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Price Action Trading Strategy : PART1 Market Structure What is Price Action Trading Strategy? Price action trading is about understanding the imbalance between buying and selling pressure so that you can identify trading opportunities and make a profit. Before we discuss about Entry, Exit and Stop Loss Signals, I would like to tell you some basics about the Market Structure, Support and Resistance and Candlestick Pattern. I will be dividing all these topics in different parts, so that it will be easy to understand. So let's start with PART 1 Market Structure. Market Structure Accumulation. Advancing. Distribution. Declining. If you have a clear idea in which structure market is moving, then we are in less trouble to find whether to Buy or Sell. Accumulation Stage This phase is common for smart money and waiting for High Up move. Price Tends to move sideways between support and resistance. Some Characteristic of Accumulation stage: It occurs after the price has fallen over the last five months or more (on the daily timeframe). It looks like a range market with obvious areas of support and resistance within a downtrend. The 200-day moving average starts to flatten out. The price swings back and forth around the 200-day moving average. Advancing Stage: This phase is commonly known as breakout. When Buyer pressure is more than seller and leads to Up Trend and forms an Advancing Stage. Some Characteristic of Advancing stage: It occurs after the price breaks out of resistance in an accumulation stage. You’ll see a series of higher highs and lows. The price is above the 200-day moving average. The 200-day moving average is starting to point higher. Distribution Stage: This stage Smart money distribute away their position and anticipation for price to come lower. Some Characteristic of distribution stage: It occurs after the price has risen for the last five months or more (on the daily timeframe). It looks like a range market with obvious support and resistance areas in an uptrend. The 200-day moving average starts to flatten out. The price whips back and forth around the 200-day moving average. Declining Stage: This phase is commonly known as breakout. When Seller pressure is more than Buyer pressure and leads to Down Trend and forms a Declining Stage. Some Characteristic of Declining stage: It occurs after the price breaks out of support in a distribution stage. You’ll see a series of lower highs and lows. The price is below the 200-day moving average. The 200-day moving average is starting to point lower. Summary: The accumulation phase occurs after the price has fallen and looks like a range market within a downtrend. The advancing stage occurs when the price breaks out of resistance (accumulation phase). This is also known as the uptrend. A distribution stage occurs after an advance in price, and it looks like a range market within an uptrend. The declining stage occurs when the price breaks down of support (from the distribution stage), otherwise known as a downtrend.
NSE:NIFTYEducation
by kleympermina
9
Why Bank nifty fall today?? Hello Everyone, Here You can see on chart bank nifty today panic fall from top, but why??? last 2 days market in Bull run...then why panic fall today??? so, don't worry I am here for analysis why fall..... 1) First you see market fall continue previous days and made Triple Bottom on chart you can see, 2) Then market Next open Gap up and Continue move upside and you should see on daily chart first Big Red candle and next day open Gap up and closed previous day high, so well if you understand candlestick pattern so you know already right?? 3) And also Bottom trendline support.. 4) you see there is flag pattern and breakout and today open gap up(There are two chances market open gap down because fear of omicron virus and gap up because flag breakout and also had weekend so no idea Monday where open Gap up or gap down), so its better to no carry position on weekend if you want peace of enjoy so.. haha.. well its depended upon you 5) Now, market open gap up but where open?????? direct nearest use resistance major trendline.. if you know that so hope you did not take buy position otherwise you know what happen next... market open gap up and broken use resistance trendline, its impossible without and good news to support market but today no news and market respect resistance and panic fall.. my suggestion is only one if you don't know TA so first learn deeply, and do paper trading so that you understand market sentiment.
