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INTRODUCTION TO RENKO CHARTHello guys today here I am sharing about RENKO charts for what is RENKO chart what are the uses and what are the benefits of this chart type. So that is why I am using RENKO chart for this publication. WHAT IS RENKO CHART (INRTRODUCTION)-: A Renko chart is a type of chart, developed by the Japanese, that is built using price movement rather than both price and standardized time intervals like most charts are. It is thought to be named after the Japanese word for bricks, "renga," since the chart looks like a series of bricks. A new brick is created when the price moves a specified price amount, and each block is positioned at a 45-degree angle (up or down) to the prior brick. An up brick is typically colored white or green, while a down brick is typically colored black or red. KEY FACTROS-: #Renko charts are composed of bricks that are created at 45-degree angles to one another. Consecutive bricks do not occur beside each other. #A brick can be any price size, such a $0.10, $0.50, $5, and so on. This is called the box size. Box size can also be based on the Average True Range (ATR). #Renko charts have a time axis, but the time scale is not fixed. Some bricks may take longer to form than others, depending on how long it takes the price to move the required box size. #Renko charts filter out noise and help traders to more clearly see the trend, since all movements that are smaller than the box size are filtered out. #Renko charts typically only use closing prices based on the chart time frame chosen. For example, if using a weekly time frame, then weekly closing prices will be used to construct the bricks. WHAT DOES WE GET FROM RENKO CHART-: Renko charts are designed to filter out minor price movements to make it easier for traders to focus on important trends. While this makes trends much easier to spot, the downside is that some price information is lost due to simple brick construction of Renko charts. The first step in building a Renko chart is selecting a box size that represents the magnitude of price movement. For example, a stock may have a $0.25 box size or a currency may have a 50 pip box size. A Renko chart is then constructed by placing a brick in the next column once the price has surpassed the top or bottom of the previous brick by the box size amount. For the stock example, assume a stock is trading at $10 and has a $0.25 box size. If the price moves up to $10.25, a new brick will be drawn. That brick will only be drawn once the price closes at $10.25 or higher. If the price only reaches $10.24, a new brick will not be drawn. Once a brick is drawn it is not deleted. If the price rises to $10.50 or higher (and closes there), another brick will be drawn. Renko bricks are not drawn beside each other. Therefore, if the stock drops back to $10.25 a down brick is not drawn next to the prior up box. The price would have to drop to $10 in order for a down brick to appear below the prior up brick. While a fixed box size is common, ATR is also used. ATR is a measure of volatility, and therefore it fluctuates over time. Renko charts based on ATR will use the fluctuating ATR value as the box size. Renko charts show a time axis, but the time intervals are not fixed. One brick to could take months to form, while several bricks may form within a day. This varies from candlestick or bar charts where a new candle/bar forms at specific time intervals. Increasing or decreasing the box size will affect the "smoothness" of the chart. Decreasing the box size will create more swings, but will also highlight possible price reversals earlier. A larger box size will reduce the number of swings and noise but will be slower to signal a price reversal. Renko charts are effective in identifying support and resistance levels since there is a lot less noise than a candlestick chart. When a strong trend forms, Renko traders may be able to ride that trend for a long time before even one brick in the opposite direction forms. Trading signals are typically generated when the direction of the trend changes and the bricks alternate colors. For example, a trader might sell the asset when a red box appears after a series of climbing white boxes. Similarly, if the overall trend is up (lots of white/green boxes) a trader may enter a long position when a white brick occurs after one or two red boxes (a pullback). :-EXAMPLE HOW TO USE RENKO CHART-: That is it mates hope you will like this, thanks and Regards
NSE:NIFTYEducation
by AMIT-RAJAN
