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Chart Patterns

HOW TO RIDE HUGE RALLIES & MOMENTUM! Hello Traders! This is a learning analysis for 'How we can capture momentum & ride huge rallies in stocks.' I've taken the example of HFCL. As per the chart you can the current bullish candle closes above the green line (6ma). Whenever this happens near any support of demand zone or any moving averages stocks become bullish. In this stock it is bouncing back from the 50 ma net(red - blue - red lines). For SL we can keep it below the low of the current weekly candle. Entry can be taken @cmp. The 1st target considered is exactly 1:3 RR. Further move is expected in this trade. So SL can be trailed as per price action. How? If any weekly candle closed below the 6ma, SL will be exactly triggerd and we should exit there or should book partially. For instance see the same chart during May-July. You'll see how it worked.
NSE:HFCLEducation
by Cruoso4u
2
Why BEAR-TRAP occurs? How to Avoid and Trade a BEAR-TRAP?What is a BEAR-TRAP? --> BEAR-TRAP is a condition in the market where the Price gives a Breakdown below a Potential Support zone but quickly Reverses back above the Support without giving a follow up bearish candle. Why a BEAR-TRAP occurs? --> Big Players who are bullish on a specific stock would be wanting to buy a big quantity of shares at the best price , but there will be no enough sellers . Hence All Buy Orders of Big Players would not get filled. so what's the solution? --> Big Players know that the Retailers have maximum of their StopLoss order's just below the Support. --> Big Players will place Contra-Short Trades and will trigger the Stop-Loss Orders of the Retailers turning them into a Seller .Hence All Buy Orders of Big Players will get filled. . --> New Breakdown Traders place Fresh Short-Sell Orders looking at the Breakdown and if its a F&O stock , Call-Sellers open new positions at ATM (At the money) Strikes. . --> Now as All Buy Orders of Big Players got filled. . BIg players aggressively start moving the price up and trigger the Stop-Loss Orders of the New Breakdown Traders and Call-Sellers who entered looking at the Breakdown which ,again shoots up the price. -->Hence All Bears are been Trapped. How to avoid a BEAR-TRAP ? --> Look at the Volumes on the Breakdown ! If the Volumes are Low , It is probably a Fake Breakdown! . --> Wait for a follow up Bearish- Candle after the Breakdown Candle! i.e Take a entry only when the Low of the Breakdown-Candle breaks. --> Check out if there is a significant Long-Unwinding if its a F&O stock. How to trade a BEAR-TRAP ? -->Check out for a Reversal Pattern soon after the Breakdown. Eg: Bullish Engulfing, Bullish Harami, Bullish Piercing .etc --> This Reversal Candle Stick must close above the support. -->Enter a Long Position above the high of this reversal candle . Real Example! --> NSE:POWERGRID was trading within a Rising Channel . --> POWERGRID gave a Rising Channel Breakdown below 196 and gave a daily closing at 191. Perfect breakdown right? -->Breakdown Traders entered here keeping their Stoploss above the POC or just above Psycological level 200. and Call Sellers would have Shorted the POWERGRID 200 CE STRIKE . --> Check out the volumes on breakdown! Its very very low signifying its a Fake Breakdown. --> POWERGRID on the following day made a Bullish Above Stomach Candlestick pattern and gave a closing above the support level 196. -->Perfect Buy would be on 1HR Closing above the support level 196 on the next day. -->Boom! Price made an Impulsive Movement after it triggered all the StopLoss Orders placed at Psycological level 200 by the Breakdown Traders and also due to the Short Covering at 200 CE STRIKE . --> Wasn't it a perfect BEAR-TRAP Trade? If you liked this Educational Idea, Kindly LIKE,COMMENT, SHARE, & FOLLLOW me on Trading-View for more educational posts like this.
