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Quasimodothis is a quasimodo in buyning side when price is correct. In Latin : Quasimodo means a new born baby. Hence in price action Quasimodo means a new born trend. For us the Quasimodo is a Price action Pattern which Suggest a long term reversal in trend of a particular Script. key Level: Found at all time high area After a substantial rally at the top near to a Supply or MPL. After a substantial Fall at the bottom near to a Demand or MPL. There will be two Subsequent Engulf, Exactly opposite to each other or an engulf and a fake-out exactly opposite to each other. The second engulf or False-Out will decide the direction of the Move. Structure of an Quasimodo is H, L, HH, LL for Supply and L, H, LL, HH for Demand. The second engulf should not be a reaction of the same demand or supply of the previous High or Low, as the case may be. A Quasimodo level can be a FL or SR Break moment. Quasimodo always contain a MPL inside it. Where to look quasimodo: Entry = Quasimodo level Stoploss = Below the Quasimodo level Target = opposite level
NSE:AARTIINDEducation
by StopLoss_trader
1
Elliot wave Truncated ZigZag Real chartIt look like reliance chart daily time frame complete zig zag correction Wave formation Wave (A,B,C) Zig Zag patterns Wave A internal wave count (1,2,3,4,5) Wave B internal wave count (a,b,c) Wave C internal wave count (1,2,3,4,5) Rules and objectives: The C-Wave is Smaller than 61.8% of the A-Wave This represents the least frequent situation, when the c-wave exceeds the end of the previous a-wave, but is less than 61.8% of it. Once again, the golden ratio proves to be essential in deciding what kind of a pattern the market will form. Having said that, the logical thing to do is to measure the length of the a-wave, take 61.8% out of it, and project it from the end of the b-wave. Keep in mind that it is mandatory for the c-wave to end beyond the end of the previous a-wave. If the resulting 61.8% measured move is not enough for that, it means that the whole pattern is actually not a zigzag. This type of zigzag is really important, as it calls for a sharp retracement in the opposite direction, so by the time the price moves beyond the end of the a-wave, a powerful countertrend move should be expected. The distance to be covered is a minimum of 80% of the whole zigzag, and more often it goes beyond full retracement. As a result, we can safely say that this type of zigzag is one that should be rather faded by the time the price goes beyond the end of the a-wave.
NSE:RELIANCEEducation
by HARISHRAO99
2
Part [A] Basic of Wave Principle Elliott Wave background In the 1930s, R.N Elliott identified the price of the stock trends and reversed a specific pattern. This pattern is repetitive in form and, the patterns have predictive value. He decided to use this pattern (Elliott wave theory) to predict the market. The Elliott wave is not primarily a trading system. It is a detailed description of how the market acts. The Elliott wave is part of technical analysis. Also, the Wave principle is the reassembled form of dow theory. -Elliott Wave Principle The key To Market Behavior] Waves in the market? We all know that price never moves in a straight line. It will neither fall in a straight line nor rise in a straight line. Price will create highs and lows. And this high and low creates waves. Elliott wave theory is all about counting waves and, we are going to use the Elliott wave to trade the market. Now, the concept of waves is acceptable for you. Elliott wave theory is made of 5+3= 8 waves. Let me show you that structure in both trends. In bull market ( UP Trend ) : Figure 1.1 This is the Elliott wave structure in an uptrend. As we discussed, Elliott's wave theory is made up of 5+3=8 waves. Where five waves move with the trend and three waves move against the trend. In Bear market (downTrend) : Figure 1.2 This is an example of Elliott wave theory in the Bear market. We can see that five waves move with the trend and, three waves move against the trend. Take a deep breath, I know you have lots of doubts in your mind. Let me solve some. 1. Elliott wave theory works in any time frame. 2. These 5+3=8 waves will give us a market edge. It will provide strong trends & trend reversals. 3. The accuracy of Elliott wave theory is 84% of you are using the wave principle correctly. Practical Example of Elliott wave theory : In the Bull market : Figure 1.3 This is the TATA MOTORS 4 hour timeframe chart. I used bar charts because It is easy to recognize Elliott's waves in bar Patterns. Well, it works for me to recognize if you feel that you can recognize patterns in another chart, go ahead with bar charts! In Bear Market: Figure 1.4 : This is the ITC daily time frame chart. It shows the beautiful Elliott wave structure in the Bear market. Elliott wave structure : Now, we all know that Elliott is made of a 5+3= 8 wave structure. So, Let's start getting into it! To understand the wave principle, we have divided the wave structure (5+3=8) into two Phases which are an Impulse phase/structure & a corrective phase/structure. Figure 1.5 This picture illustrates Two phases of the Elliott wave principle. The impulse phase is made up of 5 waves and, the corrective phase is made up of 3 waves. Figure 1.6: This picture divides the wave principle into two phases. 