Rally Base Drop – Supply ZoneUnlike conventional Price Action Analysis, which relies on countless chart patterns, Supply Demand Strategy focuses only on four high-probability price formations. Rally Base Drop (RBD) is one of the four price formations which lay the foundation of the Supply Demand Trading Strategy. Rally Base Drop Pattern RBD is a reversal price pattern, which one can generally locate at market turning points. At areas where uptrends get exhausted and begin a new downward move. RBD occurs when prices have been rising, and peaking, followed by a sharp drop. This indicates that the sellers are now more aggressive and have overwhelmed the buyers to form a Supply Zone. Components of a Rally Base Drop Pattern This formation comprises three parts: 1. Leg-In Candle - Bullish Candle to the left-hand side of the base structure. It need not be an explosive candle. 2. Base Candles - Narrow range small-bodied candles which indicate that orders are potentially being accumulated by the institutions. 3. Leg-Out Candle – Huge Explosive Red candle with a sharp drop in price, which indicates the footprint of Institutional Selling activity. Steps to Identify a Rally Base Drop Pattern 1. Start with the Current Price on the Chart and go from Right to left 2. Look up and left until you find a strong Drop in the Price 3. Identify whether the formation is an RBD 4. Mark the Zone When marking the Zone, we need to watch for freshness and the strength of the Leg-Out Candle. Fresh Supply Zones are those where the price has never retraced after formation, they have the highest probability of having unfilled sell orders. Strong Explosive Red Leg-Out Candle indicates that supply and demand are totally out of balance and institutions have been aggressive sellers at that price zone. Trade Action at a Rally Base Drop Supply Zone RBD pattern is the footprint of Institutional selling activity, formed due to the sheer size of their sell orders. This implies that, when prices retrace back to the area, there is a strong likelihood that there will be a large number of pending sell orders. After identifying the supply zone, we as retail traders must wait for the price to retrace to the zone. The first retracement to the RBD supply zone is a high-probability sell opportunity. We can initiate a short trade on the pullback to the zone and in doing so participate along with the Institutions to the short side. Some past examples: Although RBD is a very powerful supply zone formation, it is highly recommended that one mustn’t trade it in isolation. Combining it with factors like a trend, trend exhaustion and location will improve the odds of the zones working in our favour.
NSE:POLYCABEducation
by MAKTradingSchool
Pullback Trading Strategy - RulesPullback Trading Strategy over 80% Success Rate Rules Moving Average - Price should above 200 Period Moving Average Entry - 10 Period RSI Below 30 Exit - 10 Period RSI Above 50 Stop Loss - Recent Swing Low I hope you understood the pullback trading rules. Chart 1 : Reliance 9.68% Up The price was clearly above the 200 Period Moving Average in the chart below, and the RSI 10 period was below 30, indicating that the pullback rule was satisfied. Chart 2 : SBIN 9.4% Up The price was clearly above the 200 Period Moving Average in the chart below, and the RSI 10 period was below 30, indicating that the pullback rule was satisfied. Chart 3 : TCS 3.13% UP Pullback rule satisfied Chart 4 : Bank Nifty 2.51 % UP Chart 5 : Wipro 3.76 % UP I hope you enjoyed it. Please share and comment if you found this content useful.
NSE:NIFTYEducation
by TheNewsCrypto
19
How to trade doji candle like a legendhello everyone, It's been a long that we haven't discussed anything here.. so our today's topic of discussion is how to trade/play with signs similar to Doji/ dragonfly/hanging-man etc so we know the sign very well. we are referring here to the candlestick pattern, where there is some conflict between buyers & sellers & both keep trying to push/pull each other resulting in forming a candle where we usually see a small body candle having wicks on both sides. so our next question is how to trade them.. 1. Trend: before trading such patterns the trend should be known very well. 2. Once we have got the trend then wait for the small body candle. 3. Once we have got the candle, mark the high/low of the prior candle of the doji candle. 4. Wait for the next candle to form after the formation of doji candle. 5. once, the marked candle high/ low is breached on a closing basis you are all set to go! examples shared Example -1 Example-2 Example-3 Example-4 Example-5 Example-6 Example-7 Example-8 Example-9 I have shared multiple examples regarding the same & hope I be able to add some logic also.. Please note time frame must be kept the same while analyzing this setup. I have shared entry & stop-loss levels only. will share stop loss technique in another post Thanks for reading!!