NSE:POWERGRIDEducation
by Roswin-Fernandes
2
Market Phases - Every trader must knowMarket Phases -Stock prices may appear random, but there are repeating price cycles, which are predominantly driven by the market participation. Below are the four types of market phases that occur. Phase 1: Accumulation - The accumulation phase is a stage of consolidation. There is no clear trend, and the stock is usually trading in a range. It's a span of time in which traders and institutions are slowly accumulating shares, but the market has not broke out yet. Trend traders finds difficulty to trade. Phase 2: Advancing - During the advancing phase, price breaks out of range (comes out of the accumulation phase) and begins a sustained uptrend. This stage is when the price begins moving up. The big money has established a position and retail investors are now invited to join in the profit party. This is the most profitable time to own the stock – an opportunity to let your profits run. Phase 3: Distribution - The distribution phase begins as the advancing phase ends and price enters another range period. The shares are being sold over a period of time—the opposite of accumulation. This time, the sellers want to maintain higher prices until the shares are sold. Phase 4: Declining - During the declining phase, price breaks out of the range (comes out of the distribution phase) and begins downtrend. This stage comes after distribution when price begins moving down. Now lets understand them one by one in detail :- 1.)Accumulation phase where trend traders find difficulty to trade Accumulation usually occurs after a fall in prices and looks like a consolidation period. Characteristics of accumulation phase: It usually occurs when prices have fallen over the last 6 months or more It can last anywhere from months to even years It looks like a long period of consolidation during a downtrend Price is contained within a range as bulls & bears are in equilibrium The ratio of up days to down days are pretty much equal The 200-day moving average tends to flatten out after a price decline Price tends to whip back and forth around the 200-day moving average Volatility tends to be low due to the lack of interest Examples of Accumulation - How To Trade Accumulation ?? 1.)Sell At Resistance 2.)Buy At Support Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns. Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance area. 2.)Advancing phase which trend traders love — Best trading strategy is to long the uptrend After price breaks out of the accumulation phase, it goes into an advancing phase (an uptrend) and consists of higher highs and lows. Characteristics of advancing phase: It usually occurs after price breaks out of accumulation phase It can last anywhere from months to even years Price forms a series of higher highs and higher lows Price is trading higher over time There are more up days than down days Short term moving averages are above long-term moving averages (e.g. 50 above 200-day ma) The 200-day moving average is pointing higher Price is above the 200-day moving average Volatility tends to be high at the late stage of advancing phase due to strong interest Examples of Advancing How To Trade Advancing ?? 1.)Breakout Trading - Where you above the highs 2.)Pullback Trading - Where you buy support which was earlier a resistance. This is called change in polarity. Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend. 3.)Distribution phase- - Distribution usually occurs after a rise in prices and looks like a consolidation period. Characteristics of distribution phase: It usually occurs when prices have risen over the last 6 months or more It can last anywhere from months to even years It looks like a long period of consolidation during an uptrend Price is contained within a range as bulls & bears are in equilibrium The ratio of up days to down days are pretty much equal The 200-day moving average tends to flatten out after a price decline Price tends to whip back and forth around the 200-day moving average Volatility tends to be high because it has captured the attention of most traders Examples of Distribution :- How To Trade Distribution ?? 1.)Sell On Resistance 2.)Buy On Support Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns. Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance are. 4.Declining phase - Best trading strategy is to short the downtrend After price breaks down of the distribution phase, it goes into a declining phase (a downtrend) and consists of lower highs and lows. This is the stage where traders who do not cut their loss become long-term investors. Characteristics of declining phase: It usually occurs after price breaks out of distribution phase It can last anywhere from months to even years Price forms a series of lower highs and lower lows Price is trading lower over time There are more down days than up days Short term moving averages are below long-term moving averages (e.g. 50 below 200-day ma) The 200-day moving average is pointing lower Price is below the 200-day moving average Volatility tends to be high due to panic and fear in the markets Examples of declining :- How To Trade Declining ?? 1.)Breakdown Trading - Where you sell below the lows 2.)Pullback Trading - Where you sell on rise after a breakdown. Supports turned into resistance. This is called change in polarity. Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend. Hope you all learnt from this post. Share with the community if you liked it. Regards Omahto
Editors' picks
NSE:NIFTYEducation
by Omahto
21
How to Trade an ASCENDING TRIANGLE BREAKOUTSTRUCTURE --> ASCENDING TRIANGLE is a type of consolidation pattern formed after an Uptrend ( Markup Phase). --> ASCENDING TRIANGLE is a triangular pattern with a flat horizontal Resistance on the top and a Trendline that connects atleast two Higher Low swings from the bottom to the top of the Triangle. --> ASCENDING TRIANGLE is considered to be a Bullish Pattern because the Swing Lows are getting shifted Higher signifiying the Sellers loosing the strength . LOGICAL REASON BEHIND THE PATTERN --> As the ASCENDING TRIANGLE is having the flat horizontal Resistance on the top , There are stack of STOP-LOSS-ORDERS just above the horizontal Resistance. When some Strong Buyer punches a heavy buying order, The order Triggers all the STOP-LOSS-ORDERS which were placed above the horizontal Resistance turning the sellers as buyers. --> Seeing the Breakout various New Traders and Algo's place more buying orders and the price tend to move higher. Example --> Take the example of the crypto GMTUSDT . --> Initially the crypto was in the Mark-Up phase. --> Later this crypto entered into the Consolidation phase by making ASCENDING TRIANGLE as the consolidation pattern. --> $0.82 was the horizontal resistance established by this stock. --> The Lows started shifting up from $0.5 to $0.7 to $0.75 showing loss in seller strength . --> The Price started sustaining above the POC (Point of Control) showing buyers strength. --> When Price Breached $0.82 all SL orders were Trigerred and the crypto gave the breakout with volume . --> The price moved higher as new Traders and Algo's placed more buying orders . Target and Stoploss --> Target would be the Depth of the Ascending Triangle, Projected above the Resistance Breakout as mentioned in the Example Screenshot. --> Stoploss would be placed below the Breakout Candle LOW .
