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Chart Patterns

ASIANPAINT: BEGINNING OF A DECLINE?EDUCATIONAL: Weekly chart is indicating topping out pattern BUT NOT YET CONFIRMED! Only when we have a nice red candle following soon, it will be confirmed. The daily chart has two red candles. It has dropped to less than 2% from lifetime high so surely it is too early to call for a correction but this scrip will be interesting to watch if further candles precipitate more price correction with increased volumes. The trigger for a big move can come suddenly, swiftly from anywhere. Worth watching...
NSE:ASIANPAINTEducation
by lokhandi
Understanding Price using Timeframes!Initial Understanding on Weakly TF: 1. Pattern: A clear Inverted H&S pattern is formed which took around 3 Years to form and that signifies entry in the Stage 2 i.e. Mark-Up. 2. Volume: Volumes has seen a drastic jump this year as compared to previous years, which again tells the presence of bulls. 3. Resistance Zone: A number of times resistance zone between 275 and 288 has been tested multiple times making it weaker and weaker. It is normally seen that when zones either support or resistance are tested multiple times, a break from the same results in great rally on a single side. 4. Moving Averages: After a bearish crossover completed in Oct-2018 the bear trend was established which was broken in Dec-2020 with a bullish crossover and rising averages indicating the trend shift from bearish to bullish. When the price broke and the candle is formed, there lies the two possibilities i.e. (a.) A successful BO (b.) A BO faliure A successful BO is confirmed only when the High of the alret candle is taken out, which here is done. Therefore, we can say a successful BO has been completed. It does not mean that it is sure shot rather the probability is in the favour of buyer. Daily Chart Trend Continuation With around 250 days of sideways momentum which also formed a right shoulder for the pattern on Weekly TF. Here, with mixed signals throughout the year no opportunity was given to the buyer to add shares in the portfolio but on Sept-1 a clear trend started to form indicated by rising EMA. This gave the confidence to add the stock into the watchlist and add some alerts to time the entry. Hourly Chart For entry A close above the short term trendline is the zone for entry. Here, the price is indicating all the positives for a successful BO as observed in the weekly TF.
NSE:KOLTEPATILEducation
by abhinavjain97
4
GBPJPY 275 pips winner 📈💰🤑Based on previous analysis of GBPJPY, the trade came out to be a winner. Target was 300pips but market printed 275 pips (satisfied). Usually I close my trade if the moment on intraday changes from the desired to unwanted, thst means in this case the desired momentum was bullish but at a certain time the market started rejecting download (bearish momentum establishment) so i close se the trade and take all the profits already made! Follow for more 📊 ALL THE BEST!
Education
by lofitrend
Where will nifty go?Ascending Triangle: An ascending triangle is a breakout pattern that forms when the price breaches the upper horizontal trendline with rising volume. It is a bullish formation. The upper trendline must be horizontal, indicating nearly identical highs, which form a resistance level. The lower trendline is rising diagonally, indicating higher lows as buyers patiently step up their bids. Eventually, the buyers lose patience and rush into the security above the resistance price, which triggers more buying as the uptrend resumes. The upper trendline, which was formerly a resistance level, now becomes support.
NSE:NIFTYEducation
by Spunkygamer
how rectangle pattern works ?rectangle pattern 1. price moves in range on side ways to form a rectangle pattern. 2. as a result , a firm resistance on upper side and support on lower side formed . 3. stock will have either a distribution phase or continuation phase till breakout of resistance or breakdown of support happens 4. an impulsive move at resistance with volume will suggest a breakout for steep , fast movement of the stock to next resistance levels . 5. an impulsive move at at support with volume will suggest a breakdown for steep , fast movement of the stock to next support levels . 6. trade setup : a.buy above resistance of rectangle pattern keeping support levels as stop loss . b.sell below support of rectangle keeping resistance level levels as stop loss . 7. mostly a tussle happens in between resistance & support for good period . and fast breakouts and breakdowns happens 8. usually volume will be dry during consolidation phase of the pattern . volume spike will happen at breakout / breakdown zone for trade confirmations. for education purpose cadilahc taken one hour time frame .... same applies for all times and tgts too.
