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Chart Patterns

A 50-day moving average (50 DMA/SMA/EMA)A 50-day moving average (50 DMA) is a technical indicator that shows the average closing price of a security over the last 50 days. It's a popular indicator because it's realistic and effective at showing historical price movement trends. Concept of 50 Moving Average 1. Entry - Candle crossover 50 MA: This refers to a situation where the closing price of a candle crosses above the 50-period moving average line. When the candle's closing price moves from below the 50 MA to above it, it indicates potential upward momentum in the price action. This could signal a bullish trend or a potential buying opportunity. 2. Exit: - Distance between 50 MA and Candle: This involves monitoring the distance between the closing price of the candle and the 50-period moving average. If the distance becomes significantly large, it may indicate an overextended market and a potential reversal. Traders might consider taking profits or preparing for a reversal signal. - Candle crossunder 50 MA: This occurs when the closing price of a candle crosses below the 50-period moving average line. It suggests potential downward momentum in the price action. This could signal a bearish trend or a potential selling opportunity. 3. No Trade Zone (Sideways): - Use Box Breakout Strategy: In a sideways or ranging market where the price moves within a defined range, a breakout strategy can be employed. A box breakout strategy involves identifying a range-bound market where the price oscillates between a support and resistance level (forming a box-like pattern). Traders look for breakouts above the resistance or below the support level to initiate trades. This helps avoid trading during periods of low volatility and indecision, typical of sideways markets, and instead focuses on capturing potential momentum during breakout movements.
NSE:NIFTYEducation
by NaveenTTR
Index Trading-Follow EMA Crossover strategyI have been following the simple technique of Daily EMA Crossover for my long & short trades-especially for Trading NIFTY& BANK NIFTY -Choose 15 Min Timeline -Plot 4EMA viz 10/20/50/100 -Initiate long Trade when 10DEMA decisively crosses above all other DEMA Viz 20/50/100-which is known as Golden cross over -Similarly initiate short trades while the 10DEMA cuts below all other moving averages viz.20/50/100-Death Cross over By following the above simple technique we will be able to make good profits as well exit at the optimum levels. If you go thru the recent NIFTY Chart its quite evident that even when NIFTY was trading at 22400 levels,10DEMA Cross over below other DEMAs on 11th March generated the 1st sell signal. Decisive 10DEMA Cross over below 20/50/100 DEMA on 13th March,2024 while NIFTY was trading at 22340 levels confirmed the downfall.Had you initiated a sell signal at this signal its an easy 500 Points profits within a span of 5 days-Isnt it a decent profits ?Trade with levels and follow the trend always.If you feel its of use may send a thank note.Happy Trading(ONLY FOR EDUCATIONAL PURPOSE ONLY)
NSE:NIFTYEducation
by CSB68
5
#StopLoss : The Safety Net You Need#StopLoss : The Safety Net You Need Ever danced with volatility? Without a stop loss, it's like tightrope walking without a net. Here's why it's a MUST: ✅ Protect Your Fund: Keep that hard-earned Money safe ✅ Sleep Tight: Close your eyes without the market nightmares ✅ Plan Your Exit: Know when to bow out gracefully. Remember, it's not just about making money; it's about keeping it too. Like/Share if you also Agree with my Post.
Education
by CryptoPatel
1
Double Bottom & Double Top Patterns and How To Trade Them👋 Hello Trading community and my friends so today i came here with an educational post hope you like my work mates, In technical analysis quite often we hear about Double bottom and Double top patterns so today i am sharing that in very simple and easy to understand way. Although a lot can be understood from the idea's image alone but for those who are new to technical analysis i am explaining them by the description below. ⚪ Double bottom pattern-: It is a bullish reversal pattern that typically occurs at the end of a downtrend. It consists of two distinct lows at approximately the same price level, separated by a peak in between. Here's how you can identify and trade on a double bottom pattern: ⭐️Identify the Pattern- Look for two consecutive troughs (low points) in the price chart, with a peak (high point) in between. The lows should be roughly at the same price level, forming a "W" shape. ⭐️Confirmation- After identifying the double bottom pattern, it's important to wait for confirmation before entering a trade. Confirmation can come in the form of a breakout above the peak that separates the two lows. This breakout should ideally be accompanied by an increase in trading volume, signaling strong buying interest. ⭐️Entry- Once you have confirmation of the pattern, you can enter a long (buy) position. Some traders prefer to enter immediately after the breakout above the peak, while others wait for a pullback to the breakout level before entering to improve risk-reward ratios. ⭐️Stop Loss- So there are no particular definition of stop loss after the activation of trade because it totally depends on a trader's setup some takes below resistance close or trigger basis and some can take below the recent swing low and maybe there are some more ways too. ⭐️Target- Determine a target price based on the height of the pattern. Measure the distance between the lowest point of the double bottom and the peak, and then add this distance to the breakout level. This gives you a potential target for your trade. ⚪ The double pattern-: it is another common technical analysis pattern observed in financial markets, often signaling a potential reversal of an uptrend. The double top pattern typically occurs after