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Education
by Roswin-Fernandes
28
A Comprehensive Guide to Rectangle Formation.Introduction: Price trends do not usually reverse on a dime. uptrend and downtrend are typically separated by a transitional period or trading range, and trading range formation signal trading opportunities for traders. The trading range separating rising and falling price trends discussed here is a pattern known as a rectangle. This post will cover these questions: 1. Types of a trend reversal. 2. Rectangle formation. 3. consolidation rectangles. 4. Significance of a rectangle pattern. 5. Retracement moves 6. What when a rectangle fails? 1.Trend reversal The turning point between the bull and bear phases is termed a reversal pattern. # Reversal patterns at market tops are known as distribution because the security is said to be “distributed” from strong, informed participants to weak, uninformed ones. # Price patterns, including rectangles, that develop at market bottoms are called accumulation formations where the security passes from weak, uninformed participants to strong, informed ones. a.Horizontal or transitional reversal. An oil tanker takes a long time to slow down and then go into reverse. The same is normally true of financial markets. Generally speaking, the longer the trend, the more time spent in the reversal (turnaround) process. This transitional or horizontal phase has great significance because it is the demarcation between a rising and a falling trend. b. Reversal on a dime without warning. This type of reversal is the exception to transitional reversal and they are the highly emotional market that changes without warning. 2. Rectangle formation. The figure shows the price action at the end of a long rising trend. price starts to move in a trading range between Point A and Point B. Point A can be identified as a resistance area after the price backed of two times from Point A. Point B can be identified as a support area after the price moved up two times from Point B. one can draw horizontal trendlines or Box on the chart to mark the level. At this point, the demand/supply relationship comes into balance in favour of the sellers whenever the price reaches A, and the demand/supply relationship comes into balance in favour of the buyers when the price reaches B. Finally, prices fall below point B signals a trend reversal and the sellers are dominating the market. 3. consolidation rectangles. If the rectangle following an uptrend is completed with a victory for the buyers as the price pushes through the upper line A , a reversal does not develop because the breakout above A reaffirms the underlying trend. In this case, the corrective phase (trading range) associated with the formation of the rectangle temporarily interrupts the bull market and becomes a consolidation pattern. In the figure, a breakout to the upside makes this pattern a continuation rectangle. #the prevailing trend is in existence until it is proved to have been reversed. 4. Significance of a rectangle pattern. i. Time Frames The longer the time frame, the more significant the pattern. A pattern that shows up on a monthly chart is likely to be far more significant than one on an intraday chart, and so forth. the longer a pattern takes to develop in a particular time frame, the greater its significance within that time frame. # Most of the time the larger pattern will be more important, but not every time. In technical analysis, we are dealing in probabilities, never certainties. ii.Volume Considerations. volume is an important independent variable that can help us obtain a more accurate reflection of crowd psychology. volume shrinks during the formation of pattern and blastoff on successful breakout/breakdown of the price. iii. Measuring implications: The depth of the pattern is projected in the direction of the breakout from the breakout point 5. Retracement moves. Many times when the price breaks out from the rectangle, the initial move is followed by a corrective move back to the breakout point. This is known as a retracement move, and it offers an additional entry point for left out players who pushes the prices again in the breakout direction. 6. What when a rectangle fails? One of the first things that should be done upon entering any business venture is to weigh the possible risk against the potential reward. the same is true in the financial markets. *Amatures on breakout only focuses on potential profits. *Professionals always consider the risk as an equal. this means when opening a new position you have to consider the risk to reward ratio and decide prior to opening the position what type of price action would cause you to conclude that the breakout was a whipsaw. Some price action to consider to identify a whipsaw (fake breakout). a.50% rule. It very much depends on the chart. If there are no obvious support points, many traders believe that a penetration of the 50 percent mark is the place to exit. In this case, the 50 percent mark is the central point between the two horizontal lines that make up the rectangle. b. Trendline support using price action trendline to identify if the trend is valid or has been breached. c. Stop below/above the opposite line of breakout/breakdown. one can set a stop above the resistance line if the short-sell position is triggered. or set a stop below the support line if the long position is triggered. d. False breakouts: Shrinking volume on an upside/downside breakout. Hope you found this helpful and I sincerely hope you find a ton of good rectangle formations to trade-in! Happy Trading!
