Get started

Beyond Technical Analysis

How Resistance Turns into A Support?Hi You must have often heard that a resistance once taken out could act as a potential support level. Let us see through this chart how this happens. Firstly there is a strong resistance zone on the left bottom of the chart, which is also 2019 high. Price took a knee jerk reaction from that level. Many traders would have bought near the highs in a bull market but now they are sitting in a loss. They would be thinking that as soon as the price comes back to their average price or cost, they would exit/sell. 1. Finally after the sharp bear phase, price rallies back to the 2019 highs. Now the above traders/investors would start selling at cost. Many new traders who think that price is at resistance would also start shorting (selling). Those who bought at lower prices would also try to book profits. So there is a flux of sell orders at that level. But wait! is that true? 2. Selling is there but buy orders are just overwhelming. Buyers are absorbing all the supply and managed to hold the reaction of selling. Or you can say that seller were not strong enough or buyers were stronger. If sellers are not strong and buyers are strong then what would happen? Tell me..... Yes you are right, the price would rally higher. And it did. 3. Now all those seller who acted at stage 1 would be shocked and want to book their loss at a better lower price. There are others who still think that this stock is weak and the BO is fake, so they start shorting. Price pulls back to the 2019 highs. 4. Now stage 1 sellers have a better opportunity to cover their loss, so they start buying. Left out buyers also start buying due to better bargain. Pullback buyers enter the market. This large flux of buying orders pushes the price higher and the rally resumes. 5. In this way, the prior resistance turns out to be a support for the stock. This same psychology repeats at 6&7 where price holds previous resistance as a support. Imho, Its always beneficial to see any market or chart from psychological point of view rather than merely patterns and signals. The same market psychology is true for how a support once broken, turns into a resistance. Thanks for reading. I hope it would be useful. Regards
NSE:TCSEducation
by Bravetotrade
6
How to add alerts on TradingView?Hey everyone! 👋 Alerts are a key trading tool that every trader should know how to use. Check out this quick guide for more information and some secret tips! What are alerts? TradingView alerts are immediate notifications you can set for yourself when the market meets the custom criteria you create. For example, "Alert me if Nifty crosses above 16000". All users can get visual popups, audio signals, email alerts, email-to-SMS alerts, and also PUSH notifications that are sent to their phones. Pro, Pro+, and Premium users can also receive webhook notifications when an alert is triggered. You can also create alerts on prices, indicators, strategies, and/or drawing tools. There are 2 ways to create alerts: 1. Using the Right-click 2. Using the vertical scale Method 1: This is a pretty straightforward way. Go to the price level at which you want to add the alert, then right-click and select "Add alert". Voila! You are done. Method 2: The second way to add alerts is by using the vertical scale (Price scale). If you hover over the vertical scale, you will see a “+” sign. On clicking this sign, you will be greeted with the “Add alert” option. Just click on it and the alert will be set at the selected price level. You can also customise your alerts by using alert settings. Indicator Alerts You can also set indicator-based alerts with predefined conditions like "crossing up/down", "greater/lesser than", and "entering/exiting channel". You can also create your custom trigger settings by using the alertcondition and alert functions. Tip : The alerts can be accessed using the “Alerts” tab which is the second option from the top, on the right toolbar. 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! 💘
Editors' picks
AEducation
by TradingView
12
Identifying traps: Alarming signsThose 2 green bars were of 6 & 8% resp. With no follow through. Price is sideways with major pick in volume, shows strong supply is incoming n those 2 green bars were created to lure Public. There can be a pullback, but it wont sustain. Increasing of volatility is a sign of big move, since 5%+ moves have become normal since mid May 2022. Even a 6% move on 16 May lacks follow through. Stock is nearing a structural breakdown, trading just above congestion zone created just before a big move. Interestingly there is high volume activity just above the congestion zone currently. This can be interpreted as market makers are offloading their stock. Any bounce here on wards will se a sell off. On Lower Time frames There was a failed breakout with high volumes, just above previous day. Again the longs were trapped. To Conclude we may see a sharp decline in coming days, any bounce should be used as exit opportunity.
NSE:PELEducation
by varadtambolkar
Why It Is Hard To Hold A Winning Position. ?Why It is hard to Hold a winning position. ? ---------------------------------------- Suppose You took a trade ,bought 100 quantity at price 100 , with a SL : 80, and Potential target of 120, Now what happens it goes up to 105 (you think your analysis is good let us wait) Then it come back to 100 went further down till 90 (you thinks it is ok we have to give it room) Then it went up above your buying level till 115 (now your target is 120 you are just 5 points away, what will come into your mind?) Then suddenly sharp selling starts and you got your SL triggered. More or less the PnL whipsaw, take you to the moon and within seconds, it drop you down. The PnL whipsaw creates dynamic changing emotions into your mind. Am I correct or not till now, feel free to comment. ? --------------------------------------------- Let us more about some pre-set emotions which comes out and affect our decision making with open position. 1) Fear of Losing the open position’s profit : See everybody want to win nobody want to see himself of herself as a Loser in the mirror , when you take a trade you always think that it is going to give you profit (subconsciously), with such a biased mind the open position PnL affect your decision making. You get so much attached with the running profit that you start thinking like that it the profit you have already booked and feeling that it is your released profit, now you are “not willing to let it go” because you now attached to it emotionally (psychologically). This type of fear arises from our belief system and past experience developed over previous trades. The social culture, family atmosphere also can be the reasons. “If You think you are a risk taker than you must thanks God , because everybody do not have such brave heart.” Advice: “Let it go”, the open position’s PnL, is not yours, it is the released one that counts. Believe in your system and let the target hit or trailing SL get triggered (SL according to your strategy). 2) Past Experience (Fear intensifies when have a very bad experience earlier) Students approaching me for learning trading psychology ask me why you ask us about our past experience and track sheet, they do not want to recall, but their past experience and the track record tells their complete story , it tells everything what is the problem with their trading , what need to correct immediately what are the strong weak part of their psychology. But why: Because past experience shapes our psychology. If you have witnessed a series of trade where your target is missed by few ticks and you have to book SL. Then you start thinking about your exit style, you think is there any improvement needed. At this point of time you again shift from this strategy to that strategy. If you are trading from a while then you can understand the gains we make are not smooth sometimes great sometimes they are worse. If you think there is a holy grail strategy you will spent whole life searching it, but still remain empty hand. Advice: You have to realise that having continuous losses in a row can happen frequently as, you cannot avoid losing streak, even the professional traders have their losing streaks going for 2 , 3 weeks. You came here not to trade 1 week , 1 month or 1 year , you must have a long term view. 3) Lack Of Clarity : If you are among those traders who always have a very sceptic view about trading, have knowledge and experience but , do not see it as a sustainable business, thinking that you cannot rely on trading income. You will develop a tendency to book early. Because holding a winning position requires a courage which comes from clarity. I met a research analyst managing his client’s portfolio giving trading and investing recommendations to his clients on regular basis for more than 5 years. I asked him why you selling your valuable advice when you can profit from it. You know what he said to me, it is shocking for me he said , Nobody make money in trading. He do not believe in trading business even though having his bread and butter by selling his advice. It is worst how you can sell your recommendations when you personally feel that nobody can make money. Is it not contradictory? Advice: If you do not have clarity about your trading system, you cannot trade confidently and this one thing alone can derail you from your trading plan. So spent time reading, listening to various successful trader, know their story their style, the more you read listen the more you will get the knowledge and clarity. 4) Complacent with the Current profit : I think this is the worst problem happening with you because if you are very complacent you will end up booking very small and losing big ultimately your equity curve will go down slowly. This happen to novice traders who want to make some extra income, they see that open position profit is enough for their one day or two day expenses they close their positions immediately. Note: Have you seen people doing a mediocre job or their father’s small business even they have the potential for a bigger goals. Booking small profit frequently makes us convinced that what we are doing is great because we see a streak of winning trades. Reason: Simple reason of it is than, we tend to apply our day to day life logics here, we are unable to see the potential and avoid systematic approach. Advice: Your strategy is developed according to the profit potential, risk management not for your day today expenses or complacency level. Stay goal oriented make small, short duration goals and see a series of trade at a time not stuck your mind in single trade. 5) Lack of acceptance: When you do not accept loss you will always try to avoid it this is the main reason why people sit tight will their losing position but cannot hold their wining positions. Reason : Arrogance, Confusion, less belief. Advice : You can make profit or loss on a particular trade depends on market situations. Recall this before creating every new position. Just follow you system.