NSE:WHIRLPOOLEducation
by ShubhamKatiyar
13
Bullish MarubozuThe bullish Marubozo candle (open equals low, high equals close) can signal a reversal when it is found at the end of a downtrend because it shows that the sentiment has changed and that the bulls are likely to continue pushing the asset higher. Take High and Low of Candle . Take Position at Close. Target ( Total Length of Candle/2), SL : Low of Candle. Risk Reward Ratio: 0.5 Feel free to share your feedback and queries. If you want to know about your stock please mention in comment. Note: This is not Paid only for Educational purpose.
NSE:BANKNIFTYEducation
by vahabsheikh
1
A Comprehensive Guide to Descending Triangle.NSE:AMBUJACEM A reliable bearish trend continuation pattern is known as Descending Triangle. This post will cover these questions: 1. What is Descending pattern? 2. How to identify Descending Triangle? 3. Pre-requisite of pattern formation. 4. Trading Tactics. 1.What is Descending pattern? #The descending triangle is a bearish formation that usually forms a continuation pattern during a downtrend. #Descending triangles also sometimes function as reversal patterns at the end of an up trend, but typically they are continuation patterns. #Descending triangles are bearish in nature. The descending triangle pattern here indicates that the buyers are not as aggressive as the sellers, so the price continues to generate lower highs. This shows that the demand for related security is falling. 2. How to identify Descending Triangle? (a.) Drawing trendlines. The bottom horizontal line (support line) is formed by two or more almost equal price lows, while the descending trend line (resistance line) is formed by two or more declining highs. (b.) what are Base and apex? -The base is the vertical line drawn from the flat support trendline to the starting point (Resistance line) of the descending trend. -The point at which both converging lines meet is called the apex point. -The breakout should happen around 2/3 size of the whole pattern. 3. Pre-requisite of pattern formation. (a.) Existence of prior trend. It is very important to identify the previous trend, an established prior trend should exist cause it's a continuation pattern. look for the pattern in a downtrend with a forecast of breakdown from the horizontal line. (b.)Volume pattern While the pattern is forming the volume diminishes. volume declines as the pattern develop and the price swings back and forth between an increasingly narrow range of lower highs and similar lows. However, there is a noticeable expansion in volume when the downside break occurs. (c.) Retracement Moves. The chances of a retracement move are very less in this pattern. After the breakout the price can move again towards the breakdown zone to test the validity of the breakout, on breakout the support is broken and when the price retraces the support becomes resistance and the price start moving in the breakout direction. 4. Trading Tactics. The entry will be below the support level and use protective stop loss above important resistance level, or it can be above 50% of pattern range. Minimum Take profit is the projected Base Line. Use position sizing according to your stoploss level. Like this idea if you find it useful and please share with your friends. Keep learning, Happy trading. Thankyou.
NSE:AMBUJACEMEducation
by SANJAYPATIDAR_
4
Beginners Guide to Market StructureMarket Structure is the most fundamental aspect of analysing charts, mastering it goes a long way in increasing one's reading of price. It provides us with a narrative with which to look at price. At a glance market structure looks quite simple but when studied in depth it has many nuances & can provide with very valuable information. Market structure is fractal in nature which means that the same pattern of price making higher highs & lower lows or vice versa repeats on all time frames. A bullish market structure on a higher time frame can have a bearish market structure on a lower time frame in its retracement leg. To analyse market structure a Top Down approach is used in which we start out by marking the structure on a higher time frame & then move down to lower time frames repeating the same process till we know where price is presently.