CEducation
by HARMONICSANAND
5
What is Ascending Triangle?What is an Ascending Triangle Pattern? Ascending Triangle Pattern is a continuation pattern that means when it plays out it will continue the preceding trend. It is created by price moves that allow for an upper horizontal line to be drawn along the swing highs, and a lower rising trendline to be drawn along the swing lows. These two lines form an ascending triangle . Traders here usually watch for breakouts from upper resistance in ascending triangle patterns. How does the Ascending Triangle Pattern work? After the prior uptrend when investors try to book profits it creates a resistance that leads to a high supply zone . But due to the prior uptrend investors are still interested in the asset which leads to picking up in demand slowly, resulting in a rising trendline. Time in this phase is also a crucial element. The longer this pattern consolidates, the more chances it has to give a possible breakout to continue the uptrend. Why is the Ascending Triangle Pattern Unique? Ascending triangle patterns usually have a higher breakout success rate than symmetrical triangle patterns. In an ascending triangle , higher lows are constantly being built, which shows there is a strong demand for the asset. Role of Volume: Volume plays a major role in the completion of all major patterns. The horizontal trendline which acts as resistance can give spikes in volume . We will call it a breakout when a candle closes above horizontal resistance level with a great volume spike or rise in average volume . Above Chart Explanation: This is the 4H chart of FTTUSDT with a clear preceding upward trend. After the uptrend, we enter the second phase where the upper horizontal line becomes resistance 4 times in a row and the lower rising trendline becomes support 3 times in a row. As we have observed here FTTUSDT consolidated for nearly 1 month in an ascending triangle pattern, which finally led to a super bullish breakout. Two Possible Entries: Entry 1: On rising support, when the price touches the rising support trendline and if there is rising average volume , it makes a good entry with a stop loss placed below the previous higher low point. Entry 2: On resistance breakout, we should wait for the 4H candle to close above the resistance to confirm the breakout’s validity. Once the breakout is valid, a potential opportunity would be to enter at the close of the 4H candle with a stop loss placed a little below the breakout level. Usually, we should target the height of the triangle after the breakout. Comment down your thoughts on Ascending Triangle Pattern 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! PS we are posting this again for our Indian Audience.
Education
by Coinlog
14
A SYMMETRICAL TRIANGLE TRAP VARIATIONTriangles are one of the best continuation patterns. They are normally seen in the middle of a trend as the price halts and rebuild energy to resume in the direction of prevailing trend. In this particular variation shown on the chart, the price breaks against the trend. It would look like as if the pattern is about to fail but the breakdown ends up in a trap. It traps most short sellers on the wrong side of the market at 6. The price then shoots up with strong momentum leaving no choice for the short sellers than to cover their positions. So instead of only breakout buyers at 7, the variation will also trigger buy orders of trapped short traders. Due to large number of buy orders at 7 the price shoots up pretty fast without any major pullbacks. Its always good to keep such a strong weapons in your quiver and strike whenever the opportunity knocks. It needs to be pointed here that the pattern will lose its worth as the price drifts closer to the Apex. As a rule of thumb, If the price is beyond 3/4th the length of the triangle, as shown on the chart, the pattern should be traded with caution. If the price has drifted up to the Apex, then ignore the pattern and move on to a next one. The target for the triangle should be the height of the triangle from 1 to 2. This length measured above 7 will give us the target. Ex. If the distance between 1 to 2 is 50 points and the breakout 7 happens at say 550, then target will be 550+50 = 600 (just an example). This is a conservative approach. Some trades would like to hold it and trail their stop loss until they get stopped out. It all depends upon one's trading style. I hope the post would catch your interest. Do like and comment for more educational ideas in future. Regards JJSingh
NSE:NIFTYEducation
by Bravetotrade
2
How to ride on a swing trade ??? Ex :AMZNHow to ride on a swing trade? One good strategy in price action is to use 21 EMA and ride on swing trades for short or long terms. 21-day EMA can be called as the Goldilocks of all moving averages. 