Editors' picks
NSE:BANKNIFTYEducation
by TRADEWITHFUN247
26
Which type you belong.?The best way to find the type of trader you are is to see the capital curve,(or equity curve) over time into your trading account. Over time it may increase or decrease depending upon your performance but the way it is increasing and decreasing will give you an idea of where you are going, towards a professional trading or still in the 95% of crowd, who overall lose money. ------------------------------------------------ Type - 1 Big Loss Small Profit You will not believe me I observed ledgers of many traders where I found that this category has the majority. Some lose there entire capital in just 20 to 30 trades their losing trades are so capital disruptive that they soon get out of the game. The reason are many but one common reason I found in such traders that , they do not accept that they are on a path of failure. They always get crazy about their accuracy ,(as if you book small profit and big loss than your accuracy will be excellent) . One more problem is their search for a HOLY GRAIL. My advice: May be this game is not for you. Try something else than trading, (Bitter advice but what can I do the reality is that this game is very hard) ----------------------------------------------- Type - 2 Big Loss Big Profit Now this category is of those traders who enjoys this game, their main reward is not monetary reward the innate thrill of this game, gives them so much pleasure that they can resist themselves. Reasons why they tend to behave like that are many but I think, they play the main role for prices to rally fast they make market uncertain and high volatile. Ultimately they lose money but they are not concerned. My advice: May be you , do not need any advice , You need Introspection ----------------------------------------------- Type – 3 Small Loss Small Profit This type is of that trader who had a bad experience in the market and now they want to improve their trading they read books follow gurus . They always are in a search for holy grail . Though they ultimately lose money but I like this type of trader because they at least accept loses. They at least cut down the main hurdle. They survive long. Advice: You accept small losses but why exiting early manage your emotions follow plane believe in plane, that’s it. Just allow trade to run in profit. ---------------------------------------------- Type – 4 Small Loss Big Profit This type of traders are the pro ones their entry is difficult but exit is marvelous , rest of the traders shuffle a lot while exiting from a trade but this trader they are genius in it. They make plane, execute them, flexible with plane, accept mistakes … etc Advice: Sometime you may feel boring as the trader life is not a social life , after seeing all whipsaws in your trading journey you may feel tired but always remember there is yet many milestone to achieve, this is just a beginning. ---------------------------------------- The trading is a negative sum game , here one's profit is a loss of other. This is like battle where traders fight with their conflicting opinions at the same time simultaneously. So keep your fighting spirit up .
Editors' picks
NSE:NIFTYEducation
by TRADEWITHFUN247
59
Type: 2 Fear - Fear of Losing (Most Common)Type :2 Fear of losing If you’re going to be a trader, you’re going to lose money at some point, and in case you are still in the phase of trying to avoid all losing trades and searching for a “Holy-grail” trading system with a 75% strike rate, you should forget about all that right now. As cliche as it may sound, losing really is part of winning as a trader; the two are inseparable. If you don’t learn how to lose properly you will never make consistent money as a trader. Reality check… ------------------------- ALL pro traders lose money, and they understand that it’s just part of the “game”. Sadly, for many traders, every trade is accompanied by a tremendous FEAR of losing money and sometimes intense emotional attachment. Some of the key reasons why traders become fearful about losing their money include the following: 1. They don’t understand that mathematically, over a series of trades, a trader can lose a majority of their trades and still be widely profitable, simple math proves this. 2. They are simply fearful of losing money in general. 3. They are trading positions that are too big (risking more than they really should be), causing fear, sleepless nights and huge emotional swings. This is some pretty powerful stuff so make sure you actually read the whole article and re-read it if you have to. What you learn here should give you the power to eliminate your fear of losing money in the markets and will help you develop into a confident and emotionally collected trader. Fear of losing money can be a good, natural emotion, but we need to transform its focus. Fear of losing money is a good emotion to have in many areas of life, if we did not have it there would be evens more chaos in the world and in the markets. Humans are protective of their acquired wealth and property, and rightly so; they worked hard for it. However, in trading, this natural energy to be defensive and emotional with money needs to be transformed and refocused into a different mental state… Instead of being fearful of losing your money when trading, embrace the control you have on each trade; a trader has complete control over the risk management of every trade via stop losses and position sizing, . These risk management tools are your way of being in control of your money/funds, and instead of being “fearful” about losing money, you should feel empowered and confident because you can predetermine how much you are comfortable with potentially losing BEFORE you enter a trade by using these tools. However, just using these tools to control your risk per trade is not quite enough to totally remove the fear of losing. ------------------------- Ask yourself some serious questions If you feel fear or any emotion at all when you place a trade, you need to “slap” yourself in the face and ask yourself 3 big questions (and answer honestly): 1. Do I really have the knowledge and confidence to be trading with real money in the first place? If you’re trading your hard-earned money in the markets but you don’t know what your trading edge is and you don’t have 100% confidence in your ability to analyse and trade the markets…you probably should not be trading. One of the biggest reasons traders become afraid to lose their money is because they aren’t confident in their own ability to trade! It seems silly I know, but it’s very true; many traders simply don’t have a trading strategy mastered, they don’t have a trading plan, trading journal, etc…they simply aren’t prepared to risk real money in the markets yet…thus they feel fear when they trade. 2. Am I trading a position size that’s too large for my personal risk profile / per-trade risk tolerance? If you don’t know what your per-trade risk tolerance is, then you need to figure that out first. It’s basically just the dollar amount that you feel like you are 100% comfortable with potentially losing on any trade; because you CAN lose on any trade…remember that. You have to take into account your overall financial situation and then determine how much money you should realistically and honestly have at risk in the market on any one trade…be honest with yourself here. You’ve got to think of yourself as a risk manager and as someone who is managing funds, rather than just a small-time guy trying to get lucky; your trading mindset will directly influence your trading results. 3. Do I truly understand the maths behind trading? ------------------------- When I say the “maths behind trading” I am mainly referring to risk reward and how it relates to your overall winning percentage. For example, on a series of 20 trades, you are likely to lose at least 35 to 45% of the trades, and most traders who are successful lose anywhere from 40 to 50% of the time, some even up to 60% of the time. But, through the power of risk reward you can lose more than you win and still come out very profitable. We will expand on this below. Embrace the belief that losing is OK Losing is good if you’re cutting your losses quickly and understand that by doing so you’re simply preserving capital and that your winning trades will pay for your losing trades with profit left over. This is the power of your average risk reward ratio over a series of trades coming into play; we will see this in action below… Even very profitable traders typically lose more than they win, to prove this point let’s take a look at a case study showing 14 trades with a just a 43% win rate. To be clear, that means you are losing 57% of the time and winning just 43% of the time. It can be hard to associate “losing” the majority of your trades with making money, but as I discussed in one of my recent articles, you don’t have to be right to make money trading. You can make money with poor accuracy and decent reward to risk ratio.