an extended uptrend in the price of an asset. ⭐️Identify the Pattern- It consists of two consecutive peaks (or tops) at approximately the same price level, separated by a trough (or valley) in between. The peaks resemble the letter "M" on the price chart. ⭐️Confirmation- Traders typically look for confirmation signals to validate the pattern, such as a break below the trough between the two tops, increased volume during the breakdown, or other technical indicators like bearish divergence on oscillators such as the RSI or MACD. ⭐️Entry- Enter a short trade after confirmation, preferably when the price breaks below the trough between the two tops. Some traders may wait for a pullback to the breakdown level before entering to improve risk-reward ratios. ⭐️Stop Loss- So as i said above for the double bottom stop loss now telling the same for it too that it depends on trader to trader setup that some can take stop loss above resistance on closure or trigger basis and some can take above recent swing high likewise. ⭐️Target- Set a target for your trade based on the height of the pattern, which is the distance between the peak and the trough. Additionally, consider other support levels or Fibonacci retracement levels as potential targets. ⭐️Remember that no trading strategy is foolproof, and it's essential to combine the Double bottom & Double top patterns with other forms of analysis for better accuracy and risk management. ⭐️Risk Management- Always manage your risk by sizing your position appropriately and setting stop-loss orders. Additionally, consider the overall market conditions and use other technical indicators to confirm your trade decision. As always, combining technical analysis with proper risk management and market understanding is crucial for successful trading. ⭐️Exit- Exit the trade when your target is reached, or if the price shows signs of reversing. Pay attention to other technical indicators or chart patterns that may suggest a change in market sentiment. My Setup-: So after the confirmation usually i take retest entries to minimize my risk for these type of trades and somehow retests gives me more confirmations too of the strength of breakout, And one more thing i use and that is RSI indicator with default settings for these type of trades provided by Trading View so thank you very much to them. Stop loss i take on closing basis above or below on support and resistance. This is educational post so no logic to update this idea but still then if i will get any good example i will provide that via update. Thanks for reading and giving your valuable time. Best Regards- Amit “I get real, real concerned when I see trading strategies with too many rules (you should too).” Larry Connors
Editors' picks
NSE:NIFTYEducation
by AMIT-RAJAN
14
A-Z About HEIKEN ASHI CandlesticksHEIKEN ASHI Strategy: 1.INTRODUCTION (WHY HEIKEN ASHI CANDESTICKS) Often trading on the trend gets difficult due to price action that makes trader exit trades early. (USELESS NOISE FORMED BY TRADITIONAL CANDLES) This mainly happens due to impact of one single candle or bar on Trader’s ability to hold positions. Through Heiken Ashi Candles , this problem is largely solved as Price Trend is clearly represented through these. LOOK at the difference between TRADITIONAL and HEIKEN-ASHI Candlesticks below: A) TRADITIONAL candlestick with a lot of noise during uptrend and downtrend which confuses most of the traders and forces them to exit early B) HEIKEN-ASHI with a smooth buttery experience while trading: -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2.TYPES OF CANDLES Let us now come to the types of Heiken Ashi candles. In this chart, I have done 5 markings to explain the various types of candles in Heiken Ashi. a)The wide range yellow/green candles indicates good momentum and shows the stock shall be bullish for some more days unless and until there are signs of reversals b)The small body green/yellow candles represents the continuation of the trend although they show that the stock is not very bullish but is bullish c)SPINNING TOP- is formed when the body of the candle is very small (NOT A DOJI) and there is wick equal on both upper and lower side. d)The wide range red candles shows weakness in the stock e)INDECISIVE Candles- are formed when it is neither of the above candles (small body and irregular size wicks on up and down side) Always remember, size of body, shadows, and range of candle determines whether it Is bullish, bearish or neutral candle Do read futhur to understand -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 3) KEY RULES to follow There are broadly 5 rules that need to be followed when trading with Heiken Ashi Candles. DO HAVE A LOOK AT THE CANDLES SIMULTANEOUSLY Rule 1 – Green candles with no lower shadows indicate a strong uptrend: When you spot these on charts, be in the trade and don’t think about profit booking. You might want to add to your long position and exit short positions. Rule 2 – Candles with a small body with upper and lower shadows indicate trend change: These are indecision candles and require more confirmation. Rule 3 – Red/Black candles with no upper shadow indicates strong a downtrend: When you spot these on charts, be in the trade and don’t think about profit booking. You might want to add to your short position and exit long positions Rule 4 – Candles with long lower shadows represent Buying interest. Always take note of these candles and assess price action after you spot these candles. Rule 5 – Candles with long upper shadows represent selling interest and be cautious with existing long positions if you spot such Candles. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 4) INITIATION AND CONTINUATION: You just need to know 2 types in trend analysis 1.INITIATION CANDLE 2.CONTUATION CANDLES 1.Initiation candle is one that sets the tone of Trend and defines underlying momentum for price. This is why Initiation candles are most important in Trend Analysis and Price action trading. 