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NSE:TITANEducation
by SANJAYPATIDAR_
30
Trade using Pitchfork and PitchFanPitchFORK + PitchFAn is very acuurate When it comes to find the point of reversal. In this chart one can easily find the point of reversal just by looking at important levels of pitchfork. If pitch fork is drawn accurately it will definitely help you in your intraday/positional trading. Draw pitchfor at daily time frame and then use it in your trading either on hourly/30min/15min/5min it will give you amazing results. good luck guys....
NSE:NIFTYEducation
by Abhi_The_Chart_Reader
A layman’s guide to Support and ResistanceForeword: Support and resistance levels are a critical part of trend analysis because they are used to make specific trading decisions. The fact that these levels flip roles between support and resistance can be used to determine the range of a market, trade reversals, bounces, or breakouts. These levels exist due to the influx of buyers and sellers at key junctures. Support and resistance levels can be drawn using a variety of technical indicators such as Moving averages, horizontal levels, trendlines, etc. (which are freely available on TradingView) This post will shed some light on these questions: 1. What is a support level? 2. What is a resistance level? 3. What is their importance? 4. When & where to place Buy/Sell orders? Please remember this is an educational post to help all of our members better understand various concepts used in trading or investing. Support: Support is a zone where the price tends to find a cushion as it falls. In general, the price is more likely to “rebound” from this level rather than pierce through it. However, once the price breaks down from this level, it is likely to continue falling until meeting another support. Illustration: Exhibit 1: Exhibit 2: Resistance: It is a zone where the price tends to find resistance as it rises. In general, the price is more likely to “bounce back down” from this level. However, once the price pushes above this level it is likely to continue rising until it meets another resistance. Illustration: Exhibit 1: Exhibit 2: Role reversal/Change of polarity: A resistance level after a successful breakout turns into support and a support level after a breakdown turns into resistance. This is known as "Change of Polarity" and the zone is called a "Flip zone". Illustration: Exhibit: Sample trade setups: 1. Buying the support If after being rejected several times by the resistance, the price finally manages to break out. The right course of action can be to wait for a successful retest of this level, before going long. This is done in order to avoid fake breakouts/bull traps. 2. Selling the resistance If after being rejected several times by the support, the price finally manages to break down. The right course of action can be to wait for a successful retest of this level, before going short. This is done in order to avoid bear traps. Conclusion: A zone keeps on flipping roles between S/R. It serves as a support at times and a resistance at others. As a result, these zones should be regarded as possible support or resistance zones, as there is no guarantee that they will operate as desired zones. Pro Tip: Since there is an influx of buyers and sellers at the S/R level, hence there is a lot of liquidity around these points. Hence, it is not wise to place orders close to these levels. Always keep a buffer.
