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Breakout

TRENDLINES & S/R ZONES WORKS VERY WELL (EDUCATIONAL)Hello Friends, Trendlines are one of the best part of technical analysis, see how resistances turns into supports, and supports turns into resistances. One can start with practicing with Trendlines...! 1) Trendline is the base for all the technical patterns. So pls start practicing drawing trendline charts and then slowly move to next patterns. 2) Practice only few patterns and master in it rather than trying to learn all the patterns and techniques. 3) I would like to mention the quote of Bruce Lee here. "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times". 4) Do more and more practice on charts, more time you spend on charts, more friendship they made with you, you'll be able to understand the language of charts, because chart says everything...! 5)Best learning comes out of practice you do everyday and then you apply it in real market. 6) Books knowledge will not be use full, if you don't practice it particularly in real market, because it involves lots of emotions. 7) Spend at least one hour per day in identifying chart patterns and preparing your own charts. 8) Track your charts, Understand how the price moves once the support or resistance is broken. 9) Understand which method gives you better success rate and focus on it more to improve further. 10) Believe me, Nobody can stop you. some examples are shared below nifty spot chart example gold chart example silver chart example techm chart example
NSE:NIFTYEducation
by RK_Chaarts
34
Rounding bottom breakout pattern Learning. Educational purposeThis is a chart of indiamart, here i am sharing to learn some logics of rounding bottom along with reasons, targets and stop loss. Here price has formed rounding bottom, and now it has given breakout along with good intensity of volume at same breakout candle, with supporting views by rsi above 60 at breakout, along with macd running positive crossover and now above zero line. if price retest the neckline of rounding bottom and rises again then probabilities of win are increased. here stop loss should be bottom of rounding pattern and targets should be double of total depth of rounding bottom to neckline, so our risk rewards ratio would be at least 1:2 price challenging upper bollinger band supporting indicators Disclaimer I am not sebi registered analyst My studies are for educational purpose only Consult your financial advisor before trading or investing
NSE:INDIAMARTEducation
by RK_Chaarts
SECRETS OF A FAKEOUTThe markets were/are in a state of frenzy. Any strategy with a long bias would have had a positive expectancy, even the ones that don't have an edge. It is vital for traders to build good habits because bull runs don't continue forever. Right now, you can buy the highs and still get away with it because the market is flush with liquidity and inexperienced, new coming investors. When this euphoria will die down, one has to understand the difference between real trading and jumping on the bandwagon. This tutorial is an attempt to de-mystify a simple classical chart pattern combined with statistically tested indicators and tools. Hope this helps. Here are some examples of a bad breakout: 1. 2. 3. I also have a scanner that I use to scan very tight compressions beforehand. This is what my current list looks like:
NSE:TATAINVESTEducation
by vorayash05
48
Multiple confirmation for breakout examples...Multiple confirmation for breakout (GBPJPY) : We want to share a perfect example of breakouts. There are multiple confirmation of break out on a daily basis for GBPJPY : • Flag pattern breakout • Double bottom breakout • Head and shoulder breakout • EMA 13 cross over of 50 EMA and recent support of 200 EMA twice Disclaimer : This analysis is only for educational purpose and not be considered as any trading idea/tip. Please consult your financial advisor before you take any trade and we are no way responsible for your profits/losses. Thank you! Please do like and share this idea. Thanks
GEducation
by AdhigamaTrading
CNX-PSUBANKHello All, PSU banks have been underperformers, however I can see a turnaround in this sector. A very beautiful VCP pattern is in formation and with a breakout of the horizontal line we may see some good rally in PSU banking stocks. Now, what to do after knowing this? How to look for stocks in this sector which may give good returns? Simple solution: 1) Take out the list of PSU banks. 2) Observe their charts. 3) Watch out for the one's which have already started to outperform their sectoral index i.e. CNXPSUBANK. 4) Keep a track of the stocks which are near their breakout zone or are trading at their resistance/support zones ( add them in your watchlist/ place price alerts). 5) Once you prepare a list of such stocks, read about them. See news articles related to those banks. I am sure you will find some good articles as to how their results might be. Note: Once you find your bet do not simply put in all the capital you want to invest in one go. Enter let's say 50% of the amount you want to invest, and then if the stock behaves in your direction you may think of adding further capital. Learn Pyramiding. I hope you will all follow this process and omit/add steps to it while filtering the stocks as per your experience/expertise. Do reach out to me incase you have any doubt or any advise/suggestion for me:) Happy Trading!