2.Continuation candles are ones that reaffirm the direction of trend and are useful to increase positions in the direction of trend. FREE TIP: When you begin price trend analysis, always look for initiation Heiken Ashi candles and then look for continuation candles. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 5) IDENTIFYING STRONG TRENDS: In the chart below, let us see how a strong Up/Down trend looks like. In Heiken Ashi, we should be measuring strength of move based on Initiation Candles (Candles that represent strong trend). If you look at the chart, all markings that I have done are that of Strong Initiation candles on the downside and upside (BUY/SELL) When such candles are visible on the chart, invariably Price tends to move up/low. Always keep range of Candle in mind. It should be wide with no upper/lower shadows for uptrend and downtrend respectively. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 6) COMMON MISTAKES Most Common mistake when using Heiken Ashi Candles is to Enter or Exit Trades based on the color of Candle. Most beginners commit this mistake and this should be avoided at all times. Whether it is Heiken Ashi Candles or any other charting method, you need to understand the overall Market Trend and Context. Without this, you will find it difficult to Trade successfully over a longer period of time.(PRICE ACTION IS THE KING) This is just an additional filter like an indicator and should not be treated as the only parameter in your strategy...If trading was so easy then 90% wouldn't have lost their money in trading...Trading is like cooking you need to add the right ingredients in the right amount to taste a dish good.A pinch of salt less can ruin the entire hardword behind making the dish...Similar is trading...Will make a tutorial on risk management as well...Do let me know if you are interested only then it would be wise for me to proceed ahead. One of the main things you have to do is to analyze which candles contribute to Trend and which do not. This effective way of filtering out relevant candles from non relevant one’s is what will help you succeed with Heiken Ashi Candles. FREE TIP:(SAVES TIME DO READ) Always divide your Candles into two types; 1.Candles that have impact on Trend 2.Candles that have no impact This way, you will know which one’s to be focussed upon. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 7)DISADVANTAGES: EVERY + HAS A - ELSE EVERY TRADER WOULD HAVE USED THIS STRATEGY TO MAKE TONS OF MONEY EVERYDAY The one main disadvantage that most traders refer to is that by the time Traders take positions based on Heiken Ashi Candles, the entire move is already over. While there is some merit to this, it is important to note that this mainly applies to short time frame charts. On higher time frame charts (30 Min to Monthly time frame), Heiken Ashi has tremendous benefits and Traders should try and incorporate these in their Trading arsenal. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- I hope this tutorial as helpful for you to understand some basics of HEIKEN-ASHI candlesticks...There are many other types of candlesticks which have their own importance like RENKO and PnF candlesticks...Do let me know in the comments whether I should make posts on STOCKs that I Trade/EDUCATIONAL posts like this FOLLOW me for many more such content ahead...DO hit the like button...Till then, HAPPY TRADING :)
Editors' picks
HEducation
by keshevdugar
166
NIFTY 50 profitable trades on 1/3/24Opening: The nifty futures opened almost flat (GAP is the adjustment) and formed a BIG bull bar as the 1st bar indicating a bullish strength which was confirmed as bears weren't able to pullback to the MA even after 20 bars Mid day and closing: The market behaved like a typical bull trend day closing near it's high PROFITABLE TRADES: One good trade which i spotted and took was at around 20 bars after the open whose logic is shown below in the image 1. HAVE ANY DOUBT RELATED TO THE TRADE ANALYSIS ? FEEL FREE TO COMMENT DOWN BELOW Till then, Happy Trading
NSE:NIFTY1!Education
by keshevdugar
Unveiling the Intriguing Intraday Patterns of NIFTY on 29 Feb 241.Opening Range:The market opened flat with first few candles indicating that today might have two sided trading and the market was two sided in a trading range as the opening range suggested 2.Mid Day and Closing:The market consolidated and gave a closing at around the top of the range which is a typical monthly expiry day... Patterns which were tradable: Only 1 good trade was seen today as per my analysis which came in the opening hour 1. The market formed a wedge pattern on the open with the 2nd bar being the first leg down bars 5,6,7 being second leg down and bar 10 as the start of leg 3 after 2 buy climax bars adding double confirmation... ANY DOUBTS RELATED TO PATTERN COMMENT BELOW I WILL BE READY TO HELP YOU GUYS!!! Whether you're a seasoned trader or a curious observer, dissecting these intraday patterns offers valuable insights into market dynamics and potential trading strategies.Would you like to see more posts like this, or do you have any suggestions for changes or improvements? Your feedback is invaluable in shaping our future content! Let us know in the comments below Happy Trading!!
NSE:NIFTYEducation
by keshevdugar