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MCX:CRUDEOIL1!Education
by TradingView
19
📚Learn More💰Earn More - Inverted Head and Shoulders in GBPUSD 📚 LEARN MORE 💰 EARN MORE Inverted 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 / Crypto 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
The Ultimate Price Action Breakdown Strategy Preface Alright, the operation started after creating an extreme low at 120.20. Price has created an upward channel from the extreme low, where the equilibrium has occurred between bull and bear traders. Control line has given eleven touches, which shows the strong gravitation at the middle. Here, we can see four reversals on the upper band, and three reversal points occurred on the lower band. We have two opportunities: 1. Now, the price is on the H-line, and the breakout of the h line indicates the lower band touch. 2. Bull can buy at excess, or they can enter at reappearing in the value area for the target of the control line. Every beginner who wants to start trading with naked strategy (without indicator) can use this method because the price is the thing that will pay you. Let me explain to you important aspects of the breakdown strategy. Value area: A zone in which bulls and bears both are satisfied to stay within it. In this zone, supply and demand equally exist. Ascending Value area: Range-Bound Value area: Descending Value Area: Value area has two bands: Upper band: Upper band indicates demand-supply. In this chart, the price has taken four reversals from the upper band to maintain the equilibrium. The upper band put a stop to the bull power. Lower Band: The lower band indicates demand pressure. In this chart, the price has taken three reversals from the lower-band to maintain the equilibrium. The lower band put a stop to bear power. ------------------------------------------ No trading zone: In order to respond to either bull or bears initiative, the price creates an area. In which no trading activities have taken. It helps to find the weakness of any particular move. ------------------------------------------ H Line: After completing the last share move, the price creates the bulk trading activities, where bulls' power becomes dull. Breakout of the H-line indicates the cease of the particular move. ------------------------------------------ Excess: Excess is regret and fake-out. In simple words , price breaks the upper band and again re-enter into the parallel channel. Buying or selling at the excess is the perfect deal. An excess is a signal of reversal. The psychology behind the control line : Price is forming in the parallel channel, but bulls are not satisfied with the current trend. That's why bulls increase demand pressure to break the upper band of the value area. After breaking the upper band, bulls face some problems with profit booking. Now, bulls realize that the price is not going up. Bulls give up on the thought of trend change. Bears were watching this patiently. And after they realize that prices are too high, they increase supply pressure above the upper band of the channel. Now bulls are out of the market, and the seller has maintained the equilibrium & Vice versa. ------------------------------------------ Control line: The Control line is the gravitation point of any value area. We can draw by connecting the reversal points in the middle. The more the points are available, the higher the effectiveness. Please note that the price can not stay away from the control line of the value area. We can use it as a price target or breakout trade. Here, the price has given eleven touches on the control line. ------------------------------------------ Breakout or breakdown of the channel: Bulls and bears both disagree with the current price trend. Either bulls or breaks out the value area by giving consistent closing. It often happens after a complex correction or trend change. I will upload practical work on this idea. Kindly wait for the implementation. Thank you for your support. To be continued.....
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NSE:INDUSTOWEREducation
by forextidings
55
Symmetrical Triangle - Full ExplanationA Symmetrical Triangle is considered a bullish signal, indicating that the current uptrend may continue. It is a bullish continuation pattern. It is a volatility contraction pattern. This means volatility in the market is shrinking and a sign the market is likely to breakout, soon. A Symmetrical Triangle shows two converging trendlines, the lower one is ascending, the upper one is descending. The formation occurs because prices are reaching both lower highs and higher lows. The pattern will display minimum two highs touching the upper (descending) trendline and minimum two lows touching the lower (ascending) trendline. This pattern indicates a phase of consolidation before the prices breakout. The symmetrical triangle pattern is different from a descending or ascending triangle pattern as both triangles’ lower and upper trend lines slope towards the center point. A horizontal upper trendline is formed in ascending triangles that predict a higher breakout. With a descending triangle, a horizontal lower trendline is formed that predicts a lower breakout. Formation Of Symmetrical Triangle Below is the formation of symmetrical triangle Identification a Symmetrical Triangle i) The sides of the triangle slope equally (that’s why it’s symmetrical) ii) The triangle has lower highs and higher lows – at least two of each iii) It looks like a funnel, with the price “squeezing” from