1. Impulse phase/structure ( which includes five waves and, which moves with the trend you can see in bull market impulse phase is going upward and in a bear market, impulse phase is going down which is directional move.) & 2. Corrective Phase/structure ( which includes three waves and which moves against the trend, you can see that in bull market corrective phase is going downward and In bear markets, the corrective phase is going upward, which is a counter-trend move. Figure 1.7 , Elliott wave has 2 phases. motive/Impulse phase ( directional move ) and corrective phase(counter trend move). We can divide these 2 phases into two types of waves. Impulsive waves and corrective waves. Let’s zoom in on the impulse phase to understand the underlying structure and wave behavior. Motive/Impulse Phase : Important things about the impulse phase 1). Motive/Impulse phase is a Five wave structure that includes wave1,2,3,4 & 5. 2). motive/Impulse phase is a directional move ( moves with the trend.) 3). The Ending point of the impulse phase is the starting point of the corrective phase. 4). motive/Impulse structure is powerful than corrective structure. 5) Impulse phase can divide into two types of waves i) Impulse waves: 1, 3,5 ( move with Trend of impulse Phase ) ii) Corrective waves: 2,4 ( Moves against the trend of Impulsive Phase) Let me give you a quick understanding because we are going to cover these waves in-depth, Impulsive waves are trend-following moves. We can find this type of wave structure in both phases. Impulsive waves create trends.Impulsive waves are (1,3,5,A,C) Corrective waves are counter-Trend moves. We can find this type of wave structure in both phases. Corrective waves provide pause to continue the trend, Corrective waves : (2,4,B) Motive/Impulse Phase in Bull market Figure 1.8(A) , wave 1,3,5 is an impulsive wave of impulse phase because The trend of impulse phase up and, Impulsive wave are following the trend and heaving upward move. And wave 2,4 is the corrective wave of an impulse phase because the trend of the impulse phase is up but, the corrective wave is moving down, which is against the trend. Motive/Impulse Phase in Bear Market : Figure 1.8(B), wave 1,3,5 is an impulsive wave of impulse phase because the trend of Motive/impulse phase down and Impulsive wave are following trend and heaving downward move. And Wave 2,4 is the corrective wave of an impulse phase because the trend of the Impulse phase is down but, the corrective wave is moving upward, which is against the trend. Corrective Phase/structure : Important things about the impulse phase 1). The Corrective Phase is a three-wave structure that includes waves A, B, C. 2). The corrective phase is a counter-trend move ( moves against the trend.) 3). The Ending point of the corrective phase is the starting point of the Impulse phase. 4) correction phase can divide into two types of waves i) Impulse waves: A, C ( move with Trend of correction Phase ) ii) corrective waves: B ( moves against Trend of correction Phase ) Corrective Phase in a bull market: Figure 1.9(A ): wave A, C is the impulsive wave of the Correction phase because the trend of the correction phase is down and Impulsive waves are following the trend and heaving downward move. And Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is down but, the corrective wave is moving upward which is against the trend. Correction phase in Bear Market : Figure 1.9(B) : wave A, C is the impulsive wave of the Correction phase because the trend of correction phase Up and Impulsive waves are following the trend and heaving Upward move. And Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is Up but, the corrective wave is moving down, which is against the trend. [ Note : here, the correction phase moves against the trend. That's why the market has a Downtrend but, the correction phase is in an uptrend.] Impulsive wave structure : 1. Impulsive waves are directional moves that are bigger than corrective waves. 2. Impulsive waves create trends. 3. Impulsive waves are subdivided into five waves. ( that means wave 1,3,5, A, C which moves with the trend will have five sub-waves.) 4. Impulsive waves are easy to recognize. (Impulsive waves can also be called motive waves) 5. Ride of impulsive wave can give us a high probability trade setup with high Rewards We are going to cover impulsive wave formations in the next part. (diagonals,extensions,Impulse,Truncation) Figure 1.10: As we discussed, Impulsive waves subdivide into five waves. Here wave 1,3,5, A, C has five subwaves which you can see in the chart.