Editors' picks
NSE:NIFTYEducation
by TRADEWITHFUN247
5
What after a heavy Loss ?Different types of emotions, questions, doubts arises in our mind when we see our capital depleting overall , we see a big portion of our capital is gone now ,we left with very less compare to initial capital. _________________________________ Different concussions made by different traders _________________________________ 1) They loss because of manipulator , operator , promoter , fraudsters etc ... This type of thinking is obvious because there are manipulators , operators , insiders who are always at advantageous position than you ... It is just like that your army trying to fight with a king where his army is equipped with better weapons. Your chances of winning is less , obviously . Am I right or wrong.? See why I took this example because in trading profession one's loss is another's profit. It is not very different with ancient war where one king use to fight with other risking the life of his soldiers for looting wealth of opponent. There are professionals, Institutions, prop desks, Fiis ,Diis , mutual funds , different portfolio managers serving their clients. Many players playing at the same time. Now main point is do we not take trades as our chances are less ? See yes big players make money but you can too make money you need to understand your strength. Now at this point you will surprise what is retailer's strength , in front of big players . Let me list it out. 1) Less capital . You do not need very much liquidity to trade efficiently. Big player cannot trade scrip which do not have very much liquid. 2) Smooth Entry and Exit : If I say you have to enter or exit 10Lac shares of Reliance today can you execute it at a small price range no , but with a small capital it is possible. 3) We can stay away from market for long time if we do not see a clear trend. But what about big players he have to trade every market condition and they trade and bear the existence cost their. 4) You can change your trading style much to get better results but they can't do much changes . This is just like small armies comparing with big armies , small armies have better less conflict within ,Management have less difficulties in handling , Less Budget. etc... See you can blame big players for your loss but introspect within is this the only reason. ? _____________________________________ 2) They lost because they do not have big capital : I remember a quote . "A trader is never under capitalised his mind is underdeveloped " First learn to grow small account. There is no guarantee that if you have a big account you will perform good. ____________________________________ 3) There is problem with their strategy . (search for holy grail) See if you think a strategy formed with mathematical calculations can alone make you rich . I do not think this business is for you ... it is harsh but true. "" It is just like the search of god outside but it is siting inside "" Work with your trading mindset will give more results than working with strategies. ___________________________________ 4) Fear for losing money again This fear is there in every trader whether you lost money made money or just starting , but what happens when you had a big loss experience this fear starts growing bigger and bigger , your decision making get affected with this fear. You get very fearful with open position when it shown some profit you just try to book ass soon as possible. You start booking small and lose big, with this derailed trading style no progress is expected. ___________________________________ 5) You think you should join expert traders. Now at this point you are thinking constructively ,but this gives opportunity for fake trainers , tip providers , brokers running their own agenda. For them to convince you for their services is very easy. They clearly know how to convince. I do not say there are only fraudsters their are genuine guys too but their percentage and willingness to help you is very very less. "It is just like in search of peace , satisfaction, god people end up in the trap of fake babas , gurus so called god messengers." I will further explore more about the possible psychological situations after a big loss and about Loss recovery strategies in my next post. Stay tinned .....
Editors' picks
NSE:NIFTYEducation
by TRADEWITHFUN247
27
Situations which shakes you emotionally ,Why & How ? There are Four worst possible situations may happen even in a series of trades which can shake you Psychologically. ================================================== 1) After hitting your SL market straight goes in your favour --->> You know prices are not random always, the patterns, support, resistances, trend line concepts works well but for whom. ? and how ? Suppose you found a crucial support level and taken a buy position with stop loss just below the crucial support. You have placed your SL at correct place no doubt about that, but do you know such levels where most of the people may place their SL or may panic and exit their positions can be predictable. Second , If you are playing trends and created a long position , can you exactly guess the prices do not correct till your SL level .no … Third , This may conflict with first one but believe me most of the time prices are random, market do not know you exist. The logic you inculcate for the upcoming move may not valid even if the movement happen exactly the way you predicted. Now you will surely ask, is booking SL is a good Idea or not. ? Answer : Yes It is a good Idea to book SL , even if market goes in your favour after taking SL. Reason : See you cannot analyze all factors which are affecting price now. No system strategy is 100% accurate. You may see a series of trades where after booking SL prices going in your favour. You may think there is some problem with my strategy (even if you have properly back-tested it) or is there any need to change something. Believe me this is normal ,such situation you cannot be eliminated completely. Even an experienced trader goes through it. "In life we regret of quieting things early, we think if I had carried those things a little bit further instead of quieting , results may be drastically different" Key Takeaway : Accept such things do not give up seeing multiple sl in a row. Because shit happens…. ================================================== 2) You See Your Target Missed Just By One Tick ==>> It is normal do not panic have you not seen in cricket team winning and losing just by 1 run . ""There are many couples where we see that one is healthier than other. When the unhealthier one become sick everybody thinks what will happen to the healthier one if he or she dies , but unhealthier survives and healthier dies first. It is just like you thinking that prices moving in your favour and your target is very close and suddenly something happens and SL triggers." Note : Accept that such things may happen and you can't do much about it. It is Okay ================================================== 3) After You exited the price went further in your favour without taking SL ===>> This happen with me all the time and deeply frustrate me I can take SL and relax but I cannot relax in this situation where I exited just seeing profit and prices went straight without hitting my SL level. See any advice for such situation depend on your risk and reward ratio. If you have booked a decent risk reward then prices goes up or down , not a point to worry. If you booked very normal risk reward and then , you have to work on your psychology. See holding a open profit position takes more courage than holding a loss making position. If you are doing this mistake again and again It shows one clear thing about your psychology "your have less courage." Harsh but true........ Note: Work on your mindset . ================================================== 4) You get Frustrated with flat market Exited Early ===>> See most of the time market remains flat it is a fact. If you getting frustrated with this nature of market. You should learn to be patient with your open position. Note : You just place SL and Target that's it. ================================================== Acceptance is the key , if you getting good results changing your predefined well back-tested ,proper risk reward giving system ,it does not mean you doing right thing. Many times you make profit by just taking random trade setups. It does not mean random trading works. Even a layman can predict market movement correctly in a series of days. If you getting Bad results it also does not mean you doing wrong things. ==================================================
NSE:NIFTYEducation
by TRADEWITHFUN247
5