the left towards the right iv)The bullish symmetrical triangle should be formed in an ongoing uptrend and the prices should breakout from the upper trend line. Below is the example of the bullish symmetrical triangle formed on the 15 Min chart of NIFTY. We can see how it is formed in an ongoing uptrend and prices breakout from the upper trend line in the direction of the prior trend. Entry Entry can be done after the breakout. Sometime, when the price breaks out of the Symmetrical Triangle, it might re-test the previous market structure. So, traders can enter on the pullback also. You should also look for any reversal candlestick pattern like Hammer , Bullish Engulfing in the pullback. pullback here is very small as it is in a small Time Frame (15 Min) Stop Loss :- The stop loss is placed right before the breakout point in a symmetrical triangle chart pattern. Previous low before the breakout is the stop loss. Trailing Stop Loss :- No one knows how high or low the market can go. And by trailing your stop loss, you allow the market to reward you as it moves in your favor. You can use the Exponential Moving Average (EMA) or Moving Average (MA) to trail your stop loss. You can use the 50 EMA to trail your stop loss. If the price closes below it, then you’ll exit the trade. Target :- The price target is equal to the distance from the high and low of the earliest part of the pattern applied to the breakout price point. i)Take the distance between the high and the low of the Symmetrical Triangle — the widest point of the pattern. ii)“Copy and paste it” at the breakout point iii)Exit your trade at the price projection level There is also a bearish symmetrical triangle which is a bearish trend continuation chart pattern. The bearish symmetrical triangle should be formed in an ongoing downtrend and the prices should breakout from the lower trend line. Hope you all learnt from this post. Share with the community if you liked it. Regards Omahto
NSE:NIFTYEducation
by Omahto
4
ARE YOU ALSO STRUGGLING WITH YOUR NEW TRADING CAREER ? If you are also struggling with your new trading career then don’t just worry, it’s not like if you are only one who is struggling, as all the new comers goes through this same phase, and those who keeps believing in them and keeps the grind on eventually pass this stage and become a successful trader in the end. In this post we will discuss about what one should do if he is not able to make money in the market So, let’s start with the basics that everyone should follow in their initial phase of trading to become profitable. 1) SAVE YOUR MONEY : - There a great saying i once heard that in stock market , "First you will lose money then you will learn how not to lose your money and you will start making money ".If you are new then forget about how to make money, else keep focus on how not lose your money . Because once you have learned how not to lose your then money will just eventually start flowing into your account. So, work on protecting your capital. 2) UNDERSTANDING YOUR TRADING STYLE : - there are three types of trades one can execute in the market, and these are INTRADAY, SWING, POSTIONAL/INVESTMENT. The main difference between these trades is their holding time, assuming that you already know about these, I will proceed our discussion on why knowing your trading style is important. If you are taking intraday trades only and failing everyday then you should restart your trading journey as a Swing trader. As swing trades don’t require some immediate actions like entry and exit which is required in intraday, so you can give more time to your analysis and plan perfect entry and exit levels . And once you start feeling confident about your analysis then you can shift to intraday again back in future. Believe me this will help you a lot, at least it did the work for me. But if still want to take only intraday trades, don’t worry I will cover that up in next point. 3) PRACTICE MAKES A MAN PERFECT :-I don’t know if Practice doesn’t make a man perfector not but surely it removes the imperfections from a man. To become a better intraday trader what you have do is to take as many trades as you can but keep the quantity fixed to 1-2 and risk to reward to 1:2. Go to smaller time frame draw your support and resistance levels and execute trades accordingly, don’t worry about the small profit as it will come once you finish your training. Your goal should be of executing 500-1000 trade in next few months and see the by yourself in the end. 4) LEARN FROM YOUR MISTAKES : - whenever your trade fails, reanalyze that stock that try to figure out what was the mistake and write down your mistakes in your trading journal, it will help you to overcome your common and frequent mistakes and, in the end, you start avoiding these mistakes. 5) DEVELOP READING HABBITS : - If you have learned some few strategies from YouTube and trying to execute trades on the basis of those strategies then I will suggest you to read books about technical analysis. I am mentioning few books and sources that can help you, a) Japanese candlesticks by Steve Nison b) Trading in the zone by Mark Douglas c) Encyclopedia of chart patterns by Thomas Bulkowski d) The art and science of Technical Analysis by Adam Grimes e) Zerodha varsity is also a good source for free and systematic course of Technical Analysis and Fundamental Analysis and much more. I am sure if work on these points you will become a successful trader one day for sure. I wish you a happy trading journey, best of luck for your future.