How to find a BREAKOUT that has a high probability of success?The probability of a breakout getting failed is much higher than it's success rate.(A STOCK AT REST TRIES TO BE AT REST AND THE ONE IN MOTION TRIES TO BE IN MOTION like NEWTON's First Law Of Motion) But breakout trades are the most rewarding trades in stock market. So...if there was a method to find out a high probable successful breakout then it would have been a shade better to make money in the stock market. Here I am with a tried and tested strategy to differentiate a fake breakout and a successful one: FOLLOW the below steps: 1.Choose a stock from an up-trending sector (At present sectors like ENERGY, PSUs, REALTY, FINANCIALS AND AUTO (Just started) are examples of up-trending sectors). The reason for choosing a sector which is up-trending is that the liquidity is high in those sectors and thus increases the chance of the breakout by one shade. 2.The stock should be above 50 week EMA and above 200 EMA on a daily time frame and RSI should be above 60 (In daily time frame) This is the reason why HEROMOTOCORP Trade is struggling a lot as it is below EMA 200. 3.The stock should breakout from a consolidation of STAGE 1 structure. And if the stock is in prior uptrend followed by a consolidation and then a breakout again increases the chances like the recent one in RELAXO FOOTWEARS. 4.If the stock breaks out of multiple patterns like INVERTED HEAD AND SHOULDERS,TRIANGLE,STAGE,PARALLEL CHANNEL,TRENDLINE(The more the number of patterns being broken the better the breakout is) One example of this is TRIVENI ENGINEERING Trade that I shared 5.The breakout should be backed with high volumes (AT LEAST EXCEEDING 20 MA) 6.The closing of the breakout should be strong (NO long wicks) One more example I have is of INDIAMART Trade that I shared applying most of the concepts discussed above. NOTE: The above discussed method only increases the probability of a breakout to be successful as no strategy in the market gives 100% successful trades, so managing the risk is as important as the strategy and I will post a tutorial soon for this also. FOLLOW me to stay updated as soon as I upload it here. Till then, HAPPY TRADING :)
Editors' picks
NSE:GRSEEducation
by keshevdugar
119
Unveiling the Intriguing Intraday Patterns of NIFTY on 28 Feb 241.Opening Range:The market opened flat with first few candles indicating that today might have two sided trading and then after forming a DOUBLE TOP BEAR FLAG as indicated in the below posts of 5 min NIFTY FUTURES chart it broke the opening range and this started a meltdown 2.Mid Day and Closing:The market gave a strong breakout around opening hours and the breakout was very strong to continue it to the close Patterns which were tradable: 1. A double confirmation after DOUBLE TOP bear flag and a failed attempt by the bulls to defend the sell off.... 2. In this chart the bears formed a higher high double top with the resistance level of the previous strong sell off...When the trend is clearly down just look for signals to sell not to BUY as the bears will try to shport every rise and the bulls will give up easily... ANY DOUBTS RELATED TO PATTERN COMMENT BELOW I WILL BE READY TO HELP YOU GUYS!!! Whether you're a seasoned trader or a curious observer, dissecting these intraday patterns offers valuable insights into market dynamics and potential trading strategies.Would you like to see more posts like this, or do you have any suggestions for changes or improvements? Your feedback is invaluable in shaping our future content! Let us know in the comments below Happy Trading!!
NSE:NIFTYEducation
by keshevdugar
2
Unveiling the Intriguing Intraday Patterns of NIFTY on 27 Feb 24Are you ready to delve into the captivating world of intraday trading? On February 27, 2024, the NIFTY 50 index showcased some fascinating patterns that kept traders on the edge of their seats. Here's a quick rundown: 1. Opening Range: The market opened flat with first few candles indicating that today might have 2 sided trading... 2. Mid Day and Closing: The market gave a strong breakout around mid-day and the breakout retested the mid point of opening range and closed at around the upper half of the trading range... Patterns which were tradable: 1. Green line shows entry price and targets are around 1:2 RR 2. Red line shows the entry price with targets of 1:2 RR ANY DOUBTS RELATED TO PATTERN COMMENT BELOW I WILL BE READY TO HELP YOU GUYS!!! Whether you're a seasoned trader or a curious observer, dissecting these intraday patterns offers valuable insights into market dynamics and potential trading strategies.Would you like to see more posts like this, or do you have any suggestions for changes or improvements? Your feedback is invaluable in shaping our future content! Let us know in the comments below Happy Trading!!
NSE:NIFTY1!Education
by keshevdugar
2
COAL INDIA. A Case Study.Hi Everyone! I hope you all are fine. Today I have brought an interesting Price Action case study of Coal India. Although the chart is self-explanatory, I will mention some key points. 1 . Always watch Support and Resistance—the basics of Price Action. 2. If the price goes too far away from the moving average(in either direction), be cautious, as sooner it will converge towards the Moving Average. (See MG-1 and MG-2 and the CMP currently.) 3. If the trade opens at a Gap, either down or up, sooner or later, the Price will fill the Gap. (Again, be cautious) 4. If you are confident about a Trade, you can enter it even if you are late. (I entered at the point where the Blue line is shown). The stock is performing Fundamentally well too, but I have skipped that part for now. I hope you like it. Happy Investing. This was for Educational Purposes only.
NSE:COALINDIAEducation
by azuriste
Understanding Reversal Zones (Buying at Bottom) 1. Supply & Demand Zones. 2. Support & Resistance. 3. Bullish & Bearish Order Blocks. as shown on main chart. Like other technical knowledge, This also are not a holy grail. It can only assist you in building a good strategy. You can only succeed with proper position sizing, risk management and following correct trading Psychology (No overtrade, No greed, No revenge trade etc). ABOVE SHARED EXPLANATIONS ARE ONLY FOR EDUCATIONAL PURPOSE ONLY. YOU MAY PAPER TRADE TO GAIN CONFIDENCE AND BUILD FURTHER ON THESE. This is for educational & papertrading Purpose only. please consult your financial advisor before investing. We are not SEBI registered.