5,8,13 can be too tight and 50,100,200 are too loose for looking at moving averages, hence 21 EMA can be considered as a powerful average. In this strategy 21 EMA LOW and 21 EMA HIGH are plotted on the graph forming a channel. Any channel breakout up or down triggers a buy or sell respectively. The bar which detaches with the bar which pierced out of channel can be used as a buy or sell. Please remember this bar should be in the trend up or down respectively to the earlier bar which is piercing out of the channel and not at same levels. In uptrend, high of that second bar can be used to buy and in downtrend, low of the second bar can be used to sell. Put stop loss of one bar below for uptrend and one bar above for downtrend. Keep trailing as per the risk appetite. We can add during the trend when the candlestick bars touches the channel line and again detaches itself to follow trend, same second bar high should be used as explained earlier for buy or sell respectively. Keep raiding this trend until the bars touch lower channel in uptrend and upper channel in downtrend respectively. There are many ways to take profit as per your money management. Book profit at 1:2 or 1:3 or 1:4 etc as per the risk. One best way is to put trailing stop loss at high of every bar, it can also be at low but if the size of bar is big and in case of reversal of trend, that bar length of profit would be lost. If the bars are too big then half of the bar can be used for stop loss to average out of profit on reversal. If the bars are far away from channel profits can be booked. This works very well for 1 hour and above time period. Certain stocks may not fall into this strategy due to way they operate or may very rarely follow the above 21 EMA channel pattern. Above chart is an example and we tried to put strategy as simple as we can. Exceptions to strategies will always be there, so please back test as much as you can to understand this method. Hope this helps to gain a bit of knowledge! Please press like or thumbs up button, if you like this strategy, Thanks
NASDAQ:AMZNEducation
by AdhigamaTrading
2
Importance of Multiple Confirmations-Indicator Free AnalysisIndicator Free Analysis with Fibonacci Ratio Integration: The above is a daily chart of Alkyl Amine, a quality monopoly stock with clear cut competitive edge in its respective industry. We can observe that a previous resistance was present at 4000 levels which was broken with big bullish harami green candles accompanied with volume. A basic rule of chart analysis is whenever a stock breaks out of its resistance, the resistance is transformed into a support. Thus the stock again comes back to the resistance level in order to check if it has turned into support. This is called retest or throwback. Here the stock has tested the 4000 levels 2-3 times and is now trying to head upwards. In addition, if we draw a fib chart, we can see that the stock is taking support at the 0.618 levels which can be regarded as ultimate support zone. We can also observe that a bullish Flag and Pole is formed which indicates upmove How to trade the stock? The stock can be traded in two ways depending on one's risk appetite and experience. Entry: For risky and experienced traders: They can enter the stock after a bullish candle (such as that of today is formed) is formed with a SL below 3900. For safe traders: They can enter the stock as soon as the stock gives a breakout above the flag i.e. formation of a bullish green candle with closing above flag. Benefits of early trade: By entering early, the experienced or risky traders decrease their stoploss to a great margin. Thus it is possible for them to re-enter if the stock hits the StopLoss and again moves up. Benefits of Confirmed Trade: By entering after the breakout and retest of the Flag pattern, a safe trader increases the probability of success to a great extent. Where should the target be? The target should be the tip of the Flag i.e. 4750. Where should be the Stop Loss? For the early entree, the Stop Loss should be just below the support trendline of 4000 i.e 3900 For the safe trader, the Stop Loss should be placed just below the upper trendline of the Flag i.e. around 4100-4150 Hope you all learnt something..Support me by sending some cheers and liking all my ideas .
NSE:ALKYLAMINEEducation
by tksthathachari
3
What Is Quadruple Witching? What Is Quadruple Witching? Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. This happens in the US market but since the US market affects the markets worldwide, hence it becomes an important event for all other markets too. Highlights: • Quadruple witching refers to a date on which derivatives of stock index futures, stock index options, stock options, and single stock futures expire simultaneously. • It occurs once every quarter, on the third Friday of March, June, September, and December. • Quadruple witching days witness heavy trading volume, in part, due to the offsetting of existing futures and options contracts that are profitable. Triple/Quadruple Witching Dates 2021: • March 19, 2021 • June 18, 2021 • September 17, 2021 • December 17, 2021 Triple/Quadruple Witching Dates 2020: • March 20, 2020 • June 19, 2020 • September 18, 2020 •December 18, 2020 If you go and analyze S&P 500 index, in the 15 days before and after quadruple witching day, there are 59 events from 2006 to 2021. The S&P 500 typically rallies from the 6th day before to the day before quad witch day. It is evident that the market typically declines on quadruple witching day itself. A similar pattern can be seen in the case of Nifty. In the majority of the cases, the Nifty starts falling from a few days just before quadruple witching day. You can see the chart above to see the effect of Quadruple Witching on NIfty since the last year. So, it is advised to stay cautious in the next week. Be careful with your positions. Good luck, stay safe! Disclaimer: This is NOT investment advice. This chart is meant for learning purposes only. Invest your capital at your own risk.
