will be shifted to 17723 levels.
Then why I post shorting trades in the Ideas?
I try to plan my trades at the extremes (at swing lows and swing highs).
There is no point in going long at a swing high unless our stop loss is huge.
That is why in a bull structure I plan to buy at swing lows or I plan to short at swing highs both of them will have small SL and High rewards. Do you agree with me in this aspect?
If we observe our recent market openings, it has opened with gap ups. So I don't want to risk huge SL for limited intraday up move that's why I plan contra trades.
On Monday I will be cautions because SGX Nifty is showing 18000 + and it will make it as a good supply zone.
I will observe the price action in smaller time frames and plan my trade.
The future market direction will be decided at these levels.
--> What we need to observe?
--> Whether the market is accumulating at this level or Distributing at this level.
I have written so much in this ,I will write more based on the response I get from this. I know few of these will be confusing, do let me know If you want to know about particular concepts then I will have Idea about what I should be writing for.
*SECURING THE TRADE AND PROTECTING THE CAPITAL SHOULD BE YOUR FIRST PRIORITY.
*NOT A SUGGESTION VIEWS ARE FOR EDUCATIONAL PURPOSES.
If you think video analysis will be good for better understanding & If you want me to do video analysis pls give a boost. Your boost and follow is my MOTIVATION.
Technical Market Indicatorslet us understand what the different types of
TECHNICAL MARKET INDICATORS in brief
😎Trend indicators are stronger than any other technical market indicator:-
A market trend is a tendency of a stock market to move in a particular direction over time
These trends are classified as secular trends for long time frames, primary trends for medium time frames, and secondary trends
lasting short times
Trend indicators are always lagging indicators as a trend has to establish first, before it can be measured
😎 Breadth indicators are designed to confirm a price action or an existing trend
Breadth indicators are measuring the overall strength of a price action or an existing trend by analyzing the proportion of the
overall stocks or volume that are participating in the market’s up or down move
Some measures of market breadth involve the volume of rising stocks compared to the volume of falling stocks
😎 Measure the investing behavior of certain trader groups
Contrarian market indicators attempt to measure the overall bullish or bearish attitude towards the market among traders and
investors (market sentiment) or tracking down the investing behavior of smart money and dumb money
Those indicators lead and/or confirm price actions
Somehow they are a mixture between trend- and breadth indicators and oscillators
😎 Oscillators are leading indicators as they lead a price move
Oscillators are leading indicators as they lead a price move
They move above and below a centerline (center oscillators) or are banded (banded oscillators) between two extreme values
The banded oscillators are designed for discovering shortterm overbought or oversold conditions. As the value of the
oscillator approaches the upper extreme band the stock market is deemed to be overbought, and as it approaches the lower
extreme it is deemed to be oversold
ALL THESE INDICATORS HAVE THEIR OWN ADVANTAGES AND COMPLICACY
I have tried to share details in bried
hope you enjoyed reading it
disclaimer - shared as read
SMART MONEY SECREATS REVEALED OUT
STOP HUNTING is a strategy that force some market participant out of their position by driving the price of an asset to level where many individuals have to set their stoolies order.market makers triggering stop losses generally leads to high volatility and provide unique opportunity for investors who seek to trade in this environment.
Fore is zero sum game if SMART MONEY(banks) wants to a buy currency pair they will need sellers in the market,the existing existing facility to place these position in the market is called LIQUIDITY.
the liquidity is defined as stop loss, where the stop losses exist is where liquidity also exist.
Smart money needs to activate the stop losses of existing orders in the market so that they can place their position.
Traders Queries - October 2022Query 1 I have bought nifty 17750 CE 27th October @ 158 and when market fall, I again bought it @ 48. Can I hold till the month end?
Query 2 : I shorted nifty @ 17200, but market is moving up. Can I carry forward my position as I expect market to fall from 18,000.
Answer for query 1 : Option value erode each and every day. Even though the market went up, the predicted direction is right, because of decay it didn’t give profit as 17750 CE 27th October is trading at 40 now.
Lesson : Option buying gives profit when the movement has momentum in it. During sideways market, option value wont gain, so we have to trade accordingly. We have to think about time decay when we trade in options.
Answer for query 2 : Every trade should have stop and the amount of risk you can take. When we did not respect stop and get out of the trade when
the market is moving in opposite direction of the trade, the loss increases and the capital has the risk of getting wiped out. This happens when we have a biased view about the market. Here the bias is market will fall and we look for the things which support it, which makes us unable to accept
the real facts like 18000 is so far away from 17200 and its not worth taking the risk.
Lesson : Bias formation affects our trade. These are different types of bias, but when we are concentrating on the facts, then it will become visible that our views are biased and we can rectify it.
Rounding Bottom patternHey everyone! 👋
Today we are going to share a quick write-up about the “Rounding bottom” formation, along with a few examples that may help you solidify your understanding of this chart pattern.
Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading!
The post will shed some light on the following topics:
➡ Basics and identification of the pattern
➡ Components
➡ Important aspects
What is a Rounding bottom pattern?