NSE:ITCEducation
by forextidings
89
Learn Elliot wave Zig Zag patternMahindra _Mahindra one hour current chart Zig zag correction normal Zig zag correction show if wave A low not break see my chart learn Zig Zag correction find live chart -> Daily chart Zig Zag patterns formation it look like GABRIEL INDIA CHART Zig Zag correction WAVE FORMATION WAVE A ]show yellow colour circle --> in inner wave 5 wave sturture .i am count 1,2,3,4,5 in black colour WAVE B show yellow colour circle --> in inner wave 3 wave sturture .i am count a,b,c in red colour WAVE C show yellow colour circle ---> in inner wave 5 wave sturture .i am count 1,2,3,4,5 in black colour Rules and objectives: 1--> zig correction first rule wave A down 5 wave sturture 2 --> Wave b up side move corrective phase 3 wave sturture 3--> Wave c direction again down side 5 wave sturcture 4--> Wave b upside not be more than 0.618% than wave A 5--> Wave-a should not retrace more than 61.8% of the previous Impulse wave of one larger degree. 6-->Wave-b should retrace at least 1% of wave-a. 7.--> Wave-c must move, even if only slightly, beyond the end of wave-a see type of Zig Zag correction Line chart
NSE:M_MEducation
by HARISHRAO99
(Elliot Wave ) How to find ZIG ZAG correction in Current chart GABRIEL INDIA --> Daily chart Zig Zag patterns formation it look like GABRIEL INDIA CHART Zig Zag correction WAVE FORMATION WAVE A ]show yellow colour circle --> in inner wave 5 wave sturture .i am count 1,2,3,4,5 in black colour WAVE B show yellow colour circle --> in inner wave 3 wave sturture .i am count a,b,c in red colour WAVE C show yellow colour circle ---> in inner wave 5 wave sturture .i am count 1,2,3,4,5 in black colour Rules and objectives: 1--> zig correction first rule wave A down 5 wave sturture 2 --> Wave b up side move corrective phase 3 wave sturture 3--> Wave c direction again down side 5 wave sturcture 4--> Wave b upside not be more than 0.618% than wave A 5--> Wave-a should not retrace more than 61.8% of the previous Impulse wave of one larger degree. 6--> Wave-b should retrace at least 1% of wave-a. 7.--> Wave-c must move, even if only slightly, beyond the end of wave-a see type of Zig Zag correction Line chart
NSE:GABRIELEducation
by HARISHRAO99
Research report: flat correction (real-time) - Support Zone.In this " Research Report " we're going to be looking at the "Flat correction". As you know, with respect to the Wave Principle, there are three types of Corrections. 1. Zigzag 2. Flat and, 3, Triangle We're going to examine the Flat now. The first thing that's important about this pattern here is being able to identify its characteristics. First is, its substructure. What I'm referring to is if you notice within "A" wave, we have three waves ((A)), ((B)) and ((C)). Then, also within "B" wave be 3 more waves, ((A)), ((B)) and ((C)). These waves are labelled "A", "B", "C" and, then that followed by a 5 wave move 1,2,3,4 and 5 which is an impulse wave and sometimes an ending diagonal bottom line. The pattern is referred to as a 3-3-5 pattern. That's one characteristic of the structure. Another characteristic of the structure is that wave "B" at or near the origin wave "A". The wave " C" is at or near extreme wave A. In rare instances, the wave "B" is surpass origin of wave "A" which is referred as an "Expanded Flat". But we're not talking about "Expanded flat" right now. Now the next thing I would like to show you with respect this pattern. Here's a price chart of HCLTECH which real time price chart rather than utilizing diagram. This is what I see when I label price chart three ways in A, B & C and wave "B" is near Origin wave "A" which dawned blue line.Okay.Next, For HCLTECH, impulse wave "C" which ends at or near the extreme wave "A". In this instance we actually went a little bit lower , typically with respect to wave. The relationships have either wave C=A or 1.382 multiples of wave are very acceptable. wave C = 1.382 of wave A, at 963 C = wave A, at 1073 Next we also need to take a look at Art of correct "Price Channel". How do we actually draw the trend lines that consists or make up the correct price channel whenever you're working with a flat correction? Very simply, you begin with the at the origin wave "A" to the extreme of sub-wave 2 of "C" and then take a parallel of that line of the extreme wave "A". Notice how in HCLTECH identifies nice trend line support for the extreme of Waves C.