NSE:NIFTYEducation
by johntradingwick
6
Indicator Free Analysis of Rounding Bottom Pattern- A Case StudyThe above chart is that of a Weekly Timeframe. Here we can see that a Rounding Bottom is formed at the top of Reliance when it is trading at all time high. Why a Rounding Bottom is formed? A rounding bottom marks a struggle between buying demand and selling pressure that is almost equal. In the first part of the formation, the sellers overpower the buyers thus bringing down the prices sharply until both buying and selling pressures equalize giving rise to a flat horizontal bottom. Eventually the buyers reappear and the stock edges higher. However the upward movement is not smooth and is riddled with several sharp upspikes accompanied by down spikes. As the stock reaches the previous high/ resistance, the selling pressure resumes and pushes the stock a little bit lower giving rise to a small handle i.e. forming a cup and handle pattern. However a cup may not be always formed. What does the Rounding Bottom Represent? A Rounding bottom can generally be seen as a form of consolidation after a strong bullish or bearish trend. What does the Rounding Bottom lead to? A Rounding Bottom can signal 2 changes in the stock: Continuation or Reversal. In most cases, it signifies continuation of the trend. Rounding bottom as a continuation pattern is mostly true for bull run. It signals reversal mostly in cases of bear run. However reversals are rare in Bull runs. How to Trade a Rounding Bottom? (Trading Psychology and Strategy) We shall discuss about the Trading Strategems keeping the above example as focus. We can observe that the previous trend was a bullish trend. Hence the Rounding Bottom formed in the chart is most probably a period of consolidation. The Rounding Bottom formation has formed over a period of 1 year. The recent weekly candle was a strong bullish green candle (Marubozu Candle) which has closed above the left lip of the rounding bottom/ previous high of the pattern. This shows a clear breakout scenario. Where to Enter? We can enter at the present market price of 2380-2400 . Where should be our Stop Loss? Our ideal Stop Loss should be below the recent swing i.e. around 2000-2100 . If the stock forms a handle, then our stop loss should be below the handle. What should be our target? In case of a Rounding Bottom Pattern or a Cup & Handle Pattern, the target can be gauged from the depth of the cup or rounding bottom. Here the depth of the rounding bottom comes to around Rs 550- Rs 600. Hence the target should be Rs 550- Rs 600 from the breakout levels of 2385 i.e. our target should be between Rs 2850-3000. Important Points to Remember: 1. Use or prefer weekly charts for identification of rounding bottoms since these patterns are formed over a long period of time. 2.Prefer trading the roundin bottoms in a bull market of if the previous trend of the stock is bullish since there is a higher rate of success and lower chances of breakout failure. 3. Try to select patterns whose breakouts are near all time high or year high. 4. The target is generally reached between 4 to 5 weeks into trade. Thus profit should be booked timely. However one can wait for long term targets to be achieved. 5. Prefer those patterns where the breakout occurs with good volume in a bull market with a clear cut breakout (like here the breakout was given with a strong Marubozu candle with good volume). Contribute to my efforts with cheers and coins (lol) if you learnt something valuable. Hope you guys learn and trade responsibly only after understanding the mechanics behind the pattern. Always try to keep the analysis simple and devoid of indicators. Indicators should only be used as supplementary tools for additional confirmation and not absolute trading tools. Maintain a strict SL to restrict and minimize your losses. Credits - Encyclopedia of Chart Patterns (2nd Edition) by Thomas N. Bulkowski Thank you.
NSE:RELIANCEEducation
by tksthathachari
3