How and when should apply which Option's strategyHey everyone! 👋 This post is just for sharing knowledge about Future and Options strategies, First of all, one should build view (bias) on market direction, it may be bullish, bearish, sideways, or there may be some events too, like budget day or quarterly results seasons or may be something else, once view is built then what are the ways to apply futures and options strategies are shown in this post. Options trading may sound risky or complex for beginner investors, and so they often stay away. Some basic strategies using options, can help a novice investor protect their downside and hedge market risk. Options trading is meant to provide a process that defines the selling and buying of options by a trader. The options trading strategies are what make up the options trading. There are various ways that a trader can use the options trading strategies to their advantage. Options trading is a great way to increase your returns as an investor. You will be able to generate profits when the market goes up or when it goes down. However, with so many options trading strategies on offer, you may find it difficult to know which one to choose. This post is showing ideas of the different options strategies and help you choose the right one based on your views. What Are Options Strategies? Options are one of the most flexible and powerful way for investing in the stock markets. Investors can utilize stocks in many ways, including buying and holding onto them to long-term appreciation in value or short-term trading to make a quick buck. However, the stock market is huge, and investors can utilize many sophisticated strategies. The first complex strategy is called a call option. Call options are contracts that enable the holder to purchase a stock or other asset at a specific price within a specific time frame. If the price goes above the strike price, the owner can buy the stock at a lower price and then sell it at a higher price. This can result in a great return, but a loss is possible if the stock doesn't move or move in opposite direction. Types of Options Strategies There are four ways to trade options strategies : call, put, spread, and straddle. First, let's start with the call and put. A call is a contract that gives the owner the right to buy a stock at a specific price on or before the option's expiration date. On the other hand, a put is a contract that gives the owner the right to sell a stock at a specific price on or before the option's expiration date. Spreads and straddles are both strategies used to manage risk. A spread is created by buying the same type of option with the same expiration date but with a different strike price. The strike price is the underlying stock price when the option is exercised. A straddle is created by buying an option with a lower strike price and an option with a higher strike price with the same expiration date. Pros and Cons of Options Strategies Just like selecting a stock to trade or invest in, selecting an options strategy can be a difficult task with risks and potential payouts. The pros and cons of options strategies help you decide which is best for your investing style. Pros: - Lower investment costs​ - Stock options can be used as a way to hedge your investment or portfolio risk Cons: - High risks and losses can occur if you don't research your options strategy​ - Options can only be exercised at the expiration date​ Conclusion Traders can use Options strategies to take advantage of both rising and falling prices of stocks. We hope you have gained a deep understanding of what options strategies are this post. See you all next week. 🙂 RK_Charts 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...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing.
Editors' picks
NSEIX:NIFTY1!Education
by RK_Chaarts
125
How to add images to your charts?Hey everyone! 👋 Do you know that you can add images to your TradingView charts? That’s right! We have prepared this visual guide to help our awesome users customize their charts by adding images! Sounds good? Let’s get started. 🚀 There are 2 ways to add images to your charts: 1. The good old copy-paste method 2. Using the “Image” upload option Method 1: 1. Open the image that you want to add to your chart. 2. Copy it and open the chart window where you want to add this image. 3. When you are at the chart window, right-click and you will see the “paste” option. You can also use the keyboard shortcuts as per your operating system. (Ctrl + V for Windows OR Cmd + V for Mac) 4. Once you are done pasting, the image will appear on your chart. Method 2: 1. Go to the toolbar on the left side of the screen and select the 5th option from the top. 2. Once you click on it, you will see plenty of options. Just select the “image” option. 3. This option will provide you with an upload window. All you have to do is just click on “choose image”, select the file, and click open. . 4. You can change the opacity of the image using the “transparency” option. If you still need help, try watching this short video tutorial that we made out for you. 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! 💘
Editors' picks
NSE:TITANEducation
by TradingView
5
Why Most Traders Fail? Practical ReasonsAs per my personal experience the following are the most primary reasons for failure in trading - applicable to all types of new traders and all the markets. Well! this is not an exhaustive list but the most reasonable one. 🚩 No Plan of Action Trust me on this one, most traders fail to build a plan of action and fail. It is not only true for new traders but also to those who have been in this market for several years. Even if the latter have ever formulated such a plan, they would have never executed it with dedication. A couple of failures and all planning just vanishes in thin air. The trader needs answer to the following questions: What to trade? How much to trade? When to trade? Why to trade? Is it for intraday or swing trade? How much is the risk? Is risk tolerable? Is risk reward ratio favorable in this trade? Is the trade in the direction of primary trend or against it? If he answers all these questions in advance, he will not have to regret after entering the trade. This would also bring confidence 🦾 in him. 🧐 Tip Seekers New entrants would always look for tips from friends, business channels, broker or paid service providers. I don’t want to get into how this tip system works but I have never seen any tip seeker to be a successful trader. Rather I have seen many traders who lost their entire capital, even before their paid subscription was over. The harsh truth is that there is no shortcut to success in trading. Even seasoned traders have to work hard for making money. So, learning 👨‍🎓 is the first step for novice traders to approach what they seek. 🤑 Get Rich Quick Policy Everyone wants to be rich overnight so that he doesn’t have to work for the rest of his life. This attracts traders to buy penny stocks. What is more attractive than anything, with these stocks, is the quantity that can be bought. A larger number of shares with the available capital. The other thing is profit potential. Buy at 2 and sell at 4, money doubled overnight. Unfortunately, that doesn’t happen very often. Traders buy such stocks for day trade or swing trade but then they keep it for years for one simple reason that these stocks never attracted large portfolios, for some valid reason. For such traders, investment in a sound company would have been a better option 😆 Another very popular instrument which lures traders and has the potential to destroy a trader’s capital at much faster pace is 'Options', especially weekly index options. I have seen people at broker’s floor loosing millions in just few minutes. New traders should stay away from Options and always start small, may be in cash segment. 🥵 Overtrading Overtrading works like a currency shredder machine. Whatever goes in, never comes out in one piece. Its a very common practice among tape readers or those who trade on one-minute chart or less. Remember that you can either take one trade in a day or you can take 50 trades in a day. If you lose the former at tolerable risk, it would not harm your capital much. But if you make small profit after 50 trades, consider it a loss due to costs involved. If you are unable to control this habit, then just start shifting to a higher timeframe after taking the trade. It will help. 🚦 Inconsistency Say you have a plan but you are not executing it on every single trade. Your plan was to take a 1:2 risk-reward trade but sometimes you are taking 1:1 while the other times 2:1. A consistent trader would have a back-tested plan that he executes daily on every trade that he takes, no matter if that’s for a small profit every time. The trader needs to show some consistency in making small money every day/week. If he is consistent in it, then he can increase his position size for more profits and so on. All the above reasons combine together to develop indiscipline. But if you will take care of the above habits, one at a time, as discussed then rest assured that you are on the right track. Thanks for reading. I hope this was helpful 😉 Keep liking and comment for more such posts in future.