NSE:HCLTECHEducation
by Trade-Technique
44
Real-Time EICHERMOT with deep study of Triangle variety.What's the difference between a running triangle and, contracting triangle? Trick is very simple. The wave "B" is beyond the origin of wave "A" we have diagram in a chart. Respect to the triangle a few things to remember. 1) they can only form by themselves in wave "4" , wave "B" , wave "X" and rarely wave "2" . That being the case, triangles always proceed the final move within a sequence. 2) The final move of the triangle which is referred to as a triangle thrust that is either typically small or very large. Rarely is there a medium type move. 3) If you're very aggressive and you want to try and capture the final move. Okay, because that would give you maximum profit potential in this. That's not my training trading style because it is aggressive. When you do this, most people have a tendency to want to put a protective stop at the extreme at wave "C" but I do not recommend that, Actually recommend putting the stop at the extreme of wave "A". Now you know, with respect to the wave principle, there's two types of wave form survey modalities, Motive waves and Corrective waves. Now with within the corrective wave family are specifically, we have zigzags, flats and triangles. We're going to be examining Triangles. And within the triangle family there's actually 3 subsets or three types of triangles: 1) Contracting triangle, 2) Barrier triangle and, 3) Expanding triangle Now, any kind or types of Triangle, and its easily to identify because the trend lines. Connect line the extreme of waves "A" and "C" coverage & "B" and "D" coverage with trend-line. There's very minor variation the the Contracting Triangle and Running Triangle. For Running Triangle wave "B" exceed the origin point of wave "A" . Next is Barrier Triangle and its forming rare or less and its easy to identify because of one trend-line which connect actually a Horizontal and another connecting trend-line will slop in the direction of larger trend. Last type of triangle we're going to examine is going to be an Expanding Triangle. In this triangle is actually very very rare. This only this type of a triangle forms only 10% of the time or less than. The most distinguishing characteristic of the expanding triangle is that true lines which connect the extremes of wave A and C & B and D coverage is actually expand. This is EICHERMOTOR weekly price chart, Scenario 1 which is under-construction for Symmetrical Triangle. The contracting for wave (B) of wave B. Here, the probability of wave ((D)) as complex. We've been learning a lot about triangles and it is actually one of three corrective wave patterns , zigzag, flat and triangles family. There is actually 3 different types of triangles we have contracting triangle., barrier triangle and expanding triangle. Now a variation of the contracting triangle that we examine was also referred to as a running triangle. We've learned that triangles me only form by themselves in the wave "4", wave "B" and wave "X" positions in that triangles always follow or proceed. Excuse me to proceed the final move within a sequence. Sometimes the move The thrust following a triangle is very small. Sometimes it's very very big, so this is. Now we're actually gonna do today is actually apply what we've learned about triangles to some relevant or a timely markets. The EICHERMOTOR chart is one right here. Whenever I look at triangle pattern characteristics which is covering trend-line. The wave ((b)) is not beyond the origin of wave ((a)) that why this is not "Running Triangle" but its a "Contracting Triangle". Thrust Measurement Technique : The simply taking the widest portion( horizontal green dash line ) of the triangle and measuring it in this instance upward from the extreme of wave ((d)) which is 3300 +. The wave ((d)) is very strong evidence whenever price cross about it and the wave ((e)) can be little exceed wave ((c)) or it can complete under the wave ((a)) and ((c)) connected trend-line. Personally I recommended protective stop at or below extreme wave ((a)) . Daily price chart for closer look: Trend-lines observation for turning point: Fib. ratio of all sub-waves: Thanks.