NSE:BANKNIFTYEducation
by himanxu_yadav
Top 5 Price Action Secrets from my trading experienceIn this post I'm going to share some Price Action observations that can level up your trading game. 🚀 1) Whenever a stock breaks out on a monthly or weekly timeframe after years of resistance, the stock has the potential to deliver returns of more than 40% in the following weeks. In the chart below SASTASUNDR after a breakout from 10 year resistance gave more than 300% returns in 6 months. 2) Even in falling markets, when a stock consolidates it is a signal of strength, and it has a significant potential to make a huge move once the market has corrected. 3) If an industry sector and the overall market are both consolidating at the same time, and only a few stocks are attempting to break out, the likelihood of their failure increases dramatically. 4) When the market begins to rebound, the strongest stocks will generate higher returns and set new highs. 5) If a stock is accumulating or remaining close to its primary resistance or support, its chances of achieving BO/BD are significantly increased.
NSE:RELIANCEEducation
by Kapil-Mittal
11
Bank Nifty:Plan of Action & What FOLLOWED( +18.52% OR +7298 pts)We witnessed an awesome planned fall in Bank Nifty, hope you all enjoyed and made money with the idea. Lets look at the Plan of Bank Nifty & Nifty My Favourite Bank Nifty first & Nifty Lets dig deep into the structure & my thought process behind it First thing First "KEEP IT SIMPLE BABY'' Model 1 (ABC(Elliott ABC)/Pole & Flag/ABCD Harmonic Pattern) what ever you call it, its the simplest of the pattern to recognise & trade Elliott Wave (ZigZag) - ZigZag is a 3 waves ''Corrective'' structure in bigger 5 wave "Impulse" - Subdivision is 5-3-5 - Wave B can be any corrective structure ie zigzag-flat-triangle Fibonacci Relationship between waves are - Wave C = 61.8%, 100%, 127.2% or max 161.8%(need to be careful while labeling wave C as wave 3 is 161.8% of wave 1) - Wave B = 50%, 61.8%, 78.6% or 86% Pole & Flag - Basically Flag is a pattern which forms after market has moved some distance - Flag is a consolidation pattern used to participate in the previous move, that can be up or down - Basic & Logic of the flag is as simple as, any consolidation which is in-between parallel channel - Trade can be initiated on break of parallel channel - Fibonacci relation for the flag can be specified in 2 reversal points(Profit Taking Zone) 1) 61.8% projection of first leg, which should end in the range of 'CENTER LINE REVERSAL'' of parallel channel 2) 100% projection of first leg, in this case, price reverse from bottom of the parallel channel Harmonic Pattern( Bullish ABCD) In Harmonic Pattern (Bullish ABCD) it is labelled as ABCD, instead of ABC of Elliott wave and all the harmonic patterns are derived form understanding ABCD structure, Fibonacci Relationship of all legs BC= 61.8%-78.6% of AB CD=127.2%-161.8% of BC CD=AB CD=127.2%-161.8% of AB Now lets come back to Bank Nifty Plan As per the above study, we can easily identify Impulse and Corrections Points were considered while planning - the rally following 20 Dec 21:1300 hrs was not Impulsive in nature - Price was struggling to rise above 61.8%-78.6% fib retracement resistance level & hovering in the range - 12 Jan-02 Feb-10 Feb formed ''TRIPPLE TOP" with narrow range of 1.38% - for the said pattern we witnessed a breakdown on 24 Feb 22 on opening candle Now the some important points to consider from ''Elliott Wave Principles'' - Wave B structure As per Elliott Wave, Wave B can be a ZigZag, Flat or triangle(TO KEEP IT SIMPLE - not to go in complex corrections) Possibilities of Correction Case 1(Zigzag) Case 2(Flat) Case 3(Triangle) Now from the above two patterns we can eliminate which doesn't fits the pattern Case 1(flag) eliminated we are not left with case 2 & 3 or say Possibiltiy 2 & 3 As per possibility 2 (flat) we get As per possibility 3 (Triangle) we get Both of the labeling stated Bank Nifty & Nifty are heading lower We will wind up this, you can keep sharing & liking the effort of the author so that I can come up with more in future Wish You Happy & safe trading Views are for ‘’EDUCATIONAL PURPOSE ONLY’’ trade at your own risk. "Always Respect Risk" Happy Trading Jai Hind -
Editors' picks
NSE:BANKNIFTYEducation
by DhirajSinghBais
18