NSE:BANKNIFTYEducation
by POWER_OF_STOCK_ANALYSIS
The Types of Market Days - Ultimate guide to trading daysHi, today we are going to see one of the most important concepts for day trading. I have taken all the content from the book “Secrets of a Pivot Boss” and added illustrations and charts, so that you don’t have to read the book. I am merely a presenter of the original content written by Franklin Ochoa. But the charts and illustrations are all done by me (If you want to download the PDF version of this post, you can checkout the links below the post). There are six types of market days that we will cover. These types of days are repeatedly seen in the market, but no two days are ever identical. As such, these categories should be used more as guidelines, rather than seeing them as etched in stone. Again, your ability to recognize the pattern of the day accurately will be a huge step toward successfully engaging the market 1. Trend Day Exhibit: • The Trend Day is the most aggressive type of market day. • On a bullish Trend Day, the open usually marks the day's low, while the close usually marks the day's high, with a few ticks of tolerance in either direction. • On a bearish Trend Day, the open will usually mark the day's high, while the market will usually close near the session's low. • The market will typically start fast on this type of day and the farther price moves away from value, the more participants will enter the market, creating sustained price movement on increased volume. • Initiative buying or selling is the culprit on this type of market day, as these participants are confident they can move price to a new area of established value. • Price conviction is strongest during a Trend Day. Market will start strong right out of the gate and will usually maintain a unidirectional stance throughout the day, never calling into question the day's direction or conviction. • This type of day has the highest price range (high price minus low price), meaning it can be quite costly if you are positioned against the market or if you fail to recognize the pattern early enough to enter alongside the market. • These types of days only occur a few times a month, but catching these moves can certainly make your month, in terms of profits. • The Trend Day is usually preceded by a quiet day of market activity, which is usually a day with a small range of movement. Coincidentally, this type of market behaviour will usually follow a Trend Day as well. 2. Double-Distribution Trend Day Exhibit: • While this day is a trending day, it in no way has the confidence or conviction of a Trend Day. • Instead, this type of day is characterized by its indecisive nature at the outset of the session. • During this type of day, the market will usually open the session in a quiet manner, trading within a fairly tight range for the first hour or two of the session, thereby creating an initial balance that is narrow. • The initial balance is traditionally defined as the price range of the first hour of the day. • If the initial balance is too narrow, price will break free from the range and auction toward new value, creating range extension, which is any movement outside the initial balance. • After the initial balance of the Double-Distribution Trend Day has been defined, price will break out from the range and auction toward new value, where it will form a second distribution of price. This is the market's attempt at confirming whether new value has indeed been established. • Double-Distribution Trend Day opens the session quietly, trading within a tight range that can be viewed as the day's "warm up" period. Eventually, price breaks free of the range and begins trending toward new value, igniting initiative buying or selling. • Once the market finds new value, it then builds out another range before ending the day. • The ranges formed at both the beginning and end of the day is where the term "double-distribution" comes from, as the bulk of the day's volume resides at one of these extremes, essentially forming a double distribution of trading activity. • The initial balance is the base for any day's trading and is extremely important to the Double-Distribution Trend Day. • A narrow initial balance is easily broken, while a wide initial balance is harder to break. The fact that the initial balance is narrow on this type of day indicates that there is a good possibility of a breakout from the initial range, indicating that you will likely see a move toward new value. • The narrow initial balance at the beginning of the Double-Distribution Trend Day indicates that either buyers or sellers will eventually overwhelm one side or the other. • Once direction is decided, price will freely move toward a new area of value since it is being driven by initiative market participants. 3. Typical Day Exhibit: • The Typical Day is characterized by a wide initial balance that is established at the outset of the day. • On this type of day, price rallies or drops sharply to begin the session and moves far enough away from value to entice responsive participants to enter the market. • The responsive players push price back in the opposite direction, essentially establishing the day's trading extremes. The market then trades quietly within the day's extremes the remainder of the session. • The opening rally or sell-off is usually sparked by reactions to economic news that hits the market early in the day. This opening push creates a wide initial balance, which means the day's "base" is wide and will likely go unbroken. • A wide base during the first hour of the market will likely mean that the day's extremes will also remain intact, or unbroken. • During this type of day, you will usually see price trade back and forth within the boundaries of the opening range, as fair trade is easily being facilitated. 4. Expanded Typical Day Exhibit: • Similar to the Typical Day in that it usually begins the session with early directional conviction. However, price movement at the open is not as strong as that seen during a Typical Day. • The initial balance is wider than that of a Double-Distribution Trend Day, but not as wide as that of the Typical Day. Hence, it is susceptible to a violation later in the session. • Eventually, one of the day's extremes is violated and price movement is seen in the direction of the break, which is usually caused by initiative buying or selling behaviour. • During an Expanded Typical Day, both the upper and lower boundaries of the initial balance are susceptible to violations. On any given day, you will see one, or both, of the boundaries violated, as buyers and sellers attempt to push price toward their own perceived levels of value. 