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Chart Patterns

Bullish Intraday Candlestick Patterns for StudyPatterns in Candlestick Charts Candlestick charts are an excellent way of understanding the investor sentiment and the relationship between demand and supply, bears and bulls, greed and fear, etc. Traders must remember that while an individual candle provides sufficient information, patterns can be determined only by comparing one candle with its preceding and next candles. To benefit from them, it is important that traders understand patterns in candlestick charts.
BSE:IDEAEducation
by Amey_Kadam
What are Falling and Rising Wedge Patterns?What Is the Wedge Pattern and Its Common Characteristics? 1. Wedge patterns have converging trend lines that come to an apex with a distinguishable upside or downside slant. a. Wedge with an upside slant is called a rising wedge b. Wedge with downside slant is called falling wedge 2. It has declining volumes as the pattern progresses 3. It breaks out from one of the trend lines Why We Should Pay Attention to Wedge Patterns? Some studies suggest that a wedge pattern will breakout towards a reversal rather than a continuation more often than two-thirds of the time. Therefore as the rule of thumb, people generally treat a falling wedge as a bullish pattern and a rising wedge as a bearish pattern , especially a falling wedge would be a more reliable reversal indicator than a rising wedge Since we know a wedge pattern has a higher probability to reverse and due to the fact that the price of wedge pattern converges to a smaller area, we can trade the reversal set up with a relatively close stop loss to its entry price, which provides us with a good trading opportunity with a decent Risk:Reward ratio. Examples of a Bullish Rising Wedge and Bearish Falling Wedge Sadly, there is nothing that works 100% in trading. Not every rising or falling wedge will reverse as one might expect. Every trader must properly manage their risk by setting stop losses and not just trading based on price patterns. Below are two examples. Bullish Rising Wedge ( ETHUSDT during 15/NOV/20 - 28/DEC/20) In the early stages of the epic 20-21 bull market, if traders blindly treat the rising wedge as a bearish signal and trade accordingly, they would pay a heavy price. Bearish Falling Wedge ( LTCUSD during 14/AUG/18 - 14/NOV/18) On the contrary, in the late stage of the 2018 bear market, any trader who blindly trades the falling wedge to bet on a reversal would also learn a hard lesson. Comment down your thoughts on Wedge Patterns in the comment section. Disclaimer: This is just an educational post. Never trade just any pattern. And please do your research before making any trades. Happy Trading!
Education
by Coinlog
4
WHY DO MOST RETAIL TRADERS LOSE MONEY?Let us find out the reason why retailers lose money year after year To find out that let's understand the 4 stages of any stock/index. --> STAGE 1: .This is the stage where accumulation of the stock by FIIs and DIIs takes place and the price trades in a range bound structure ( as shown on the chart ) where buyers and sellers are in equilibrium. .This stage might last for many months and in some cases years. .Most of the retail traders exit because of frustration before the big movement takes place. --> STAGE 2: .This is the advancing stage that starts after the breakout from stage 1 with a good volume. .The stock is bought at every dip and it heads higher forming a HIGHER HIGH and HIGHER LOW structure .Retailers exit on fear of losing the money earned. --> STAGE 3: .This is the distribution phase of a stock where FIIs and DIIs book profits and the shares are distributed to the retail traders. --> STAGE 4: .This phase starts after breakdown from stage 3. .The stock starts it's downtrend journey and at this stage many traders try to average the stock bought and therefore increasing the overall loss. I hope this post helped you in understanding one of the few ways to get out of the trap retail traders are in and start your journey towards becoming a successful trader. Thank You for reading with patience Till then, Happy Trading :)
NSE:NIFTYEducation
by keshevdugar
4
CIPLA Head & Shoulders pattern in formation?CIPLA is in the process of forming a Head and Shoulders pattern on the Daily chart. The left Shoulder and the Head are already complete we are possibly around the right Shoulder. If true, price can retrace to the baseline at 880. Trading here can be risky as we are in the middle of pattern formation and it may be invalidated at any point above right Shoulder. Only risky traders may enter short with stop above the right Shoulder. Otherwise better to let the pattern form completely and place trades then.
NSE:CIPLAEducation
by vipulmehta817
2
STOP-LOSS HUNT....What Is Stop Hunting? Stop hunting is a strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set stop-loss orders. The triggering of many stop losses at once typically creates high volatility and can present a unique opportunity for investors who seek to trade in this environment. -Investopedia. Who does this? Institutions that trade in large volumes. Technically, the script was trading near its supply zone. A breakout from this zone can be seen in the charts. But, just ahead of this breakout we can see a sharp sell-off almost taking the price to its demand zone. This sell-off would have encouraged more traders to sell or go short in their positions thereby creating huge liquidity for the institutions who wanted to go long or buy in large volumes (more sell orders from retail people - more shares available for institutions to buy). Immediately following this, we can see the script going up by 20% thereby giving losses to those who had short positions. The traders who had a long view would have lost because of the initial sell-off. The traders who had shorted would have lost because of the massive rally that followed the sell-off.