NSE:EICHERMOTEducation
by Trade-Technique
33
How to use "Channel Tool" on the Price Chart and its technique?On the price chart can be draw in parallel lines. For example, prices come right in front of you. If this is accurate and if I call the channel of the true value you draw. No, see if it is contained by parallel lines. It is a reasonable price, the price of the action counter train is contained by the action parallel mind, so if the price action is not contained by the parallel lines by default. For example, let's look at an impulsive structure. Here we have Waves 12345, just an excellent Elliot Wave Impulse move. Now let's look at it from the channeling technique. The first thing we want to do Pull back when I call the "Base channel" and it will be this channel here. We start from the origin of wave 1 to the extreme of wave 2 and then take it to parallel to the extreme line of wave 1. The move at this point. We now believe in clarity that we are rallying in the third wave step. Next channel. Whenever there is a lower boundary line on acceleration for the importance of acceleration channel I will call the "Acceleration Channel" which you draw from the extreme of wave 3 to the extreme of wave 3. The channel entered into its signals and confirmed that there were the wave 3 is complete. And, the wave 4 is under way. At that point, we draw a "Deceleration Channel" that defines the parameter of the wave 4. if we go back and look at the base channel, what I found out using this technique is that the trend line that forms the base channel often provides support for the wave 4 and then ends at the break of the boundary line above it. Wait until the correct price channel is on the bearish channel. Then we look at 5 ways to develop an idea. If you have three waves it is very easy, you argue that you can usually only draw one price channel and that is the signal on the price move. If your check is a counter-turn price move if you watch 5 waves, you should be able to draw 3 clear channels on it. So 3 waves, one channel, 5 waves, 3 channels. Well, now that I look at this price chart, well, what do you have? There is a move upwards, which is contained in parallel lines. It's a counter-train move. Thus we can expect more than to withdraw completely. Now go to the downside. Best of luck. Regards, Chitroda Dharmik.
NSE:RELIANCEEducation
by ChitrodaDharmik8090
36
Flag Pattern (Flag and Pole Pattern)A flag pattern is a trend continuation pattern, appropriately named after it’s visual similarity to a flag on a flagpole. Flag patterns can be bullish or bearish. 1. Flagpole: A line extending up from this break to the high of the flag/pennant forms the flagpole. The flagpole is the distance from the first resistance or support break to the high or low of the flag. The sharp advance (or decline) that forms the flagpole should break a trend line or resistance/support level. 2. Flag: A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up. The price action just needs to be contained within two parallel trend lines. 3. Break: For a bullish flag, a break above resistance signals that the previous advance has resumed. For a bearish flag, a break below support signals that the previous decline has resumed. 4. Volume: Volume should be heavy during the advance or decline that forms the flagpole. Volume contracts during the flag's formation and expands right after the resistance/support breakout. 5. Target: The length of the flagpole can be applied to the resistance break or support break of the flag to estimate the advance or decline.
NSE:PRAJINDEducation
by MandeepSinghKohli
25
Why is Closing Price important? Why do I prefer taking trades at 3:25 p.m.? Most stock prices rise significantly after 3:25 or fall just before 3:25, forcing us to enter at a lower price. Second, we simply want to be as close to the closing price as possible because many intraday positions are squared off at 3:20 p.m. and the price remains somewhat volatile for the next 5 minutes. In my opinion, the most accurate price is at 3:25 pm, which is reflected in the stocks as well, as most of them close at or near the price at 3:25 pm. Until trading resumes on the following trading day, the closing price is considered the most accurate valuation of a stock or other security. There is a widely held belief that amateurs always open the market and professionals always close it. Opening prices can be influenced by a variety of factors, including global news, gap ups and downs, economic news, and so on. Furthermore, there is always a larger player than you working in the markets alongside you. By "bigger players," I mean people with a lot of money, also known as institutional investors or "smart money." They trade between 9:15 a.m. and 3:30 p.m., the same time as you. They face the same risk when dealing with billions of shares as you do when dealing with a single share. At night, anything can happen. He is basing his holdings on the day's closing price. As a result, it is the most important price. They are certain that it will not result in a gap the following day. The primary goal of looking at the closing price is to ignore intraday price movement because it allows us to avoid tracking the market for the entire day, make fewer but higher quality decisions, enforce discipline, and reduce the likelihood of false breakouts. There are numerous examples of the market trading in the positive all day but then dipping into the negative at the end. When such movements occur, it indicates that professional money is at work at the time. In most cases, they are probably better at predicting future events than most people, so they are relying on the closing price of their holdings. When looking at breakouts, we do not consider it very significant if the stock crosses above a certain level and then returns to the previous level. There are numerous intraday breakouts occurring in the markets, and tracking them is, in my opinion, a futile exercise because it is difficult to predict whether they will hold or not. As only a few people can spot a breakout in live markets, the closing price is the earliest option to enter a trade. 90% of traders will begin researching the stock after the market closes, putting you ahead of the competition and allowing you to capitalise on gap-up opportunities. It aids in determining whether or not the trend is sustainable. As a result, as you'll see, most of the charts are plotted solely on the closing price, implying that people's attention is drawn once the price closes above a certain level.