Editors' picks
NSE:NIFTYEducation
by Bravetotrade
49
Trading Performance PsychologyThe greater the difficulty, the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests. - Epictetus. Hey everyone! 👋 This week, we thought it would be interesting to dive into a less-commonly discussed topic: performance psychology - and discuss how it relates to Trading. Specifically, we're going to look at the following question: What actually drives outperformance from one trader to the next? From a process standpoint, there are lots of things that aspiring traders can take from other performance disciplines (like sports) in order to better understand the necessary steps to get where they would like to be. Let's jump in! Time is the common element to expertise ⏰ Mastery is built over time. First through exploration, then knowledge building, then well-structured practice. To invest the great amounts of time and effort required for mastery, an individual typically bonds emotionally with the field, creating a long-term relationship. Present in almost all extremely high performing traders is an inherent, intrinsic love of trading itself. This means a love for analyzing charts, working on strategies, looking at markets, and trying to fit the pieces together in one's head. In this frame - Trading isn't a job, it's a CRAFT. If you just love the status, the lifestyle, or the income, then it's likely that you won't reach the true heights of the profession. The highest performing traders spend hours and hours working on their trading; not because they WANT to, but because they LOVE to. Finding a niche ❤️ The greats do not become great by working hard; they work hard because they find a great niche: a field that captures their talents, interests, and imagination. The best pitcher in the world might make a terrible hitter. If you're early on in your journey (or lost), something to consider is trying to find a niche that you truly resonate with. A great deal of importance is placed on niches in other professions and institutionally within finance, as hospitals and banks have rotational programs to expose newcomers to different types of experiences. Why then, don't individual traders do this? A great way to center your thinking is by constructing a rotational program for yourself. Here's a list of the most popular asset classes & trading styles. Give each a google , or look for ideas here on TradingView, and see what you resonate with most strongly. Set yourself up for long term mastery by actually finding something you love doing day in and day out. Liquid Asset Classes: -Stocks -Currencies -Cryptocurrencies -Futures -Fixed Income -Volatility Styles (Timeframe): -Intraday - holding time is seconds to hours -Swing - holding time is days to weeks -Position - holding time is weeks to months Which holding style fits with your temperament? What topics do you like learning about? The Learning Process ✅ In trading and in life, we often hear that "Practice makes perfect". A better saying may be "Perfect practice makes perfect". How practice time is structured makes the difference between a performer who has five years of experience and someone who has one year of experience repeated five times over. So; how should you structure your practice? In performance psychology, there's a concept known as a "learning loop". It has three parts. Performance -> Feedback -> Learning (repeated). This is crucial because feedback is the key to improvement. Trading is a solo sport, which means that figuring out how to incorporate a feedback process that allows for reflection is absolutely critical. P/L is feedback, but there can be some problems with it singularly as your feedback mechanism. Even the best traders who execute the best looking trades can be on the opposite side of variance on given days. The process is king. Get feedback from your performance that doesn't have to do with P/L so you can track the inputs to your decision making. Some traders take copious notes, some record their screens, and some record data points that aren't P/L related (hours slept, hydration, mood, etc). (We have a "notes" feature built into the charts you can use for this purpose.) If you gather up all of these items together to create a long-term blueprint for building mastery, it should look something like this: 1.) Find out what you truly love about trading 2.) Explore it more deeply 3.) Stick with it through time and allow your intrinsic enjoyment to motivate you through the ups and downs 4.) Structure your performance through that time in such a way that you can generate feedback for yourself 5.) Incorporate that feedback to continually improve your process. Allow learning loops to be your engine of long-term performance. Hope you enjoyed reading, and stay safe out there! - Team TradingView
Editors' picks
NSE:NIFTYEducation
by TradingView
7
Nifty: A Study through Time CyclesNifty is in consolidation phase. This may or may not lead to a bear market and let’s not discuss it as of now. I will try to analyze Nifty, on the basis of support and resistance levels and time cycles, for the next possible swing and its direction. Support and Resistance levels ------------------------------------- It can be seen on the chart that Nifty made a high in Oct21 and faced resistance, followed by a sharp reaction of 11%. It rallied till mid of Jan22 and again faced a sharp larger reaction of 14%. It then rallied 15% throughout Mar22, faced a trendline resistance and reacted 13% If we draw important support and resistance lines through this price action we get three major levels -Dynamic resistance level through the trendline -16780 to 16850 multiple support zone which is now a potential resistance zone -15670 to 15750 support zone which also coincides with a prior area of consolidation Time Cycles ---------------- If we look at peaks, there is a 62bar high cycle followed by 51 bar cycle. In this sequence, the next cycle could have been a 40bars for the market to test trendline resistance. But that is not the case and here the market is at 16780-16850 zone after 40 bar cycle. This clearly reflects some weakness in Nifty as it was able to cover roughly half the distance on the upside compared to January and March rallies, in almost same number of days. It’s clear that the prior support zone is acting as resistance. At the valleys, there are 53 and 43bar cycles. The next cycle could be a 33bar cycle where Nifty can either breaks the recent support 15670-17750 or retests it. The 33bar cycle coincides with June expiry so there is need to take a cautious approach on the upside until 16850 resistance is taken out. I hope this idea will help you to understand the markets another non conventional perspective. Keep liking and sharing your thoughts. Disclaimer: This post is for educational purpose only and not a trading/investment advice.