NSE:CNXPSUBANKEducation
by Ankit_Oberoi
Trying to catch an ITC breakoutI tried multiple times to catch a breakout on ITC and it has had it's ups and downs. 1st position I built was on 1st June. I tried to be a little greedy with the possibility of a reward, chose Options. Bought 220 CE and ITC being ITC promptly retraced back below resistance, and pretty much wiped out the money in the position. The 2nd time I tried a month later when the pullback looked promising, and this time I went with a Future contract instead. It again fizzled out and I had to exit early as the Future position was naked and had started to bleed losses. The 3rd time I built the position the right way. I hedged my futures with just OTM puts, thereby capping the loss possibility. With the hedge margin benefit, I could open double the position and that offset the "loss" due to hedge. Once that was done, I was free to maintain and hold the position for as long as needed till a breakout did occur. Why was I confident about a breakout? Well ITC has been forming a multi year symmetrical wedge - with Lower Highs, and Higher Lows. Though this has an equal chance to break both sides, at a price point near 200-215 ITC is very fairly priced even for a consolidating market - and given the bullish market sentiment, quite underpriced comparatively. For now I am continuing to trail SL on ITC and for the medium term expect it to make an up move to catch up with the rest of the market. Learnings : 1. Stay away from naked options no matter how attractive they look . Though the rewards on Options looks awesome on paper, it is very very difficult to time a larger move correctly. More often than not, with a reversal you will quickly erode capital. Better avoid them to gain longer term rewards. 2. Always hedge your futures. You can in fact make more returns on a hedged position with twice the buildup, than you could with a naked single position - and you will still spend only half the margin requirement. 3. Be patient with your trades. Many a time we're looking for quick returns, especially if we're new in the market. The trick is to slow things down and look at the bigger picture. Make sure you limit your losses, and ride your winners for long - till they turn around decisively.
NSE:ITCEducation
by libinbond
1
BULLISH FLAG PATTERN EXPLAINED.Bullish flags are a continuation pattern found in stocks with a strong uptrend. As can be observed, the pattern resembles a flag on a pole. The vertical rise forms the pole and the following period of consolidation forms the flag. The flag can be a horizontal rectangle but mostly angles down from the pole. The focus should be more on the underlying psychology of the pattern than the shape. Despite the strong vertical rally, the stock refuses to drop much because the bulls are buying as many shares they can get their hands on. ________________________________________________________________________________________________________________________ Main characteristics of a flag pattern: 1. The trend before the appearance of the pattern. 2. The channel of consolidation. 3. The volume behavior. 4. The breakout. 5. The confirmation of price movement in the direction of the breakout. _______________________________________________________________________________________________________________________ Target and Volume: The target for a bull flag is calculated by measuring the length of the flag pole and projecting it from the breakout point. The volume starts to pick up towards the end of the consolidation range indicating the oncoming breakout. Then there is a huge increase in volume when the pole is being formed and the volume tapers off during the consolidation period. ______________________________________________________________________________________________________________________ Stop Loss Options: 1. Longer term traders may place their stop loss below the entire flag. 2. A stricter option would be just below the consolidation are before the breakout. 3. The tightest option would be a two bar low trailing stop. ______________________________________________________________________________________________________________________ Thoughts: No one can know for sure which way the price will move, whether it will continue or reverse. One can follow the action of price, trade only the best setups and let the probabilities work out. While patterns may give false signals, bullish flags are generally reliable and effective. ______________________________________________________________________________________________________________________ Alert: Keep an eye out for price action unravelling currently. Price is pulling back to the 20 EMA, forming a consolidation, a flag of sorts. A continuation candle near the average with decent volumes could be the sign of a fresh move upwards. _____________________________________________________________________________________________________________________ Will be very grateful for a like and follow. :)
GEducation
by Tradeception_
7
How to identify a successful Breakout?Underlying logic: 1. The price gets rejected from a level repeatedly and forms a major resistance. 2. There is an initial test of supply which absorbs some pending orders 3. The price finds a bottom and some sort of accumulation happens. 4. After the accumulation, the price tries to move back up to retest the resistance level. 5. A bull trap is confirmed when the price pierces through the resistance level but there is no follow-up move. 6. But after every test of the supply, it becomes weaker and weaker due to absorption of pending orders(already discussed in older posts) 7. The price finds a bottom again and then another phase of accumulation starts 8. Finally, the price moves up and tries to breakout above the resistance. This time the price manages to break out since the residual supply gets absorbed and it gives a retest. 9. If the breakout is successful, it will be followed by a bullish move and the volume will expand. 10. The retailers buy after the breakout while the institutions buy during the accumulation phase. Exhibit 1: Clear breakout and clear retest Exhibit 2: Clear breakout with NO retest of a horizontal level Exhibit 3: Breakout with consolidation at the resistance level Sometimes, the price may start consolidating at the resistance level. This is a positive sign because the price is absorbing all the residual supply and is trying to find the equilibrium. There can be many more different variations, but the underlying concepts remain the same. You can read and revise this post until you master the concepts. I hope you find this post useful. Also, if anyone is interested in getting a consolidated PDF version of this thread, then you can message me, I'll provide it. Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk. Happy learning. Cheers! @johntradingwick
NSE:JINDALSTELEducation
by johntradingwick
102
How do the Breakout traders get trapped? Part- IIPsychology and Behind the scenes stuff: 1. At the BO, there was a massive bullish candle with a very high volume. This took out the previous resistance level. 2. The retailers saw this opportunity because the price closed above the previous resistance. Hence, they entered Longs. 3. The BO was followed by a Doji and then a Bearish candle. This indicated no Bullish follow-up. 4. The next candle was the last try to trap more longs before breaking down. This is indicated by the good volume on this candle. 5. Finally the price broke down with back-to-back bearish candles and reached the previous swing low. Warning candles: 1. Doji + Big Bearish candle indicating that there is no follow-up on the BO 2. Relatively good volume on doji indicates significant selling pressure. Never a good sign for a breakout. 3. A bullish breakout must always be accompanied by a good follow up, else it cannot sustain. Bullish BO needs good bullish candles, NOT dojis. P.S: I am not saying the fakeouts can be avoided. But there are a few cases where fakeouts can be avoided. Also, this is NOT investment advice. This chart is meant for learning purposes only. Invest your capital at your own risk.