5. Trading Range Day Exhibit: • Both the buyers and sellers are actively auctioning price back and forth within the day's range, which is usually established by the day's initial balance. • On this day, the initial balance is about as wide as that of a Typical Day, but instead of quietly trading within these two extremes throughout the day, buyers and sellers are actively pushing price back and forth. • This type of day is basically like a game of tennis. The players stand on opposite sides of the court and take turns volleying the ball to one another throughout the match. • Likewise, buyers and sellers will stand at the extremes of the day and will enter the market in a responsive manner when price reaches the outer limits of the day's range. • Responsive sellers will enter shorts at the top of the range, which essentially pushes price back toward the day's lows, while responsive buyers will enter longs at the bottom of the range, which pushes price back toward the day's highs. • This type of market day offers easy facilitation of trade and gives traders amazing opportunities to time their entries. 6. Sideways Day Exhibit: • On this type of day, price is stagnant, as both buyers and sellers refrain from trading. This type of session usually occurs ahead of the release of a major economic report or news event, or in advance of a trading holiday. • There is no trade facilitation and no directional conviction. • The initial balance is rather narrow, which at first indicates the potential for a Double-Distribution Trend Day. However, the initiative buying or selling required for a Double-Distribution Trend Day never enters the fray, which leaves the market terribly quiet the rest of the session. • The Trading Range Day and the Sideways Day sound similar, but the difference lies within the participation levels of both buyers and sellers. So, with this, we are done with all types of the trading days. Remember, each of these types of days is not set in stone. While every market day is similar to a day from the past, similar does not mean "exactly." You must be able to snuff out the subtleties of each new day as it relates to a day from the past. Steadfast practice creates valuable experience. 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 to know that people are 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:NIFTYEducation
by johntradingwick
46
The Neckline has fallenA head formed on 18 oct 2021 with two shoulders. Left formed on 27 sept '21 making a high at 195.50, similarly right formed on 09 Nov '21 at 221.60. the neckline, however, is not so clear but somehow formed at 206.60 and tries to recovers at 207.10 with vol buying of 797.047 but utimately falls on 206.05 on 25th of nov. The record selling and short selling of 7.644 millions of shares was seems increadible. THE GAIN PERSPECTIVE An upward trend had been seen from 29th Nov to 06th of Dec with 66 positive bars and 8.48 % returns from the lows. the forward movement will be 7.06% to 7.15% if the base is taken as on 07th dec 14:15. NSE:INDHOTEL
NSE:INDHOTELEducation
by vigatsharma
Nifty! Will it make or break?Nifty has been in negative territory from past few days also forming a H&S pattern on the top, a highly traded pattern, for about 1000 pts. target which has been completed a few days back. Now, after a few days of pullback a negative candle is formed on last trading session it may continue the trend in the direction of the primary trend i.e. down. But, there's another probability of forming a double bottom as 17750-75 may act as a good support and can become a turning point for the NIFTY. Moreover, after a failure to sustain above 40 on the RSI range this time NIFTY has closed above 40 and its time too see if it sustains above ore not. All-in-all Nifty is in a no trade territory and best opportunity lies above 17450-17500 for longs and 16700-16775 for shorts and within this range any trades should be avoided as markets may be volatile and may hit SL's on both sides.
NSE:NIFTYEducation
by abhinavjain97
Island Bottom Chart Pattern An Island Reversal is a piece of price action that is completely broken off from the rest of the chart. It has a gap before it (Exhaustion Gap) and a gap after it (Breakaway Gap). A bullish Island Reversal starts with a down gap in a bear trend. After a period of sideways trading, the market gaps upwards to reverse the bearish trend. A bearish Island Reversal starts with an upwards gap, followed by sideways trading before reversing the trend . The first gap represents a climatic move aligned with the existing trend. However, instead of following through with the gap’s momentum, the market meanders. Hence, when the market makes a gap against the trend, it is a reversal signal. The logic behind this chart pattern is similar to the Morning Star and Evening Star candlestick patterns . How do we trade an Island Reversal pattern? For a bullish pattern, buy when price gaps up away from the Island. For a bearish pattern, sell when price gaps down away from the Island. For this chart pattern, volume should decrease for the first gap and increase with the second gap that is reversing the trend. For the target objective, measure the height of the Island and project it from the breakaway point
NSE:BANKNIFTYEducation
by PrasantaP
1
RSI RANGE SHIFT StrategyFor Beginners who don't know the real meaning of RSI RSI---RELATIVE STRENGTH INDEX As the name says it shows the strength of a particular stock or index. More the RSI more the strength RSI above 40 indicates very little strength 50/60+ RSI stocks indicates very good strength....But RSI above 80 indicates that the stock is little overbought and may consolidate but doesn't mean it will fall... RSI below 40 stocks should never be bought...RSI below 40 is oversold but the stock might not bounce back as the strength is weak...So buying a stock with RSI above 50/60 is the best and SHORT selling below 30/40 is the best option... RSI RANGE SHIFT STRATEGY: It's a simple swing trading strategy When RSI is falling and bounces back from 40...it is a buy for the stock once RSI is heading towards 60 It is a SHORT SELL if RSI 40 support is broken This strategy has to be combined with PRICE ACTION to get a good RISK/REWARD ratio. FOLLOW me for more such content ahead...Till then, HAPPY TRADING :)
NSE:NIFTYEducation
by keshevdugar
6