Editors' picks
NSE:NIFTYEducation
by Bravetotrade
52
Circadian Rhythm For TradingHello traders 👋 how are you? As we know it is not just chart analysis or strategies that bring success in trading but there are other physical-psychological 🦾 factors also that silently act in the background and can enhance trading efficiency. In this post I have tried to throw some light on the daily schedules ⏰ that can help traders to improve their trading performance ✈ ✅ After-Market Slow Down 😌 >>Traders burn their veins watching every single candle and every tick on the chart. This leads to eye strain as well as brain fatigue. >>A two-hour rest after the market close is essential to rejuvenate yourself for family keeping. ✅ Evening Preparation 👀 >>Its difficult to search and plan your trades during live market. Therefore you need an hour or so to look into your charts, before supper. >>You may take help of screeners or shuffle through every chart on your watchlist to plan your trades. ✅ Deep Slumber 😴 >>Sleeping improves memory, boosts immune system, strengthens heart and increase productivity. >>For having a sound sleep of 7 hours or so, stay away for your mobile and laptop screens after 9 O'clock. Spend quality time with your family and kids. ✅ Overnight Adaptations 🙃 >>Wake up early and move out in the fresh air if possible. >>Do some jogging, stretching, exercising. >>After morning activities, watch out for any change in sentiment that happened overnight due to western markets and see if you need to modify your plans. ✅ Meditation 👼 >>Now that everything is almost done and there are still 15minutes or so in the market open, just sit in a relaxed physical state and concentrate on your breathing. >>Meditating this way for a few minutes may help for more effective execution of your plans. ✅ Plan Execution 🤺 >>The market opens and its now time to put your plan into practice. >>If your analysis was correct, there should not be any hesitation in executing your trades. >>Always mind trade management and risk management. Thanks for reading. Hope this was helpful!! Do like and comment for more such posts in the coming days 🙂 Bravetotrade
Editors' picks
NSE:NIFTYEducation
by Bravetotrade
9
A beginner's guide to trading - Chapter 5As a newbie trader everybody has doubts like, “Am I analysing the charts well?”, “Does my analysis skills are improving?”, “Have I changed my trading style?” etc... How to know these? By journaling you can know and measure your progress. Best way to journal your analysis is using trading view and publishing your analysis. You can publish as private ideas, if you don’t want others to see it. Since the charts are dynamic, any time you can check your analysis and the market movement after that. Lets say person A has just started analysing and he use trend lines. In the above chart when the price breaks the trend line he plans to go short. The trend line break was good and gave good profit. In the above chart the analysis was to go long when the price break the trend line. After breaking the trend line the price went sideways. Very less movement only. The price was falling and plan was to go long once the down trend was over by breaking the trend line. The price gave break out upside, but did not sustain and went sideways. Analysis 1 : good move Analysis 2 : very small move. Analysis 3 : No move. Total – 3 worked – 2 Did not work – 1 Next step was to improve further. You can add conditions like volume support, current market situation. Analysis 1 : Price was unable to break the resistance and was falling from resistance so we can go short. Analysis 2 : Price was not having volume support to move up further. Analysis 3 : Less volume and did not move up. These observations you can do in live market only. First analyse, plan and be ready for market. Then during market hours, observe and trade. After market hours check how your analysis worked, how you traded, what mistakes you have done in analysis and trading. Make this process as a habit. If you did not develop this as a habit from the starting itself, then making it as a habit becomes a tough process. Journaling your trades help you to improve and measure your progress. Start today if you have not done it so far. Perfection comes from practise. Dont stress yourself by expecting perfection from day 1. As a trader you have to make yourself ready to face the market, adapt the market and measure you progress. Remember you can trade better than you think, if you follow this process.
NSE:AUROPHARMAEducation
by vanathi
7
What is Fibonacci extension?Hey everyone! 👋 Last time we explained some of the basics to know when it comes to understanding the Fibonacci retracement tool. If you haven’t read that post, be sure to check it out here: In this post, we are going to look at the Fibonacci extension along with a few exhibits that may help you solidify your understanding of this unique trading tool. Please remember this is an educational post to help everyone better understand investing and trading tools. In no way are we trying to promote a particular style of trading! Table of Contents: 1. What are Fibonacci extension levels? 2. What is the significance of extension levels? 3. How to find extension levels? 4. Difference between the Fibonacci retracement and Fibonacci extension Without further ado, let’s jump in! What are Fibonacci extension levels? A Fibonacci extension is a tool that can be used to find price targets or estimate how far a price may move after the retracement/pullback is over. Extension levels are also possible areas of interest where the price may stall or reverse. It can be used to find projected areas of support or resistance when the price is moving into an area where other methods of finding support or resistance are not applicable or evident. Fibonacci extension levels can be calculated to give the trader ideas on profit targets. Significance of Fibonacci extension levels Different traders use this tool differently but the most common usage is as follows: Fibonacci extensions can be used for any timeframe and in any market- stocks, commodities, cryptocurrencies, etc. Fibonacci extension levels indicate a price area that will be significant for the stock after the pullback/correction is over. Extension levels can be drawn on different price waves over time. When levels from these different waves converge at one price, that could be a very important area. For example , A stock may be in an uptrend. After a move up, it retraces to the 61.8% level. Then, it starts to go up again. In this case, the extension tool can be used to find the optimal targets after the price moves above the swing high level (100% level). How to find Fibonacci extension levels? In order to find the Fibonacci extension levels, you have to find the recent significant swing high and swing low and then plot the Fibonacci extension accordingly. For uptrend: First, select the swing low and then the swing high. Then go to the Fibonacci settings and select reverse. For downtrend: First, select the swing high and then the swing low. Then go to the Fibonacci settings and select reverse. Exhibit: Fibonacci extension in an uptrend Exhibit: Fibonacci extension in a downtrend Difference Between Fibonacci Retracements and Fibonacci Extensions Fibonacci retracements provide levels for a pullback whereas Fibonacci extensions provide levels in the direction of the existing trend. For instance, a stock goes from 50 to 100 and then falls back to 75. The move from 100 to 75 is a retracement. If the price starts rallying again and goes to 150, that is an extension because the price moved past the previous swing high which is 100 in this case. Conclusion: Adding Fibonacci analysis with other common methods of technical analysis can be useful for adding confluence to a trade. 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! 💘
Editors' picks
NYSE:SNAPEducation
by TradingView
18
Buying Climax: What, Why and HowBuying Climax: is a situation on the chart that represents ‘exhaustion’. This is the sharpest upward price surge where the last set of buyers enter the stock, thinking that the stock is going to the moon and never look back. This also reflects ‘Greed’ entering in to the stock. Investors who bought at the lower prices, during accumulation, take it as an opportunity to exit from the stock. Therefore, it represents those pre-conditions that lead to price correction. The climax is associated with very wide range up bars/candles with exceptional volumes, followed by supply in most cases. I will take up the case of Dr. Reddy with no particular reason but as a good example that just came in front of me and I thought it will be a good idea to share with the trading community what a climactic action looks like. Dr. Reddy had been in a downtrend between Oct2015 to Aug2017. It then consolidated for more than 2years before it decisively broke out of Rs2800 supply zone in Jan-Feb2020. It retested the supply zone in Mar2020 market correction and held it as a new support. Thereafter we can observe three major breakouts seen on this weekly chart, which would help us in understanding a buying climax in a better way. At every breakout you need to observe the range of the breakout candle and the volume involved in the breakout. A good breakout needs a wider candle with a strong closing and good volume. Let us see what happened. Breakout 1 Range of the candle – 600 pts or around 18% This seems an average type of range compared to the pre-breakout candles. So nothing alarming here. Volume – Slightly higher than the average volumes. Breakout 2 Range of the candle – 600 pts or around 15% It’s also an average type of range Volume – Is very high, more than any candle in this uptrend since 2020 Breakout 3 Range of the candle – 1160 pts or around 27% This is exceptionally wide range Volume – Exceptionally high (More than 36mn). Not seen anywhere on the chart. This is buying climax. You can see that, on the very next week, there was extremely high volume on the downside. This further validates that seller have entered the market and the upside could be limited. We can draw a resistance line from this Sep2020 highs. Price corrected 25% from this resistance in the next 5-6months. Also observe the Breakout4 (Jun2021) of the resistance (vertical dotted line) Candle Range – narrow Candle volume – very low compared to previous breakouts. This is a weak breakout which could not sustain and is followed by a big supply candle. Further indication that the stock has lost steam. I hope this idea was helpful. Do like and comment for more such educational posts in the coming days.