NSE:BAJAJ_AUTOEducation
by MasterTrader1949X
breakout trading !In technical analysis, a breakout refers to a substantial price movement of a financial instrument, such as a stock or commodity, surpassing a specific level of support or resistance. This occurrence is of paramount importance, as it frequently signifies the initiation of a new trend, offering traders and investors valuable insights for informed decision-making. Outlined below are key aspects related to breakouts in technical analysis: Definition: A breakout occurs when the price of an asset surpasses a well-defined level of support or resistance. The breakout can manifest as either an upward movement (bullish breakout) or a downward movement (bearish breakout). Significance: Breakouts carry significance as they indicate a shift in market sentiment, suggesting that the prevailing trend may be weakening or reversing, potentially giving rise to a new trend. Types of Breakouts: Bullish Breakout: This occurs when the price surpasses a resistance level, signaling potential upward momentum. Bearish Breakout: In contrast, a bearish breakout happens when the price drops below a support level, indicating potential downward momentum. Volume Confirmation: Successful breakouts are often accompanied by an uptick in trading volume, serving as confirmation of the robustness of the new trend. Volume analysis is instrumental in validating the legitimacy of the breakout. False Breakouts: It is important to note that not all breakouts lead to sustained trends. False breakouts can occur, wherein the price briefly breaches a support or resistance level but subsequently reverses. Traders commonly employ additional technical indicators or await confirmation before acting on a breakout. Measuring Target: Traders frequently use the height of the pattern preceding the breakout, such as a triangle or rectangle, to estimate the potential price target. This aids in setting profit targets. Common Chart Patterns Leading to Breakouts: Triangles: Symmetrical, ascending, or descending triangles often precede breakouts. Head and Shoulders: Both inverse and regular head and shoulders patterns can signal potential breakouts. Rectangles and Flags: Consolidation patterns like rectangles and flags can lead to breakouts. Role of Trendlines: Trendlines are commonly employed to identify potential breakout points. The intersection of a trendline with a support or resistance level is deemed a critical zone for a potential breakout. Risk Management: Traders typically incorporate risk management strategies, such as setting stop-loss orders, to safeguard against false breakouts or adverse market movements. In summary, breakouts in technical analysis are pivotal events offering valuable information to traders and investors about potential shifts in market trends. Effective breakout trading strategies involve confirmation, volume analysis, and meticulous consideration of various chart patterns.
NSE:MPHASISEducation
by pratik2358
2
A subset breakout pattern Observed a subset of the vcp/breakout pattern that's worked for me a few times. 1. Stock needs to be in an uptrend. As in the 10sma, 20sma, 50sma are all stacked and rising. 2. Price forms a "hump" 3. A shakeout at the end of the hump. Shakeout candle at minimum goes below 20sma, but closes in green at eod. 4. Next day breakout with huge volume. Try and get in about 5%-6%, before it runs away. Traded it a few times. Specifically BSE on 1st Dec 2021. Seems good for 4-5days swing trading. Also, the setup doesn't seem to occur too often. The hump-breakout occurs quite often, but this hump-shakeout-breakout doesn't. The shakeout I believe makes weak hands exit, so the reliability is probably better. So that's the edge. And, if this seems like a no brainer setup I apologize.
NSE:ALBERTDAVDEducation
by traderz101
1
Simple Combination of Price Action and Oscillator for Breakouts.👉 Introduction Breakouts are crucial in trading because they offer opportunities for quick gains through momentum. However, trading breakouts can be challenging. Around 80% of breakouts fail due to market inertia—where markets tend to continue their existing behavior. When a range attempts to break a comfort zone, some participants defend their positions, causing temporary failure. But remember the fundamental nature: a range will eventually convert into a trend, and a trend will eventually revert to a range. The Problem:- How Does A Breakout Fail? If you know how a breakout fails then there may be some chance that you can avoid trading those setups. 🗯Let's look at the first chart of BECTORFOOD on a daily time frame, A two-month-long ascending triangle range has been formed With a horizontal resistance of 1250. 1. There are good reasons to trade the breakout. a. An ascending triangle is an inherently bullish pattern. b. The resistance is strong and very good to trade its breakout. c. Volume was high before the breakout candle a good confirmation. Still the breakout field why? 2.Volume Action Factor 👉Let's look at an hourly time frame, On 7th of February Price opened slightly gap up on good volume but the candle was not able to sustain the high, and then the price attempted to break the resistance again at the closing of the session but again bears pushed price down with high volume. 👉The next day Price went above resistance On dry volume and then the sell-off started. 3. Oscillator confirmation Factor 👉Oscillators work well in the range bound market it shows the upper and lower range movement. 👉If you look at the chart the price was making a new high but the RSI was forming a bearish divergence (marked by a red dashed line ), and it hit the overbought zone before the breakout. 👉The stochastic was also in the upper zone before the breakout indicating a peak of price movement. 4. Broader Market Factor. 👉Let's compare the movement with the broader market direction, On the 7th of February the NIFT50 index started to sell off there was pressure building from all-time high resistance. 👉So the BECTORFOOD also followed that move and fell more than the index. One More Example:- 👉DHANI SERVICES chart, A clear resistance zone formed at 44.70 but if you see on the chart the oscillators got overbought On daily and hourly timeframes. 👉The volume action on the hourly timeframe also not good because when the price approached the resistance bearish volume increased and then the price went into consolidation and stochastic stayed in the higher zone and RSI started to decline from the overbought zone potential signal for weakness The Solution 👉IBREALEST Hourly chart, Volume spiked before the breakout a good sign and the RSI and stochastics are approaching the overbought zone but they had not become overbought before the breakout, when the breakout occurred the volume was supporting and even on the small range candle the volume is equal to its previous candle. Finally The Breakout Succeded. 👉By keeping these small and simple factors in mind while planning your trades you can minimize the wrong entries and also use price filtering methods like taking a trade on only closing basis of a particular candle above the resistance zone, And applying it with the concept of interpretation of chart pattern according to market phase idea published earlier Thanks For Reading so far, I hope this idea added Some value. Please like and comment. Keep Learning, Happy Trading.