NSE:NIFTYEducation
by BharatAsani
Price Action Trading Using Supply & Demand ZonesSupply and Demand Trading Strategy is a price action strategy that focuses on identifying Institutional Buying & Selling Footprints on a Price Chart. This strategy doesn’t rely on any indicators or oscillators; entire focus is on Price Action. Owing to the sheer large size of their orders, Institutional buying or selling leaves behind certain footprints which create specific chart patterns. Price Action Trading Methodology relies on a vast number of Price Patterns, however Supply Demand Trading Methodology focuses only 4 Specific Price Formations. These are classified as Supply & Demand Zones. Supply & Demand Zones These zones are areas on a price chart where price in the past had spent very little time and had moved in an explosive manner. Such sharp moves in price is possible only because of Institutional buying or selling. Owing to the structure of these zones, there is a very high likelihood of having unfilled institutional orders in any zone. Demand Zone Formations Rally-Base-Rally (RBR) A Rally- Base- Rally is a price action pattern that represents the formation of a Demand Zone. It is generally found in strong uptrends, indicating a continuation of the uptrend. This type of pattern is characterized by a leg-in candle followed by a basing of candlesticks and then another Big Explosive leg-out candle. If you look at the leg out candle created in the chart below, it shows a strong vertical rally which is very likely due to institutional buying activity. Drop-Base-Rally (DBR) A Drop-Base-Rally is a formation that represents another Demand Zone pattern. It is a reversal formation, in which a drop is followed by a sideways price movement and then a strong bullish rally. The leg out candle ideally should be a big explosive move which will depict institutional buying activity. Supply Zone Formations Drop-Base-Drop (DBD) Drop-Base-Drop is a price action pattern that represents a Supply zone. A bearish drop followed by a basing or sideways price movement and then an explosive bearish continuation downwards. It is a continuation pattern which can be used to trade & participate in the down trend. Rally-Base-Drop (RBD) Rally-Base -Drop is a price action pattern that represents another supply zone. This formation is characterized by an upward move then a basing of candles and a strong explosive move downwards. Explosive drop after basing indicates the footprint of institutional selling activity. This formation is generally found at the end of an Uptrend signalling a reversal. Trade Action at Zones Supply & Demand trading methodology is a retracement strategy. Long trades can be initiated when price retraces to a Demand Zone & Short trades can be initiated when price retraces to a Supply Zone. However, all zone formations aren’t alike, one must qualify the zones based on factors like how Explosive was the move from the zone, how much time price spent in the zone & most importantly what Reward to Risk Ratios do they zones provide. These zone formations combined with Trend, Location & Multiple Time Frame Analysis lays down the ground rules for Supply Demand Trading.
NSE:ASHOKLEYEducation
by MAKTradingSchool
2
How to know that a double top or bottom will failHello Everyone as you can see here we have made two lines at the top and two lines at the bottom of the same height and you can see how it worked very well and told you very early that where it could be down and have to be cautious but it doesn't mean that everytime you find something like this you should be cautious at there and ready to exit and take the profit. Hope you get something new to learn if than pls like and follow us thanks bye.
NSE:PELEducation
by MAYANKTECHRESEARCHING
6
Divergence Cheat Sheet / Types of DivergenceWhat is divergence? Divergence is a method used in technical analysis when the direction of a technical indicator, usually some form of oscillator ‘diverges’ from the overall price trend. In other words, the indicator starts moving in the opposite direction to the price and the trading oscillator signals a possible trend reversal. Once divergence appears, there is a higher chance of a reversal, especially if divergence appears on a higher time frame. Oscillator indicator for divergence patterns is Weis Wave Volume, macd, the RSI, CCI, or stochastic OBV. Types of divergences There are 4 types of divergence, which are broadly classified into two categories: 1) Regular or Classic Divergence 2) Hidden Divergence With each of these two categories, you have a bullish or a bearish divergence. Therefore, the four types of divergences are summarized as: 1) Regular Bullish Divergence 2) Regular Bearish Divergence 3) Hidden Bullish Divergence 4) Hidden Bearish Divergence Divergence patterns indicate that a reversal is coming soon and becoming more likely but this is not an instant change. The more divergence there is visible, the more likely a reversal does become. Here are some guidelines: The entry can not be taken on the basis of divergence indicator alone. It’s best if a trader mixes the divergence indicator pattern with their strategy. Use Higher time Frames.