NSE:BALKRISINDEducation
by Stock-Holmes
Man Infra - Breakout & Volatality contraction My analysis is based on the Monthly chart. The monthly chart is considered ideal for long term investors and gives a directional perspective of the stock price. The stock is forming a double bottom pattern. Typically, a double bottom is formed after a single rounding bottom pattern is formed and is often an early sign of a potential reversal. According to Investopedia "Rounding bottom patterns will typically occur at the end of an extended bearish trend. The double bottom formation constructed from two consecutive rounding bottoms can also infer that investors are following the security to capitalize on its last push lower toward a support level. A double bottom will typically indicate a bullish reversal which provides an opportunity for investors to obtain profits from a bullish rally. After a double bottom, common trading strategies include long positions that will profit from a rising security price." Volume expansion can also be clearly seen as the candles are coming close to ATH (All time high). The ATH was in year 2010 and the stock has broken with a strong body candle and volumes after eleven years. If the period from January 2018 to July 2021 is observed carefully, there is volume contraction- this is a good sign. Relative Strength against CNX Infra index is outperforming since April 2021. This is another positive. Data from Screener.in shows that promoter has been increasing shareholding since September 2018 -from 63.13% to 66.10% in June 2021. Promoter buying is again considered a positive move. Entry strategy - now that the longer timeframe looks positive, we should move to the lower timeframe to get an entry. Here I will move to the Weekly timeframe and follow the Stan Weinstein framework. The stock has to be above the 30 Weekly MA, volume expansion must be clearly seen, range and body of weekly closing candle must be strong. Stock must be in HH HL structure. The stock fulfils the Stan Weinstein framework. If stock retraces and takes support within the 75-81 zone, that would be a good entry point to add from risk reward standpoint. Ensure volume does NOT expand when stock retraces. If you move to the Weekly timeframe, between the candles of 19 July 2021 to 30 August 2021 you will see a high tight flag (HTF) formation. The stock had run up approx. 86% between 19 April to 19 July 2021. HTF is a very rare pattern and forms in bull cycles and according to William O'Neil, HTF begins with a stock moving 100% to 120% in a very short time, usually four to eight weeks. It then corrects sideways no more than 10% to 25% usually in three to five weeks. It may not be HTF strictly by William O'Neil's definition, but the flag can be seen very clearly. Risk management is key in both investment or trading. If we see the current market cycle, NIFTY50 is forming newer highs. The rise has been unprecedented. This is fuelled by supply of money in the markets. What if in the near future money supply is chocked by tapering by FED or hawkish stance by MPC of RBI? In that case we will see a retracement even if the broader economy is doing well, structurally speaking. No one knows the future and hence a safer approach is to invest using a pyramid model i.e. take an entry when stock is just above the 50 Day MA with volumes above average and scale up. This could be an equal split, for example, 34-33-33 or 50-25-25. There is no hard and fast rule. There is a possibility that stock may shoot up after the first tranche and not give another opportunity to enter at retracement, but what is market turns against us? In that case our loss will be limited to the first tranche only. Disclaimer: I am not a registered investment advisor or analyst. This is not a recommendation to buy or sell. The purpose is to share with peer community and learn from the experts. For any investment or trading calls, please consult your authorised investment advisor.
NSE:MANINFRAEducation
by culturalDealer79974
One BO, different entries and it's psychology!As a breakout & retest is complete, it gives the best scenerio for entry with compliance to the rules of money management as RR ratio and position sizing are considered as major components while entring a trade for a trader. In this case, a low has been established at 665 which will act as a point for SL placement in the near future. Types of traders entering into this trade: #1. Agressive traders: These traders wait for a buyers candle to form after a retest on the trendline and as soon as the candle forms like in this case, a buy stop order at the high price of the candle is placed. This is a risky bet but this reduces the SL significantly while providing the best possible RR ratio for the position. #2. Conservative Traders: Here, as the breakout is complete and the stock establishes a High (in this case 739.85(Doji candle High)) and when the retest is done, these traders wait for the high (739.85) and place a buy stop order at this price giving the safest possible entry in theory. Though this distorts the RR ratio a little bit as SL remains the same but the probability for upside is high. This entry works on the Dow Theory as Higher Highs and Lower Lows starts to form which indicates bullish view. This is why it is said that trading is 20% execution and 80% waiting.
NSE:PRINCEPIPEEducation
by abhinavjain97