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Breakoutsignal

Advanced Trading With DataBase Part -2 #Nse #BseDefine Your Risk Tolerance and Goals: Before diving into options trading, assess your risk tolerance and establish clear trading objectives. Understand how much risk you’re willing to take on and what you aim to achieve. Diversify Your Options Strategies: Spread your risk by using various options strategies. Consider covered calls, protective puts, and other approaches to safeguard your investments. Set Entry and Exit Points: Determine specific levels at which you’ll enter and exit trades. Having clear guidelines helps you avoid emotional decisions during market fluctuations. Limit Maximum Risk Per Trade: When buying options, consider using debit spreads. These allow you to define your maximum risk upfront while still benefiting from potential gains. Allocate Capital Wisely: Allocate a specific portion of your capital to each trade. Avoid overcommitting to any single position. Diversify Across Underlying Assets: Spread your options positions across different stocks or indices. This diversification helps mitigate risk associated with individual assets. Monitor and Adjust: Stay informed about market conditions and adjust your positions as needed. Be flexible and adapt to changing circumstances.
NSE:BANKNIFTYEducation
by Optionclub
1
Role of Support Resistance in Breakout tradingWhat is Breakout Trading ? A breakout is a potential trading opportunity that occurs when a share price moves above a resistance zone or moves below a support zone on increasing volume . For trading breakouts one should be aware of support and resistance . It acts as the backbone of Price Action trading. What is Support & Resistance ? Support is a place where a stock price stop moving downwards. It is a horizontal area on a chart, where price experience buying pressure and tends to move up. Resistance is a place where a stock price stop moving upwards. It is a horizontal area on a chart, where price experience selling pressure and tends to move down Why are these support and resistance formed? Support and resistance are formed only due to our own emotions at points around high supply or demand zone . For instance, if a price falls from high 100 to 50 then in and around that price (50) there will be lots of buyers ready to buy assuming it to be very cheap price and same goes for resistance where lot of traders would like to offload their positions considering that price to be too high for the stock and good time to book profit. Why do we need Support and Resistance? Support and Resistance often helps to set 1)Target, 2)Entry and 3)Stop loss. Guidelines for Drawing Support and Resistance: For the same chart if we ask 10 traders to draw support and resistance area, we will get 10 different result. So, what are the important things to consider ? I always prefer drawing rectangular zone instead of drawing single line to make chart look clean and easy to understand the area of supply and demand . *Always Use Higher Time frame to draw Support and resistance area. * Draw a zone using rectangle which shows multiple touches. While, this zone act as great support and resistance area compare to few touches which was due to volatility . * While drawing zone make sure to cover shadows in all previous touches Things to know: * The more times the S&R zones are tested in a short period of time, the weaker they become & the greater the likelihood it will break. Rules for Positional breakout : 1)Candle closing is mandatory to trade breakouts. 2)Wait for the retest, if the price closes too far from the breakout level. 3)There should not be HTF support/resistance near the breakout level. Types of breakout Patterns : 1)Rising & Falling Trendline 2)Rising & Falling Channel 3)Rectangular Channel 4)Ascending , Descending & Symmetrical Triangle 5)Head & Shoulder 6)Support & Resistance Breakout Hope it was helpful to you, Happy Learning & Profit making :) Thanks & Regards Divyaapugal
NSE:NIFTYEducation
by Divyaapugal
77
STOP-LOSS HUNT....What Is Stop Hunting? Stop hunting is a strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set stop-loss orders. The triggering of many stop losses at once typically creates high volatility and can present a unique opportunity for investors who seek to trade in this environment. -Investopedia. Who does this? Institutions that trade in large volumes. Technically, the script was trading near its supply zone. A breakout from this zone can be seen in the charts. But, just ahead of this breakout we can see a sharp sell-off almost taking the price to its demand zone. This sell-off would have encouraged more traders to sell or go short in their positions thereby creating huge liquidity for the institutions who wanted to go long or buy in large volumes (more sell orders from retail people - more shares available for institutions to buy). Immediately following this, we can see the script going up by 20% thereby giving losses to those who had short positions. The traders who had a long view would have lost because of the initial sell-off. The traders who had shorted would have lost because of the massive rally that followed the sell-off.
NSE:BALKRISINDEducation
by Stock-Holmes
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