NSE:INDOSTAREducation
by Kapil-Mittal
30
ADA reversal when?Hey everyone, Here is a detailed analysis of Cardano . It has been in a downtrend since September first week. We might consider this downtrend as a correction if it takes support on the 0.786 level of Fibonacci . Let's get into the history of ADA and what happened in the past few weeks. ADA retraced from the golden zone of Fibonacci of the previous wave and went for a new high at 3.097 USDT . Since then, it is in the downtrend. It has made some chart patterns too. Let’s look into it. The Bearish Rectangle Formation The rectangle figure is a trading pattern which can appear during bullish and bearish trends. The pattern consists of tops and bottoms, which are parallel to one another. The other key point to illustrate is that the highs and lows are all horizontal. I have shown the figure of the bearish rectangle at the top of the chart. After recognizing the chart pattern, you have to wait for the breakout and pullback. The pullback candle should not close inside the rectangle. Once the pullback is done, you can see a massive downward movement. I have marked the pullback with a green eclipse. We can set 2 profit targets for this pattern. First can be equal to the height of the rectangle and second can be equal to the length of the trend above the rectangle. I have marked the profit targets with the price range arrows . Reversal When? According to the trend-based Fib Time reversal , the trend might reverse around 26 December, if everything goes right. You can comment down if you wan to learn how to make it. When to buy the dip? According to me, you shall consider these 2 prices for the same: 1.46 to 1.55: It is the 0.786 level on Fibonacci with a major support and resistance zone. 1.02 to 1.21: This Is the zone between the previous low and the 2nd target of the bearish rectangle. Does ADA have good fundamentals? Ofcourse! Cardano’s purpose is somewhat same as Bitcoin’s purpose, but it is slightly faster in making payments. It works on blockchain, and it operates in 2 layers. The current market cap is around $50B and it was once ranked 3rd in the total market cap, which has now decreased to 6th. The social media following and team behind the project is also good. Hope you like the idea. I might not be able to post the photos of analysis of different timeframes in the same idea, as I don’t have TradingView Premium. The reason for the same is that I’m a teenager and I’ve been trading the markets with the borrowed money from my parents. I can’t afford to buy the premium, hence I request TradingView to unlock some features for some traders like me. Do check my previous education idea on cup and handle chart pattern through the link given below.
Education
by theTAguy
Introduction to Technical Analysis - Handbook for a laymanHi all, today we are going to study about basics and usage of technical analysis. I have prepared this wholesome post so that you guys are able to understand what technical analysis is all about. I have shortened the sentences to readable points, hence, don't mind the grammar. Learning objectives: After studying this post the student should be able to understand: 1. The basis of technical analysis 2. Top-down analysis in TA 3. Assumptions on which TA is based on What is Technical Analysis? 1. Art and science of forecasting future prices based on an examination of the past price movements. 2. Based on analyzing demand-supply in any tradable instrument. 3. Analyze prices, volumes, open interest, various patterns, and indicators to it in order to assess the future price movements. 4. It can be applied to any time frame. 5. TA ignores fundamentals (like financial and non-financial aspects of the company) and focuses on actual price movements. 6. TA is not astrology for predicting futures prices. The Basis of Technical Analysis What makes the Technical Analysis an effective tool to analyse the price behaviour, is explained by following theories given by Charles Dow: 1. Price discounts everything “Each price represents a momentary consensus of value of all market participants – large commercial interests and small speculators, fundamental researchers, technicians and gamblers- at the moment of transaction” – Dr Alexander Elder The current price fully reflects all the possible material information which could affect the price. The market price reflects the sum knowledge of all participants, including traders, investors, portfolio managers, buy-side analysts, sell-side analysts, market strategist, technical analysts, fundamental analysts and many others. Technical analysis looks at the price and what it has done in the past and assumes it will perform similarly in future under similar circumstances. 2. Price movements are not totally random If prices were always random, it would be extremely difficult to make money using technical analysis. Technical analysis is a trend following system. Most technicians acknowledge that hundreds of years of price charts have shown us one basic truth – prices move in trends. A technician believes that it is possible to identify a trend, invest or trade based on the trend and make money as the trend unfolds. TA can be applied to many different time frames, and so it is possible to spot both short-term and long-term trends. 