NSE:DRREDDYEducation
by Bravetotrade
A beginner's guide to trading - Chapter 4This question has been asked before. It has been asked now. I will be asked in future. What question is that? It is nothing but, “How to select stocks to trade?” From beginners to expert traders, everybody knows stock selection is important. Especially for intraday it is very important as same stock won’t give movement daily. There are two methods. One is to trade on active stocks and another is selecting a stock which has formed trade set up as per your strategy. Ok, now how to select stocks? For intraday, the stock you trade should be an active stock. If the price is above 400 rs means, generally the movement will be good. The price will move with momentum & show trend strength. The stocks you select should be -- Active -- Above 400 Rs -- No spikes in movement (very long upper & lower wicks). Let us take an example. Beml is in my active stock list. In the above chart on June 9th price was narrowing within a narrow range forming a symmetrical triangle. It means we can expect break out any side. I selected this stock to trade on June 10th. Next step is to prepare a trading plan. Bearish below 1330, I can go short if the price showed bearish strength with 10 points as stop. Bullish above 1350, I can go long if the price showed bullish strength with points as stop. When you have a list of active stocks, you can filter them by pattern formation like the above example and trade. Below is another example. In the above example, I have selected the stock because of the consolidation. I have expected consolidation break out once the price moves out of the zone. The levels are marked in the chart. Another method to select stocks is based on the strategy you use. I have posted the strategy used already. Please refer the link below if you have not read it. This trade set up forms in live market. So you have to wait for 15 minutes to know whether your trade set up has formed. These are just examples. Your strategy and trade set ups can have unique features depending on your trading style. It does not matter whether it is intraday or short term trading, always trade on stocks which is active and which forms the trade set up as per the strategy you use.
Editors' picks
NSE:CNXPHARMAEducation
by vanathi
11
How to create high quality trade ideas?Hey everyone! 👋 This week, we will be taking a look at the ingredients that go into creating and posting high-quality trade ideas. While many think that a good trade idea begins and ends with finding a high probability chart setup in a liquid, volatile asset, the *best* trade ideas often combine multiple disciplines - which could include macroeconomic analysis, fundamental analysis, technical analysis, or some combination therein - into one cohesive unit. Getting in the habit of incorporating all of these factors into your thought process can lead to much higher quality setups, whether or not you choose to share them with the community. Let’s jump in! There are a couple of questions that you should ask yourself when trying to come up with high-quality ideas, and they boil down to the familiar five: Who, What, Where, When, and Why. Let's start with Who. WHO: Who is this trade idea meant for? When posting a trade idea, don’t assume that the idea is one-size-fits-all. The most obvious way TradingView helps in this regard is by categorizing posts by asset class, so FX traders are looking mostly at FX ideas, and crypto investors aren’t constantly exposed to commodity futures spreads. However, there are more subtle ways this happens as well. Different traders and investors often have different styles of trading, and so even within a single asset class, a long-term investment idea may not be applicable to a short-term trader. When creating a trade idea, it may make sense to identify to readers (and yourself) who this idea is for, and within what strategy it might best fit. WHAT: Most ideas do a great job at answering this question! It’s very simple: at its core, what does this idea want to do? Whether that idea boils down to shorting the stock market or building a long/short cryptocurrency spread, make sure that your idea clearly identifies what the core thrust of the trade is. WHY: This is the crux of any good trade idea. Why should someone commit capital and risk money according to your vision? It is common for traders, especially new traders, to think that answering this question comes down to building up a confluence of price patterns, indicators, and chart drawings until they line up and it is all systems go. In some cases, this serves as a reasonable answer to the “why” question - especially when assets have strong momentum. However, oftentimes this approach may not go deep enough. What if the long technical setup on your chart is in a stock where the company’s business outlook is worsening? What if the descending triangle you’re looking at trading occurs within a larger bull market? This is where incorporating multiple disciplines, whether it’s fundamental analysis or macroeconomic understanding, can improve the quality of your trade ideas. Understanding some of the context surrounding the asset you’re trading can serve to layer probability in your favor. Here’s the bottom line: the current price in any market is a reflection of the consensus view of the future. It’s important to illustrate *why* that pricing might be materially incorrect. WHERE / WHEN: It’s important to illustrate why *right now* is the right time to act on the idea, and this is where technicals can come in very handy. Broadly speaking, fundamental data on most assets only comes out once every couple of weeks, if that. It’s even longer between fundamental data releases for stocks. Because of this, utilizing price patterns, indicators, candlestick charting, and other technical analysis can be extremely helpful in defining risk, pinpointing entries, and trading more efficiently overall. This is also where clean charting comes in. It’s important to identify how trader positioning, supply and demand zones, and other factors (that technicals help illustrate) affect the timing and risk of the idea. In addition, when publishing an idea on TradingView, the chart is one of the most visible and prevalent ways of communicating this information. Making these items clearly defined can significantly improve the quality of a trading idea and ensure clear communication of the important information. So there you have it - the key questions that are at the core of any good trading idea! We look forward to seeing how this framework is incorporated into future posts. 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! 💘
Editors' picks
TVC:USOILEducation
by TradingView
4
What is Fib Speed Resistance Fan? How to use it?A Fibonacci fan is a technical analysis charting technique that uses the Fibonacci ratio to predict support and resistance levels graphically. The Fibonacci ratio can be used to describe proportions in everything from nature's smallest building blocks, such as atoms, to the universe's most advanced patterns, such as unimaginably large celestial bodies. Nature relies on this innate proportion to maintain balance, but the financial markets appear to follow suit. Traders can use the Fibonacci fan lines to predict key points of resistance or support where price trends may reverse. Once a trader has identified patterns in a chart, he or she can use those patterns to forecast future price movements as well as future levels of support and resistance. The predictions are used by traders to time their trades. For both the price and time axes of charts, technical analyses based on Fibonacci ratios are available. Retracements can also be used by analysts to generate arcs or fans on arithmetic or logarithmic scales. Nobody seems to know whether these tools work because stock markets follow a natural pattern or because many investors use Fibonacci ratios to predict price movements, causing them to self-fulfill. In any case, key support and resistance levels at 61.8 percent tend to occur frequently on both uptrends and downtrends. Simply find the proportion of one number in the series to its neighbors to derive the three key ratios commonly used in technical analysis based on the Fibonacci series. Adjacent numbers produce the inverse of phi, or 0.618, corresponding to a 61.8 percent retracement level. Numbers two positions apart in the sequence produce a ratio of 38.2 percent, while numbers three positions apart produce a ratio of 23.6 percent. Resistance to Speed Fan lines can also be used to represent support or resistance lines. Price frequently remains above the higher speed line during an upswing. When this line is breached, prices often fall to the lower speed line, which often becomes the support level. If prices fall below the higher speed line, then climb to the lower speed line, the lower speed line becomes the resistance level. Breaking a lower speedline in a downtrend suggests a likely rise or rally to a higher speedline. If the line is broken above, the rally may continue to the top of the previous trend (or the underlying trend line).