Trading is like Kids Playing with ABC:Ducon Infratech Trade PlanDear all, The above chart presents a simplicity of trading, its the heart and soul of trading, let it be a trend following system or investor or day trader or scalper -its as easy as kids ABC Let me explain my points with the simple yet powerful setup with above chart and more examples: Points to consider in every setup(conservative) - Consolidation - Breakout(A) - Consolidation - Retest(B) - Continuation(C) - Breakout - As we all know every tick in the market is a confirmation of fight between bulls and bear as bulls want to take prices higher and bears hammer the prices lower, breakout can be understood as a winning the battle and taking the prices higher. And we just have to join the WINNING SIDE in this case its BULLS - Consolidation - Consolidation can be understood as a laying the foundation for a strong building. In stock market we know it as Flag, triangle, rectangle etc - Retest - Its like price reversing back to the breakout level & consolidates again and forms patterns as flag, triangle, rectangle etc - Continuation - Price again breaks out of the consolidation zone and continues some of the live Nifty examples are mentioned below for better understanding Some of the Bank Nifty charts for ready reference Breakdown - retest from bottom & continued lower Breakout and twice retest Views are for ‘’EDUCATIONAL PURPOSE ONLY’’ trade at your own risk. "Always Respect Risk" Happy Trading Jai Hind
Editors' picks
NSE:DUCONEducation
by DhirajSinghBais
10
Double Bottom- Full ExplanationA Double Bottom is considered a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. Sometimes called an "W" formation because of the pattern it creates on the chart, the Double Bottom is one of the most frequently seen and common of the patterns. The Double Bottom is a reversal pattern of an downtrend trend in a financial instrument's price. The Double Bottom marks an downtrend in the process of becoming a uptrend. A Double Bottom consists of two well-defined, sharp bottoms at approximately the same price level. The two bottoms are distinct and sharp . The pattern is complete when prices rise above the highest high in the formation. The highest high is called the "confirmation point". The bullish momentum may be evidenced through a higher bottom on an oscillator like RSI . Though not required, the market may break below the first low, even if briefly. A slight and temporary break below the first bottom is preferred as it may excite the bears only to reverse and trend higher. The neckline is formed between the price low of the valley between the two bottoms. A break above this neckline will confirm the double bottom pattern. The bullish confirmation is specified by a break in the key price resistance level (neckline) situated at the high point between the ‘bottoms’. Important Characteristics Following are important characteristics for a Double Top . Downtrend Preceding Double Top The Double Bottom is a reversal formation. It begins with prices in an downtrend. The trend downwards should be fairly long and healthy. Time between Bottoms Generally, the longer the time between the two bottoms, the more important the pattern is as a good reversal signal. Volume Volume tends to be heaviest during the first bottom and lighter on the second. It is common to see volume pick up again at the time of breakout. Pullback after Breakout A pullback after the breakout is usual for a Double Bottom. The higher the volume on the breakout, the higher the likelihood is for a pullback. Two Peaks at Different Levels Sometimes the two comprising a Double Bottom are not at exactly the same price level. This does not necessarily render the pattern invalid. Trading with Double Top: There are certain rules when trading with Double Bottom chart patterns. Firstly one should see the market phase whether it is up or down. As the double bottom is formed at the end of a downtrend , the prior trend should be an downtrend. Traders should spot if two rounding bottoms are forming and also note the size of the bottoms. Traders should only enter the long position when the price break out from the resistance level or the neckline. Example: From the below example of the 15 Min chart of BANKNIFTY we can see how bullish reversal takes places after the formation of the double bottom Stop Loss & Target : In the case of a Double Bottom chart pattern, the stop loss should be placed at the second bottom of the pattern and can be trailed at the pullback low as price moves higher but this will be a bit aggressive. The price target should be equal to the distance between the neckline and the bottoms. The False Break: How to trade the Double Bottom Pattern and profit from “trapped” traders Now… When you trade the Double Bottom, you must pay attention to the time and space between the lows — the larger the “gap”, the better. Why? Because when the lows are far apart, it gets the attention of more traders who could push the price higher. And with this concept, you can use it to profit from “trapped” traders. Here’s how… The first and second lows should have time and space between them Let the price break below the first low Wait for a rejection of lower prices and then go long The idea is simple. As the price breaks below the first low, bearish traders will short the markets and have their stops above the lows. But if the price quickly reverses higher, the short traders are “trapped”. And you can take advantage of it by going long, anticipating if the price moves higher, it’ll trigger their stops and push the market in your favor. Hope you all learnt from this post. Share with the community if you liked it. Regards Omahto
Editors' picks
NSE:BANKNIFTYEducation
by Omahto
17