NSE:BECTORFOODEducation
by SANJAYPATIDAR_
Perfect 10 Points for Perfect Bitcoin (BTC) / Altcoin Crypto # 10 Points Strategy to Master Crypto:- (More the points confirmation more may be the accuracy). 1. Market Cycle - Know the Bigger Picture - Establish a Bias - Its Bullish or Bearish. 2. Market Cap Dominance Percentage chart - Interest Increasing in Bitcoin or Altcoin. 3. Open Interest - Total Buyer & Seller Increasing or Decreasing. 4. Long/Short Ratio - Dominance of Buyers or Sellers. 5. Strong and Weak Crypto - Strong Crypto for Buying & Weak Crypto for Selling. 6. Bitcoin Follower Coins & Independent Coins - Against or along Bitcoin. 7. Order Block - Big players entry in the market along with volume and price correlation to know Breakout or Rejection. 8. Price Imbalance Candle - Long Bullish or Bearish candle for entry. 9. Importance of Fibonnaci Level. 10. Risk Management & Chart Time frame - Importance of Stoploss and Risk Reward along with Chart Timeframe. (How many points do you follow in your entry ? 0 out of 10 ? or 1 out of 10 ? ..... or 10 out of 10 ? ) =========================================================================================================================================== LETS LEARN ABOUT A FEW BASICS OF CRYPTO FIRST:- # What is a BITCOIN ? Bitcoin is a decentralised digital currency, often referred to as cryptocurrency. It operates on a technology called blockchain, which is a distributed ledger that records all transactions across a network of computers. Created in 2009 using the pseudonym Satoshi Nakamoto, Bitcoin allows peer-to-peer transactions without the need for a central authority. It's known for its limited supply of 21 million coins and the process of mining, where powerful computers solve complex mathematical problems to validate transactions and add them to the blockchain. # What are Altcoins ? Any cryptocurrency other than Bitcoin is called Altcoin. These coins aim to offer variations or improvements on Bitcoin's features or provide different use cases. Each altcoin typically has its unique blockchain and may introduce innovations such as smart contracts, faster transaction times, or enhanced privacy features. Investors and users may choose altcoins based on specific functionalities or characteristics they find appealing beyond what Bitcoin offers. Some examples of altcoins include Ethereum, Ripple, Litecoin, Cardano etc. # Few differences between Bitcoin & Altcoins :- * Origin and Popularity: - Bitcoin was the first cryptocurrency, created in 2009 by Satoshi Nakamoto, and remains the most well-known and widely used. - Altcoins are any cryptocurrencies other than Bitcoin and were introduced later to address perceived limitations or offer additional features. * Blockchain Technology: - Bitcoin operates on its blockchain, a decentralized ledger recording all transactions. - Altcoins have their own blockchains, each with unique features. Some may use different consensus mechanisms, governance models, or focus on specific functionalities like smart contracts. * Purpose and Use Cases: - Bitcoin is primarily designed as a digital currency for peer-to-peer transactions and as a store of value. - Altcoins often have diverse purposes, including smart contracts (Ethereum), faster transactions (Litecoin), cross-border payments (Ripple), and various other applications depending on the specific altcoin. * Mining Algorithms: - Bitcoin uses the SHA-256 mining algorithm, requiring significant computational power. - Altcoins may use different mining algorithms, such as Scrypt (Litecoin) or Ethash (Ethereum), providing alternatives to Bitcoin's proof-of-work mechanism. * Supply Limits: - Bitcoin has a capped supply of 21 million coins, creating scarcity. - Altcoins may have different maximum supplies, and some may not have a capped limit. * Community and Development: - Bitcoin has a large and active community, with ongoing development focused on security and scalability. - Altcoins vary in community size and development activity, depending on factors like use case and popularity. =========================================================================================================================================== LETS DISCUSS EACH POINT IN DETAIL:- 1. Market Cycle - Know the Bigger Picture - Establish a Bias - Its Bullish or Bearish. A "market cycle" refers to the recurring stages of price movements that financial markets, including stocks, cryptocurrencies, and commodities, go through over time. These cycles are driven by a combination of various factors, including economic conditions, investor sentiment, and market participants' behavior. The typical market cycle consists of four main phases: * Accumulation Phase: In this phase institutional investors start accumulating positions. Prices are often at their lowest. * Bullish Phase: In this phase buying pressure increases & prices start to rise. Improving sentiment attract more investors leading to an uptrend. * Distribution Phase: In this phase early investors and institutions begin to take profits, leading to a slowing of the upward momentum. Prices might consolidate or experience slight corrections. * Bearish Phase: In this phase selling pressure increases & prices start to fall. Understanding market cycles can help traders and investors to establish a Bearish or Bullish Bias by recognising the broader context of market conditions. Analysing market cycles is an important aspect of both technical and fundamental analysis. So if the Market Cycle indicates a Bearish Phase, it means Bearish Bias is established, you may find sharp fall and big red candles, Shorting Crypto may give quick & huge profits and vice versa for Bullish Phase. Inshort during Bearish Phase focus on Shorting crypto and in Bullish Phase focus on making Long Positions in Crypto. Remember - "Trend is your friend". Point 1 Conditions: -Accumulation Phase & Distribution phase - wait for Breakout or Breakdown for confirmation (No entry - May get trapped). -Bullish Phase - Long Entry may fetch good return. -Bearish Phase - Short Entry may fetch good return. 