3. What is more important than why “A technical analyst knows the price of everything, but the value of nothing”. Technical analysts are mainly concerned with two things: 1. The current price 2. The history of the price movement All of you will agree that the value of any asset is only what someone is willing to pay for it. Who needs to know why? By focusing just on price and nothing else, technical analysis represents a direct approach. The price is the final result of the fight between the forces of supply and demand. The objective of analysis is to forecast the direction of the future price. Fundamentalists are concerned with “why the price is what it is”. Technicians believe it is best to concentrate on what and never mind why. Why did the price go up? Simple, more buyers (demand) than sellers (supply). The principles of technical analysis are universally applicable. The principles of support, resistance, trend, trading range and other aspects can be applied to any chart. TA can be used for any time horizon; for any marketable instrument like stocks, futures and commodities, fixed-income securities, forex, etc. Top-down analysis in Technical analysis Consider the overall market, most probably the index. If the broader market were considered to be in bullish mode, analysis would proceed to a selection of sector charts. Those sectors that show the most promise would be selected for individual stock analysis. Once the sector list is narrowed to 3-5 industry groups, individual stock selection can begin. With a selection of 10-20 stock charts from each industry, a selection of 3-5 most promising stocks in each group can be made. After the stock selection, start with higher time frame charts and move down to the lower time frames. Technical Analysis: The basic assumptions The field of technical analysis is based on three assumptions: 1. The market discounts everything. 2. Price moves in trends. 3. History tends to repeat itself. The market discounts everything Technical analysis is criticised for considering only prices and ignoring the fundamental analysis of the company, economy etc. TA assumes that, at any given time, a stock’s price reflects everything that has or could affect the company - including fundamental factors. The market is driven by mass psychology and fluctuates with human emotions. Emotions may respond rapidly to extreme events, but normally change gradually over time. It is believed that the company’s fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market. Price move in trends “Trade with the trend” is the basic logic behind TA. Once a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Analysts frame strategies based on this assumption only. Trend is your friend. Don’t betray your friend. History tends to repeat itself People have been using charts and patterns for several decades to demonstrate patterns in price movements that often repeat themselves. The repetitive nature of price movements is attributed to market psychology. Market participants tend to provide a consistent reaction to similar market stimuli over time. Big Green candle = Buy, Big Red candle = Sell. So, this is it for this post. It should clear all the basic doubts about TA. If it doesn't, post the queries in the comments and I will try to help you out. I spend a lot of time creating these educational posts, illustrations, charts, and PDFs. Please be appreciative of that and leave a like and comment if you found these helpful. It will help me to know that people are actually reading these posts. Also, if you need a PDF of this post with all the charts and illustrations, check out the links below this post. Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk. Happy learning. Cheers! Rajat Kumar Singh (@johntradingwick) NSE Certified Technical & Fundamental Analyst
NSE:NIFTYEducation
by johntradingwick
121
Cup and Handle PatternA Cup and Handle pattern is a bullish continuation pattern that resembles a teacup on a candle chart followed by a breakout. The cup part of the pattern is where the price gradually changes its direction from bearish to bullish. The handle part is when the price pullback slightly before roars higher and continues the previous trend. Cup and handle is used to understand the reinforcement of the trend and explains in case you want to double your position or sustain the position for a longer time period. This pattern can take between 30 to 60 candles to form on any given time resolution. 1. Cup: The cup should be “U” shaped and resemble a bowl or rounding bottom. Generally, cups with longer and more “U” shaped bottoms, the stronger the signal. The cup should not be too deep. The depth of the cup should retrace 1/3 or less of the previous advance. Volume should dry up on the decline and remain lower than average in the base of the bowl. 2. Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. The smaller the retracement, the more bullish the formation and significant the breakout. Sometimes this handle resembles a flag. If the right side of the handle breaks above the peak formed between the cup and the handle, it confirms that the pattern is complete and that the uptrend will resume. There should be a substantial increase in volume on the breakout above the handle's resistance. The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.