NSE:BANDHANBNKEducation
by johntradingwick
34
How Breakout traders get trapped? Underlying logic: 1. The market already gave 11% in the impulsive move and created a high. Obviously, the momentum was fading out. 2. If you recall my lecture on market structure, you already know that after the creation of a high, we must come down to create a new higher low. The market cannot keep making new highs without creating a higher low. 3. There was a Bearish divergence. The price was moving up and up but the RSI was creating an equal high indicating that there isn't enough buying pressure. (I have already covered this in my older posts) Psychology and Behind the scenes stuff: 1. At the point of BO, there was only a round bottom, so nobody would have thought of it as the cup & handle pattern. 2. After the BO failed and the price dropped and formed the handle, the retailers thought of it as a cup and handle pattern. Only after the formation of the pattern, you would think of it as a pattern. 3. But the BO traders already got trapped at the top. You aren't aware of this if you don't have knowledge 4. So, in the end, nobody really paid attention to the manipulations done by the institutions. This is how retailers are trapped. Warning candles: Doji + Hammers + Bearish candles indicating that there is a problem with the follow-up. Relatively good volume on hammer & doji, which is never a good sign for a breakout. It indicates significant selling pressure. A bullish breakout must always be accompanied by a good follow up, else it cannot sustain. Bullish BO needs good bullish candles, NOT dojis. P.S: I am not saying the fakeouts can be avoided. But there are a few cases where fakeouts can be avoided. Also, this is NOT investment advice. This chart is meant for learning purposes only. Invest your capital at your own risk.
NSE:GRANULESEducation
by johntradingwick
248
Venkeys: my bar-by-bar trade analysis from 1700-3100+Following is my bar-by-bar trade analysis of Venkeys, currently sitting at 80%+ ROI. a. Entered NSE:VENKEYS thanks to the range breakout + RSI 60 breach, indicating momentum. Stop placed at around gap filling (1650). 50DMA was ~9% away from LTP. b. Price saw a strong move on the upside on the next day with a sizeable gap-up. 2,000 psych level held + very strong volumes. c. The next day, the price saw a strong rejection of higher levels, but it had held on to the gap up and closed above the prev candle's high. Not exiting here was a tough decision, but such trades don't come up often, and exiting too early may mean you leave far too much on the table. I'd moved my stop to gap-filling and subsequent 2100 rejection. d. Price shook out weak hands by testing lower levels but showed a very strong upmove. e. What follows are a few candles that signal exhaustion at higher levels including an inverted hammer. But by this point, I understood that Venkeys appears to have a history of showing price rejection after making a high and that a strong move might follow. The only way to catch on to this strong move would be to set a trailing stop and let the markets do the work. A stop was set to prev candle low (for partial qty) as I wanted to secure profits, too. f. Trailing stop hit, booked partial quantity profits. Now let the rest of the position run. Potential gap retest possible, but booking partial profits helps you stay in the trade for longer. However, this can also make you hold on to a position for longer than you would have. So best to be strict. g. Started showing signs of support after the dip. h. Tried to breakout, but sellers stepped in making an inverted hammer pattern. But, this is more or less normal. Still holding. i. Strong move after a doji. Staying alert as the price had just breached FIB level. This is where price had typically started showing exhaustion. j. Observing the price movements carefully. Next round of selling around highs. The potential of a further move is still there, as the price has shown its personality. But placing a trail is important. k. Holding position despite the sliding price. In hindsight, I might have waited a little longer than required. Exiting once the lows of the inverted hammers were broken could have been better. l. News of China suspending the import of frozen seafood owing to COVID-19 traces emerges. Venkeys slides, and I'm cautious at this point. Trail hit as 2700 levels are rejected. m. Strong move, but price remains sideways after that for the most part. n. Yet another strong move, and now the price is above 3,000 psych level. o. Still holding partial quantity with the intention to trail as long as the move lasts. I will update as the price moves... This was compiled during the live market, so there's a chance that what I've said in points n. and o. has been negated by EOD. I know the smallcase alphabets I've used are also used in EW analysis. My intention isn't to display any EW, but that was the easiest way of marking the candles for easy reference. P.S. I used FIB channels to test how they work. They aren't exactly my entry or exit basis, but I will do a quick tutorial on them, too. Hope this helps! Happy trading :)
NSE:VENKEYSEducation
by MarketsWithKR