NSE:ELGIEQUIPEducation
by AfnanTAjuddin
22
Guide to Recession - What Is It? Recession is a scary word for any country An economic recession occurs when the economy shrinks. During recessions, even businesses close their doors. Even an individual can see these things with his own eyes: 1. People lose their jobs 2. Investment lose their value 3. Business suffers losses Note: The recession is part of an economic cycle. If you haven't read that article, you can check it below: What is the Recession? Two consecutive quarters of back-to-back declines in gross domestic product constitute a recession. The recession is followed by the peak phase. Even if a recession lasts only a few months, the economy will not reach its peak after serval years when it ends. Effect on supply & Demand - The demand for goods decreased due to expensive prices. Supply will keep increasing, and on the other hand, demand will begin to decline. That causes an "excess of supply" and will lead to falling in prices. A recession usually lasts for a short period, but it can be painful. Every recession has a different cause, but they have the main reason for the cause of the recession. What is depression? - A deep recession that persists for a long time eventually leads to depression. During a recession, the inflation rate goes down. How to avoid recession? 1. Monetary Policy - Cut interest rates - Quantitative easing - helicopter money 2: Fiscal policy - Tax Cut - Higher government spending 3: higher inflation target 4: Financial stability Unemployment : We know that companies are healthy in expansion, but there is a saying, "too much of anything can be good for nothing." During peak, The company is unable to earn the next marginal dollar. Companies are taking more risk and debt to reset the growth Not only companies but investors and debtors also invest in risky assets. Why does lay-off occur? After the peak phase, companies are unable to earn the next marginal dollar. Now, the business is no more profitable. CCompaniesstart to reduce their costs to enter into a profitable system. For example - Labour Now, Companies are working with fewer employees. Fewer employees must work more efficiently. Otherwise, they may be lay-off by the company too. You can imagine the workload and pressure. You may argue that they should leave the company! Really? Guys, we just discussed the employment rate declines. How will you get a job when there is no job? Now, you get it! Let's assume the effects of the recession on the common man: Condition 1: He may be laid off. Condition 2: Perhaps he will be forced to work longer hours. The company is unable to maintain a positive outlook. Fewer employees are doing more work due to massive lay-off. His wages decline, and he has no disposable income. As a result, consumption rates are reduced, resulting in lower inflation rates. A slowdown in the economy is caused by lower prices, which decrease profits, resulting in more job cuts. Four Causes of Recession: 1. Economic Shocks 2. Loss of Consumer 3. High-interest rates 4. Sudden stock market crash 1) Economic shocks - When there is an external or economic shock the country faces. For example, COVID-19, 2) Consumer confidence - Negative perception about the economy and the company from consumers who lack confidence in their spending power. Instead of spending, they will choose to save money. As there is no spending, there is no demand for goods and services. The absence of spending results in a lack of demand for goods and services. 3) High-interest rates - High-interest rates will reduce spending. Loans are expensive, so few people take them out. Consumer spending, auto sales, and the housing market will be affected. There can be no good demand if there is no lending. There will be a decline in production. 4) Sudden stock market crash - evade people's trust in the stock market. As a result, they do recall their money and emotion drives them crazy. It can also be considered a psychological factor. As a result, people will not spend money and GDP will decline. Consumer Spending: During the recession, consumers don’t have additional income called disposable income. Consumer spending parts -- Durable goods - Lasts for more than one year -- Non-durable goods - Lasts for less than one year -- Service - Accounting, legal, massage services, etc Durable goods surfer during the recession. Non-durable goods are recession-proof because their day-to-day fundamentals are not affected by recessions. Let's take an example of two stocks, ABC Food vs ABC car But, will you stop buying food because of the recession? Will you reduce your consumption of toothpaste, bread, and milk? The answer is "NO". Consumers buy the same amount of food in good or bad times, On the other hand, consumers only trade in or trade off their car purchase when they are not only employed but optimistic about the safety of their jobs & confident that they could get a promotion or a high paid job with another employer. And People's disposable income is absorbed during the recession. Consumer spending is the crucial point to displacing recession. Auto sales: As we discussed, few people buy cars during a recession. New car sales count as economic growth. You may have heard about 0% loans. The company facilitates a 0% loan to increase auto sales. Mostly, people repair their cars or buy old cars during the recession. You may see a boost in the used car market and spare parts selling companies’ sales. Home sales/housing markets: I have a question now! Which is your biggest asset? Most of you will say, my home! New home sales are part of economic growth. Also, house price impact how wealthy consumer feel. Higher the home prices, the more they feel rich, and vice versa. When home prices are higher, consumers feel they are wealthy and they are willing to spend. But when house price declines, they reduce spending/consumption. If your biggest asset price declines, you don’t spend and the economy takes a longer time to recover. A higher rate stops increasing the home price because they have to pay more EMI. central bank reduces rates during the recession, and the housing market rate boosts because the loan/EMI is cheap. Interest rates: Generally, interest rates decline during a recession. Central banks cut interest rates that’s why loans become cheap. Benefits of Lower interest rates - - - Boost in the housing market. - - Increase sales of durable goods - - Boost in business investment - - Bonds and interest rates have an inverse relationship. An economic downturn tends to bring investors to bonds rather than stocks, which can perform well in a recession. - - During the recession, interest rates are lower and banks highers the criteria for getting loans, so that people can face the abstracts while lending money. Stock Market: I want to clarify that, the stock market is not an economy. The economic cycle is lagging behind the market cycle and sentiment cycle. It gives me a chill as a technical analyst and a sad moment as an economics lover. Sometimes it's ahead, and sometimes it's behind. Recession = bear market . Recession-Proof Industries: * Consumer staples * Guilty pleasures * Utilities * Healthcare * Information technology * Education I will write about this in the future, but for the time being, let's get back to technical analysis .