2. Market Cap Dominance Percentage chart - Interest Increasing in Bitcoin or Altcoin. "Market Cap Dominance Percentage Chart" shows percentage of a specific cryptocurrency compared to total cryptocurrency market capitalization. Like Bitcoin's market capitalization is $1 trillion & total cryptocurrency market capitalization is $2 trillion, So Bitcoin's market cap dominance percentage would be 50% (1 trillion/2 trillion x 100). With this chart relative strength of a particular cryptocurrency can be seen in the broader market. Changes in market cap dominance can indicate shifts in investor sentiment and preferences among different cryptocurrencies. It's important to note that a declining dominance percentage for a major cryptocurrency might suggest increased interest in alternative cryptocurrencies (altcoins). while a rising dominance percentage may indicate a stronger focus on the leading cryptocurrency in the market. So if BITCOIN dominance % decline it means interest in Altcoins is increasing. Shorting Bitcoin and focusing on Altcoins may give good profits and vice versa for BITCOIN dominance % increasing. Point 2 Conditions: -Percentage Chart shows Interest in Bitcoin Increasing - Long Entry in Bitcoin or Altcoins which follow Bitcoin may fetch good return. -Percentage Chart shows Interest in Bitcoin decreasing - Short Entry in Bitcoin or Altcoins which follow Bitcoin may fetch good return. 3. Open Interest - Total Buyer & Seller Increasing or Decreasing. "Open interest" is a term used in the context of futures and options trading. It is to measure the total number of open contracts at any given time. - Increasing Open Interest means New contracts are created. - Decreasing Open Interest means contracts are closed. High open interest is often associated with increased market activity and liquidity, while low open interest may suggest a lack of interest or declining market participation. Open interest is one of many factors to read market trends and sentiment. Analysing Open interest with price and volume can give insight into market moves. More Open interest simply means more interest in crypto. But which side is the interest - can be seen with the help of Long/Short Ratio. So if Bitcoin or Altcoin Open Interest is increasing - You may think of entering and making position in this liquid market. If Open Interest is decreasing - you may avoid the dull market. For Eg:- on 1 Day Graph BTC Future Open Interest on 21 Jan is 75000 BTC Future Open Interest on 22 Jan is 72000 It indicates that 7000 Open Interest are decreased. now these 7000 Open Interest are of Long or Short, this can be identified with Long/Short Ratio. Point 3 Conditions: - More Open Interest - Look for Entry in Crypto - Due to liquidity moves may be good. - Less Open Interest - Avoid Entry in Crypto - Less liquidity may lead to Dull Market. 4. Long/Short Ratio - Dominance of Buyers or Sellers. The "long-short ratio" is a measure used to assess the sentiment of market participants. - Long Positions: Traders who expect the price to rise take long positions, buying the asset with the intention of selling it later at a higher price. - Short Positions: Traders who expect a decline in the price take short positions. They borrow the asset, sell it at the current market price, and aim to buy it back later at a lower price. The long-short ratio is calculated as the total number of long positions divided by the total number of short positions. The resulting ratio can provide insights into market sentiment. - Long-Heavy Ratio (Greater than 1.8): Indicates a higher proportion of traders are taking long positions, suggesting bullish sentiment. - Short-Heavy Ratio (Less than 1.8): Indicates a higher proportion of traders are taking short positions, suggesting bearish sentiment. So in bitcoin if its Short-Heavy Ratio & is Greater than 1.8. It may be good opportunity to Short Bitcoin and vice versa for Long-Heavy Ratio (Greater than 1.8). Point 4 Conditions: -Long-Heavy Ratio in Bitcoin (Greater than 1.8) - Long Entry in Bitcoin or Altcoins which follow Bitcoin may fetch good return. -Short-Heavy Ratio in Bitcoin (Greater than 1.8) - Short Entry in Bitcoin or Altcoins which follow Bitcoin may fetch good return. 5. Strong and Weak Crypto - Strong Crypto for Buying & Weak Crypto for Selling. There are various kind of Altcoins. some are weak and some are strong. Coins which falls sharply in Bearish Market are generally Weak Coins and Coins which doesnt fall or fall little only in bearsish Market are generally Strong Coins. Point 5 Conditions: - Long Entry in Strong Altcoins during a Bull phase may fetch good return. - Short Entry in Weak Altcoins during a Bear phase may fetch good return. 6. Bitcoin Follower Coins & Independent Coins - Against or along Bitcoin. There are altcoins which follow bitcoin and there are altcoins which moves against the bitcoin. which means when you see bitcoin chart rising a few altcoins rise with bitcoin and a few can be seen falling when bitcoin is rising. In similar way you can see a few altcoins falling with bitcoin falling and a few can be seen rising when bitcoin is falling. this can be a good hint in selecting the right altcoin to enter in correlation with Bitcoin. For eg: and are weak Altcoins, vice versa is also true. Point 6 Conditions: - If overall Bias is Bearish, But Bitcoin is rising, we may short Altcoin which moves against the bitcoin or are independent - it may fetch good return. - If overall Bias is Bearish, and Bitcoin is falling, we may short Altcoin which follow bitcoin - it may fetch good return. - If overall Bias is Bullish, But Bitcoin is falling, we may Long Altcoin which moves against the bitcoin or are independent - it may fetch good return. - If overall Bias is Bullish, and Bitcoin is rising, we may Long Altcoin which follow bitcoin - it may fetch good return. 