HEducation
by MandeepSinghKohli
18
Get the major levels through Pitchfork like a Pro!Hey everyone, My previous education idea on Fibonacci Retracement got some good response. Today, I’m back with another education idea, explaining an awesome tool called ‘Pitchfork’. Alan Andrew, the creator of Pitchfork tool, got inspiration from Roger Babson’s action reaction lines for the idea of this epic Pitchfork tool. Likewise, Roger also got inspired from Newton’s third law of Gravity, which is action-reaction theory. So, the main root for the idea of this pitchfork tool is Sir Isaac Newton. The pitchfork looks like the gardening/agricultural tool used for picking and throwing loose material. There is a usage of median as its primary support or resistance level. There are 4 types of pitchforks, i.e., Original, Schiff, Modified Schiff and Inside. We will discuss only about Original Pitchfork today, which is used in trending markets. The other types of Pitchforks are used in consolidation or reversal or trending markets too. Comment below if you want to learn about the other types of Pitchforks too. There are few trending ways of trading the breakout of Pitchfork, i.e, Price Failure Rule, Divergence, Mini-Median Line and many more. We will not focus on them right now. Do let me know if you want to try them too. How do I trade the Pitchfork levels? Currently I’m using the Original Pitchfork (for the trending market) with the median levels: 0.5, 1, 1.5, 2. The main median line is red. 0.5 and 1.5 lines are dashed. 1 and 2 are important median lines. Let’s start with the strategy. We shall start from higher timeframe first. I’m using daily timeframe. Here is how to draw it: I started to draw the Pitchfork from the first low (marked with ‘A’) of the current trend, then you shall click on the next high (marked with ‘B’), then the next low (marked with ‘C’). Do not forget to turn on the magnet, because every pip matters while drawing the Pitchfork. Now, you will get the levels to trade. We shall go to the lower timeframes now and check if it is in the same trend till the 15mins timeframe. You have to look for few confirmations on 1 and 4 hourly timeframes before taking the trade. These confirmations may be any candlestick pattern and try confirming with any good oscillator too. Remember, in the starting of a bullish market, you should always long your first 3 or 4 swing trades. Here are some of the observations: Prices will touch these median lines before making any move in 80% of the cases. There are 20% chances that prices might not touch the median levels due to sentiments. After touching any median line, price might want to reverse or pass by the median line. For confirming the reversal, you should look for any candlestick pattern and there should be overbought or oversold situation on your oscillator too. Do not take the trade if any one of them is not present on both 1 hourly and 4 hourly timeframes. The target will be the next median line upcoming in the direction of your trade. (For swing trade) For passing by a median line, price will take a pull back on the 15 minutes timeframe after passing by a median line, in most of the cases. It will always make a wick or some engulfing or doji candles there. These candles are the confirmation that you can trail your SL or get into the trade. Trust me, it is not as easy it looks on the higher timeframe. The main game is taking entry on the lower timeframes. Try back testing this strategy before using it. Always use proper risk management. Trade Safe!
NSE:BANKNIFTY1!Education
by theTAguy
13
Institutional money - Volume speaks a lot!Apl Apollo is one of the leading companies in Indian Steel sector. I had some previous posts on it as well, which played out well for me. The key aspect is to put urself in those big shoes and think like an Institution. The key problem if you are an institution and want to buy a sizeable portion in a share is LIQUIDITY. How will you get enough sellers to buy shares from? Notice how on 11th Nov at 902 level, One MF house Sold its position in APL Apollo while another Bought it. One created Liquidity for the other. Similarly on 20th December, Two MF houses did the same routine. To understand how this impacts Volume, we need to understand what VOLUME is! VOLUME of a day is simply the number of TRADES that took place on that day. It doesn't mean that there are more buyers or more sellers, simply that N number of buyers and sellers did a trade. Now MF Houses do this in a very large amount, and this drives up the volume. If you have been in the market long enough, you would have definitely noticed that Price tends to return back to the Institutional Buying Level after a short Impulse - The Retailers usually buy in the rise and then when share prices fall down to original levels, they exit their positions to avoid further losses or simply put, their stop losses get triggered. This creates LIQUIDITY for the Institutions to fill their partial positions at the same price after offloading them to retailers previously at the top. In this particular case, There are a number of green flags. Share Price bounced from EMA 100 - which has been a strong support all along. RSI 30 - the usual bounce level and MACD Divergence decreasing Prices are again above EMA 50 which has been a key level in rising trends for this share. In previous 4 occasions when this happened, the share went on to make a Higher High. I am expecting some upside here as well. This is not an Investment Advice. Only for Educational Purposes. Thanks for reading!
NSE:APLAPOLLOEducation
by Aayush_Rungta
1
Kiss Principle-1Trading with Horizontal LinesKiss(Keep it simple and straight) In the chart I have drawn simply horizontal line on previous lows and highs where share price touched Max candles These Lines will be our TGTS (Entry and Exit Levels) Guys you have to just wait for 15 min candle break out with if you want to hold for week For intraday trader wait for 5 min candle breakout It has broken the level of 1485, next target will be 1456 and 1417 in next 2-3 days. on buy side 1490 targets will be 1514 and 1550. Happy Trading to all
NSE:TECHMEducation
by amittah