NSE:NIFTYEducation
by Money_Dictators
6
Trends- Based on Price MovementUptrend- In an uptrend, both the peaks (tops) and troughs (bottoms) of a stock chart keep increasing successively. So, every day or so, the stock price touches a new high and falls lower than it did previously. Don’t be a mistake; this need not be a lifetime high. It could be the highest the stock touched in the past few days, weeks, or months too. This steady rise in tops and bottoms indicates that the market has a positive sentiment. It expects the stock has a higher chance to appreciate more than depreciate. So, more investors buy, thus driving the price higher. Similarly, each time the stock falls, investors see it as an opportunity to buy even more. They don’t wait for it to fall to the previous level. They buy the stock before that. This arrests the fall. Sideways- In a sideways trend, a stock doesn’t move notably in either direction during an extended period. Peaks and troughs continue to be constant and there is no significant move to decide whether to buy a stock or not. A sideways trend occurs when the force of demand & supply are nearly equal. A sideways trend is also called a ‘horizontal trend’. In this trend stock trading between two parallel horizontal support and resistance lines with less movement. Downtrend- A downtrend is a pattern, where a stock is falling constantly. Not only are successive peaks lower, but successive troughs are also lower. This means that investors in the market are convinced that the stock will fall further. Each little rise in the stock’s price is used by investors to sell their existing quota of shares. No further buying takes place at these levels. Such a stock must not be bought, no matter how much its price has fallen especially if you are a short-term investor. If you are a long-term investor, you may want to wait until the stock price falls further.
NSE:NIFTYEducation
by Mr_Chartist_
Volume price analysis & Volume Divergence Cheat sheetWhat makes volume price analysis so crucial? Volume and price analysis play a major role in trading and investing. Volume analysis helps traders and investors identify whether there is significant interest in a particular security. It also helps to identify potential buying and selling pressure, which can be useful in predicting future price movements. Price analysis helps to identify trends and price patterns, which can be useful in making trading and investing decisions. Volume and price analysis are important tools that can be used to spot trading opportunities and make sound decisions. 2 important things to keep in mind when analysing volume: 1. An increase in volume shows that market players are eager to participate in the developing market activity and want to see the price move higher in an uptrend or lower in a downtrend and are willing to buy higher in an uptrend or sell lower in a downtrend. 2. A drop in volume shows that traders are less interested in seeing prices rise in an uptrend or fall in a downtrend and are more eager to purchase lower in an upswing and sell higher in a downtrend. Volume Divergence: It is essential to check whether price and volume patterns are similar when comparing them. In that case, there is a good chance that the trend will continue. A volume divergence occurs when price and volume diverge, which indicates that the underlying trend may not be as strong. According to my observations, whenever a stock is trading at a high volume, it seems to strongly trend either upward or downward. Here are some important concepts in volume price analysis: 1.When the price of a stock rises with increased volume, it indicates that the bull trend is stronger and buyers are interested, and this is a trend continuation signal. 2. If the stock price rises but volume decreases, it indicates that the bull trend is weakening and may reverse, and buyers are not interested. Price and volume divergence suggest a trend reversal. 3. If the price is falling while the volume is increasing, it indicates that the bearish trend is quite strong and sellers are active. 4. if the price is falling and the volume is decreasing, it indicates that the bearish trend is weakening and will soon reverse, signifying divergence between price and volume and a trend reversal.