• A rounding bottom is a bullish reversal pattern that resembles the shape of the "U".
• Rounding bottom pattern occur at the end of long downtrends and indicate a potential reversal.
• The pattern is also referred to as a saucer bottom due to its resemblance to a saucer.
• Although, the volume and price move in sync but in practice, this can vary widely.
• When the price moves above the neckline, it indicates strength and suggests that the stock may begin a new uptrend.
Components of a Cup and Handle pattern:
A rounding bottom pattern can be divided into three main parts.
• Decline
• Formation of the base
• Advance
Important aspects:
1. Prior Trend: Since it is a bullish reversal pattern, the prior trend must be a downtrend. The low of a rounding bottom should ideally mark a new low or reaction low. The stock may trade sideways or flat for a long duration before the formation of the pattern.
2. Decline: The sell-off or decline that leads to the formation of the low, can take a variety of forms. Sometimes, the down move has many whipsaws while other times, the stock may just trade flat.
3. Low: In general, the pattern resembles a "U" shaped bottom. However, it can also resemble a "V" or a "W," but the low should not be too sharp. In addition to this, there is always a possibility of a new low due to a selling climax.
4. Advance: In general, the formation of the right half of the pattern should take about the same amount of time as the left half. This means that the up move off the lows should take about the same time as the down move. Moreover, the advance shouldn't be too sharp, or else there is a possibility of breakout failure.
5. Breakout: The pattern is confirmed once the price breaks and sustains above the neckline. The price may return to the neckline to test for the demand before continuing upwards.
6. Volume: In general, the volume levels should be
➡ High during the down move
➡ Low during the formation of the base
➡ Rising during the up move
However, these are only guidelines and should not necessarily be taken at face value.
7. Target: Using the measurement objective, the target comes out to be equal to the depth of the base. It can be measured by calculating the distance between the bottom of the base and the neckline.
8. Stop-loss: Ideally, the stop loss is placed at the lowest point of the base. But if the price oscillated up and down a number of times near the neckline, the stop-loss can also be placed below the most recent swing low.
Exhibit: Rounding bottom pattern with a failed breakout
Thanks for reading! As we mentioned before, this isn't trading advice, but rather information about a tool that many traders use. Hope this was helpful!
See you all next week. 🙂
– Team TradingView
Feel free to check us out on Instagram and YouTube for more awesome content! 💘
CHOOSING OPTIONS STRIKEChoosing wrong strike prices can lead to big losses even when our analysis is right. It's due to Theta decay.
So Lets understand some basics of options strike price.
There are three types of strike prices based on their moneyness.
1)ATM (At the Money)
2)OTM (Out of the Money)
3)ITM (In the Money)
FOR CALL OPTIONS :
Lets assume Stock ABC is trading at 150 (spot price). Then,
Spot price = 150
ATM Strike = 150
Any strike above spot price is OTM for call option.
Ex : 160 ,170,180 etc.,
Any strike below spot price is ITM for call option.
Ex : 140, 130, 120 etc.,
FOR PUT OPTIONS :
Stock ABC is trading at 150 (spot price).
Spot price = 150
ATM Strike = 150
Any strike above spot price is ITM for put option.
Ex : 160 ,170,180 etc.,
Any strike below spot price is OTM for put option.
Ex : 140, 130, 120 etc.,
HOW TO CHOOSE THE STRIKE AMONG THE ABOVE THREE MONEYNESS
1)Follow a simple rule, Buy a strike price which is closer to the spot price. "OTM STRIKES ARE BIG NO" .
2) Remember! when we are buying an option, the stock / index needs to move up / down with a good momentum. So that our option will gain some value & we will be in profit.
So it doesn't make sense to buy a OTM call / put. Because if a strike price is far away from spot price, it won't give us much movement due to time decay.
I have even shared my option strike rules as follow.
Friday, Monday & Tuesday = ATM strikes
Wednesday & Thursday = ITM strikes
This is how I used to pick strikes for intraday. The reason is simple because, if we are closer to the expiry (Thursday) the effect of theta decay is very high. Due to which our premiums will not move much even if the stock / index has moved pretty well. By following these rules, our chances of losing money will drop drastically.
Happy Learning & Earning :)
- DivyaaPugal
Bullish and Bearish Harami candles concept Educational Post
Bullish Harami
Bullish Harami is candle stick pattern which shows counter attack by bull on bear entering the support zone.
Significance of candle stick pattern is at support level of charts.
Bullish(Green) candle should gap up from close of bearish(Red) candle and close should be above the median of bearish(red) candle with volume.
Bearish Harami
Bearish Harami is candle stick pattern which shows counter attack by Bear on bulls entering the resistance zone.
Significance of candle stick pattern is at resistance level of charts.
Bearish(red) candle should gap down from close of bullish(green) candle and close should be below the median of bull(green) candle with volume.
If you like the post,Please follow,like and share it.
Happy Trading!!!