NSE:ORIENTBELLEducation
by Kapil-Mittal
10
What is Fibonacci retracement?If you have been in the market for some time, you may have heard of “Fibonacci retracements” . Today we are going to share an informative write-up along with a few exhibits that may help you solidify your understanding of this concept. Table of Contents: 1. What are Fibonacci levels? 2. What is the significance of retracement levels? 3. How to find retracement levels? 4. How to use the retracement levels? Without further ado, let’s jump in! What are Fibonacci Retracement levels? The retracement levels are horizontal lines that indicate areas where the price could stall or reverse. These horizontal levels can act as potential support or resistance levels. They are based on Fibonacci numbers. Each level is associated with a percentage which means how much of a prior move the price has retraced. The retracement levels are 23.6%, 38.2%, 61.8%, and 78.6%. While 50% is not a pure Fibonacci ratio, it is still used as a support and resistance. This is because people regard it as an important level. The price won’t always bounce from these levels. They should be looked at as areas of interest. Hence, the Fibonacci retracement should be used as a confirmation tool. Significance of Fibonacci Retracement levels Different traders use this tool differently but the most common usage is as follows: Place entry orders Determine stop-loss levels Set price targets For example, A stock may be in an uptrend. After a move up, it retraces to the 61.8% level. Then, it starts to go up again. Since the bounce occurred at a retracement level during an uptrend, long positions can be initiated with an optimal stop loss. Finding Fibonacci Retracement levels In order to find the retracement levels, you have to identify the recent significant swing high and swing low and then plot the Fibonacci accordingly. For uptrend: First, select the swing low and then the swing high. For downtrend: First, select the swing high and then the swing low. Exhibit: Fibonacci retracement in an uptrend Exhibit: Fibonacci retracement in a downtrend How to use the retracement levels? If the price is approaching a Fibonacci level, you should look out for the following things at the point of interaction or in the vicinity of the level. Reversal candlestick patterns Rising volumes Moving average RSI divergence Previous support/resistance level Conclusion: Adding Fibonacci analysis with other common methods of technical analysis can be useful for adding confluence to a trade. 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! 💘
Editors' picks
NSE:PIDILITINDEducation
by TradingView
21
Learning Stages in TradingIn my opinion learning in any field is connected to the "Four stages of Competence" and trading is no different. This post also answers why most traders lose in the stock market. Following are the four stages which every trader has to pass before attaining success. Unconscious Incompetence ---------------------------------- This stage belongs to the newbie traders who ignore all the knowledge part. They don't think that they need any kind of knowledge to make money. Their greatest desire is to make money in shortest possible duration so they rely on tips/news for trading. Ultimately they lose and i think more than 50% traders quit at this stage only. Conscious Incompetence -------------------------------- At this stage the trader realizes that ignorance is not a bliss. He has already lost in the markets so he thinks that may be he lacks knowledge. He starts reading books; attends online webinars; and attend courses/classes. Although he is gaining knowledge yet he confused with tons of indicators and strategies etc. He still loses because due to these confusions their is no solidarity in his plans. He has got a poor risk appetite. His ego of being right and urge to win every trade widens his losses. I think less than 30% traders survive up to this stage. Conscious Competence ------------------------------ Finally after so many losses the confusion leads to simplicity. The reader gets more systematic with setups and all, but still struggling with psychological issues like fear, greed, lack of discipline, insufficient capital etc. At this stage, I suppose 85% traders would lose their entire capital and give up scolding themselves for choosing a wrong career. Left with less than 15% traders. Unconscious Competence --------------------------------- A very few who reach at this stage and still left with funds make money from money. Trading selective setups becomes an involuntary action for them. They have realized the hardest truths of trading so psychological hurdles disappear from them. They belong to that <10% successful traders. Which stage do you belong? Do write in the comment section. Keep liking for more interesting stuff in the coming days.
Editors' picks
NSE:NIFTYEducation
by Bravetotrade
58
A beginner's guide to trading - Chapter 3In this chapter I am going to discuss about how new bie trader views the share market and the out come of it. After reading this my dear readers, write about your experience, so that it will help new people to avoid such costly mistakes. Mistakes are always costly here and beginners do that a lot. There two type of new bie traders. 1. Completely new to share market. 2. People who invest in stock market and willing to become traders. Most people when they are just new to share market, view trading as their “solution to financial problems”. Ex 1 : With 10,000 Rs I can make 20 to 30 thousand or at least double it per month. Ex 2 : I can take 50,000 Rs from my savings and triple it in a month. Ex 3 : I can borrow 20,000 Rs and earn for my monthly expenses. Ok, now logical explanation. Can you do brain surgery to a patient since brain surgeons are making huge amount for a single operation? You cant, right? Because you need to be a brain surgeon and should have good experience in surgery. So in trading, why do you expect you will rock the trading world without any proper education or practice or experience? Why share market should give money to an unskilful person? As a beginner you need to find out what type of trading suits you. Ex : Momentum trading, break out trading, trend following, scalping etc. Whatever capital you are using will be gone in few days or months without any knowledge about share market. After learning about technical jargons, you need to learn your emotions during trading. This process at least need 1 to 2 yrs depending on your stability in mind. Investment is different from trading : People who have made good money in investment think, if I can make this much profit in few yrs, I can make much more if I do short term trading or intraday. Investment, swing trade, short term trade and intraday are entirely different from each other and everything needs different skill set. Investment/trading based on news : Newbie traders or investors when they don’t have any technical knowledge think they can trade/invest based on news. In the above example the price tested the support before moving up even though the stock has good profit. In the above chart price gave good volume break out when the news was positive. 1st stock has more profit compared to 2nd stock, but 2nd stock has good movement. So trading or investing based simply on news is not enough. Check the option data to understand what majority of traders are positioning in the stock. In the above chart price broke the support and fall down even though the stock has good profit. It breaks the common belief that price will move up if it has positive news. Trading without having any technical knowledge is gambling. Dont gamble with your hard earned money. Great expectations without knowledge is dream. Good expectation with goal is a possibility.
NSE:CNXITEducation
by vanathi
6