NSE:ELGIEQUIPEducation
by AfnanTAjuddin
12
IEX is about to complete it's correctionIndian energy exchange is now about to complete it's correction ,it is doing a double correction in major wave IV, fifth to the upside is still due. We can expect correction to complete near 124.85-125.85 and then final V wave target will be 407. And I'm expecting fifth to be extended because normal projection limit of wave V are 0.382 & 0.618 but as you can see these levels are already under wave III so wave V will be an extended wave.
NSE:IEXEducation
by leichtsinnig8868
'RESUME' the trend journey with a 'PAUSE' candleDefinition:- As the name suggests pause candle is the candle formed in between the trend, the change is usually opposite the trend i.e. if the underlined script is moving in an uptrend then the pause candle will be of negative change and the color will be red and vice-versa. The pause candle indicates a pause in fresh positions by market participants and an entry chance for players expecting reversals. Also, it's an opportunity for new players to enter the trend i.e. for those who have missed the initial trend. Rules or Characteristics of a pause candle:- 1. Prior candles should be aggressive i.e. large candles of the opposite color. 2. It is generally of very small size as compared to the previous one and of the opposite color. 3. Volume is considerably low as compared to previous candles. 4. The RSI level of the spot where this candle originates is usually between the band of 35-75. The psychology behind the pause candle:- In the market everything has a cause and a reason similar pause candle also conveys its message to the market players. The generation of the pause candle signifies that there is fatigue among the participants who were driving the stock or are taking some break. Also, it alerts that new hands have entered into the trend and are trying to offer resistance. Those who are looking for reversals spot this candle and enter into trade with the hope of reversals, they are generally weaker hands. Bigger hands those who were the driving force of the trend also want the new player to enter the trend so that they hunt them down and resume the rally at a lower price. How to trade pause candle:- Now, as small players, we don't know what goes inside but try to predict the message through the candle. If a pause candle is formed it doesn't mean the exhaustion of trend or reversal rather indicates a pause in fresh market position. But, here the aggressive trader enters with trades opposite to the trend. At this stage, two cases arise, note talking for an uptrend:- -> The next candle's high crosses above the high of the pause candle: Maximum times this is the case that arises, here the candle after the pause candle crosses the high of the pause candle now what does this indicate? The indication is that the trend drivers or bigger hands are active again and those who have taken a position against the trend are trapped and will try to escape hence, the move will be much sharper as compared to the initial trend. How to benefit in this case? When you spot such a pause candle that is formed after a continuous trend set it to alert candle and wait for the next candle to form. If the next candle crosses the high of the pause candle take the position along the trend and your stop would be the low of the pause candle which is generally too small and ride the sharper trend which is usually equal to the initial one. -> The next candle's low crosses below the low of the pause candle: Though not arises usually sometimes it does occur, here the candle after the pause candle crosses the high of the pause candle now what does this indicate? The indication is that the trend drivers or bigger hands are in the backseat and are not seeing further upside also there is a chance that they can book profits at this level. How to benefit in this case? When you spot such a pause candle that is formed after a continuous trend set it to alert candle and wait for the next candle to form. If the next candle crosses below the low of the pause candle take the position against the trend and your stop would be the high of the pause candle which is generally too small and ride the reversal trend which is usually half of the initial one. This case comes under the reversal candlestick patterns on which earlier an article was published by me but here we are concerned about a pause candle after which rally resumes. Here, is an example of a different scenario though it doesn't match the above said cases but still the background is of a pause candle. HIL was trading above a rising trendline and suddenly breakdown the line after which we see continue 2-3 red candles following the candles a pause candle is formed with all the above-discussed properties but rather than showing the sharp downfall it again forms a pause candle but note stop loss is not triggered. Here 3-4 pause candles are formed and finally it breakdown all the low with a big red candle and then afterward we saw a huge, sharp downfall. The motive to explain the above example was that though sometimes we don't see rapid action but if your stop is not triggered and the candles are with the low volume then you can assure that a sharp move is pending and sooner or later it will happen. Note: The only constraint is to identify the correct pause candle for which you can refer to the above-said rules are very important. Sometimes the candle after the pause candle crosses both the high and low of the pause candle in that circumstance you have to check the color of the candle, for uptrend it should be green then you can take the position else if it's red then wait for the next candle, and vice-versa for the downtrend.
NSE:NIFTYEducation
by Chaser30
5
NIFTY MIDCAP DIVERGENCENSE:NIFTY NSE:CNXMIDCAP NSE:CNXSMALLCAP Diverging for couple of days. Ideally the broad market shall start picking up. While Nifty is getting selling pressure near the Highs today. Midcap and Smallcap Index getting buying near support zone. Midcap and Smallcap shall start picking up from here on. The Broader Market Indices must converge with the Mainstream Index Nifty 50. Inter-market Divergence is not sign of healthy trend. Longer the time the divergence prevails it leads to trend reversal. As Nifty and Bank Nifty are near the Highs along with other Indices. Broader Market Indices and stocks shall pick up the trend now.
NSE:NIFTYEducation
by TrendonomicsHD
1
#crudeEducational video as how to identify a double top pattern. A double top is a bearish technical reversal pattern which is not so easy to spot as one needs a confirmation of a break down point. Question comes, How to identify the target of Double top pattern! After the confirmation of the pattern, your minimum target is equal to the size of the formation. In other words, when a stock breaks out of a double top formation, the price target is the range of the formation added to the breakout level.
MCX:CRUDEOIL1!Education
by CA_Chetanbhasin
How to compare relative performance between stocks and indices ?You can compare the relative performance by using the compare option on charts. The compare function tool is used to compare the market movements of two or more different symbols simultaneously. Popular use for a comparison chart is comparing two companies within the same sector. Click on the Compare or Add symbol button (displayed as plus sign) on the toolbar along the top of the chart, search and add the indices/stock which you would like to compare. You will see a representation of the percentage comparison from the beginning price point to the current price. To delete the comparison line right-click on it and click on ‘Remove’. This example is comparison chart of Nifty Bank and Nifty PSU Bank. After 12 years i.e. 1st November, 2010 - 7th November, 2022: Nifty Bank - 214% Positive Nifty PSU Bank - 31% Negative Nifty PSU Bank has given breakout. I hope this little information on comparing indices/stocks is useful. Please feel free to write any additional information in the comments section below. Thanks and happy learning/trading. Disclaimer: This is for demonstration and educational purpose only. This is not buying or selling recommendations. I am not SEBI registered. Please consult your financial advisor before taking any trade.
NSE:CNXPSUBANKEducation
by MandeepSinghKohli
📚Learn More💰Earn More - Inverse Head and Shoulders in EURCAD📚 LEARN MORE 💰 EARN MORE Inverse Head and Shoulders Definition: A head and shoulders pattern is also a trend reversal formation. It is formed by a Valley (left shoulder), followed by a Lower Valley (head), and then another Higher Valley (right shoulder). A “Neckline” is drawn by connecting the highest points of the two Peaks. Neckline resistance does not need to be strictly horizontal. This illustrates that the downward trend is coming to an end. When a Head and Shoulders formation is seen in a downtrend, it signifies a major reversal. The pattern is confirmed once the price breaches the neckline resistance. In this example, we can easily see the head and shoulders pattern. How to Trade the Head and Shoulders Pattern: ENTRY: we put an entry order above the neckline. TARGET: We can also calculate a target by measuring the lowest point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline. ❤️ If you find this helpful and want more FREE forecasts in TradingView . . . . . Please show your support back, . . . . . . . . Hit the 👍 LIKE button, . . . . . . . . . . Drop some feedback below in the comment! ❤️ Your Support is very much 🙏 appreciated!❤️ 💎 Want us to help you become a better Forex trader? Now, It's your turn! Be sure to leave a comment let us know how you see this opportunity and forecast. Trade well, ❤️ ForecastCity English Support Team ❤️
Education
by ForecastCity_ME
2