7. Order Block - Big players entry in the market along with volume and price correlation to know Breakout or Rejection. Its a part of Technical analysis (Price Action). "Order Block" refers to a price zone on a chart where large buying or selling activity occurred. These zones as areas of strong supply or demand. - Area with significant buying orders is a potential support zone or Bullish order block. - Area with substantial selling orders is a potential resistance zone or Bearish order block. Crypto Traders may use order blocks as part of their analysis to identify key levels for potential reversals or continuation of price trends. Generally on a smaller timeframe Order Blocks are weak so these order blocks are used for Breakout or Breakdown trades along with volume for confirmation, On higher timeframe they act as supply and demand zones. Volume and price - Volume correlation with price to know Breakout or Rejection. Decreasing volume with an increasing price - is a potential weakening of trend. Increasing volume with an increasing price - is a potential strengthing of trend. * Rising price without strong supporting volume may indicate a lack of confirmation for the upward movement. In healthy trends, increasing volume typically accompanies rising prices, signaling strong market UpTrend. * Decreasing volume during a price increase might be a signal that buyers are becoming interested in the current upward move. This as a warning sign of a potential trend reversal. * Price is breaking above a Resistance level with decreasing volume - suggest that breakout might lack the strength needed for a sustained upward move. * Decreasing volume indicate a period of market indecision or consolidation, where buyers and sellers are in equilibrium. This may precede a more significant move in either direction. Example 1 - Like on Lower timeframe if price is rising and face resistance near a bearish order block but volume on buying side is more it may give a breakout and this may be a good entry for long posn. Example 2 - But on Higher timeframe if price is rising and face resistance near a bearish order block but volume on buying side is less it may not give a breakout and this may be good entry for Short posn. So Order Block and volume correlation is equally important to analyse entry point. Volume increasing indicates a trend strength is increasing and volume decreasing means a trend strength is decreasing. Point 7 Conditions: - Lower Timeframe - Price rising & Near Bearish Order block (Supply zone) Facing Resistance - But Volume is more (Strong trend) - Likely Bull Breakout point - Long Position may fetch good results. - Lower Timeframe - Price rising & Near Bearish Order block (Supply zone) Facing Resistance - But Volume is Less (Weak trend) - Not Likely a Bull Breakout point - Long Position may Trap you so wait for confirmation or no trade. - Lower Timeframe - Price falling & Near Bullish Order block (Demand zone) Getting Support - But Volume is more (Strong trend) - Likely Bear Breakout point - Short Position may fetch good results. - Lower Timeframe - Price falling & Near Bullish Order block (Demand zone) Getting Support - But Volume is Less (Weak trend) - Not Likely a Bear Breakout point - Short Position may Trap you so wait for confirmation or no trade. - Higher Timeframe - Price rising & Near Bearish Order block (Supply zone) Facing Resistance - But Volume is more (Strong trend) - Avoid a Long/Short Position - it may Trap you so wait for confirmation or no trade. - Higher Timeframe - Price rising & Near Bearish Order block (Supply zone) Facing Resistance - But Volume is Less (Weak trend) - Likely a Bear Reversal point - Short Position may fetch good results. - Higher Timeframe - Price falling & Near Bullish Order block (Demand zone) Getting Support - But Volume is more (Strong trend) - Avoid a Long/Short Position - it may Trap you so wait for confirmation or no trade. - Higher Timeframe - Price falling & Near Bullish Order block (Demand zone) Getting Support - But Volume is Less (Weak trend) - Likely a Bull Reversal point - Long Position may fetch good results. 8. Price Imbalance Candle - Long Bullish or Bearish candle for entry. "Price Imbalance Candle" refers to a specific type of candles on a chart that suggests an imbalance between buying and selling pressure in the market. This is a candle with a relatively long body and small or no wicks, indicating a strong directional move. Bullish price imbalance candle may have a long bullish body- Indicating strong buying pressure and weak selling pressur in that time frame. Bearish price imbalance candle may have a long bearish body- Indicating strong selling pressure and weak buying pressure in that time frame. Generally its accuracy is more on higher timeframes. Point 8 Conditions: - When big Bullish candle is seen - mark its 50% level - let price retrace to this 50% level for Bull entry - Stoploss may be Slightly below this Candles Low. - When big Bearish candle is seen - mark its 50% level - let price retrace to this 50% level for Bear entry - Stoploss may be Slightly above this Candles High. 9. Importance of Fibonnaci Level: Its a vast topic to cover in itself. I am covering it in short here. In future i may post a detailed study on this topic. Fibonacci trading is a technical analysis approach that involves using Fibonacci retracement and extension levels to identify potential areas of support and resistance in financial markets. This method is based on the Fibonacci sequence, a mathematical concept where each number is the sum of the two preceding ones (e.g., 0, 1, 1, 2, 3, 5, 8, 13, ...). Fibonacci can be drawn on chart using fib from tradingview tools - its in many forms like fib channel, fib time zone, fib spiral, fib wedge etc. There are various fib indicators also available on the tradingview. Point 9 Conditions: Fibonacci trading is done in two ways: * Fibonacci Retracement Levels:Reversal zones in Bearish or Bullish trend. - Traders draw horizontal lines on a price chart at key Fibonacci levels, such as 23.6%, 38.2%, 50%, 61.8%, and 78.6%. - These levels represent potential retracement zones where a price might reverse temporarily before continuing in the primary trend. - Traders use Fibonacci retracement to identify potential entry points in the direction of the overall trend. * Fibonacci Extension Levels: Targets in Bearish or Bullish trend. - Extension levels are used to identify potential price targets in the direction of the prevailing trend. - Common extension levels include 127.2%, 161.8%, and 261.8%. - Traders may use these levels to set profit targets or to identify where a trend might encounter significant resistance. 10. Risk Management & Chart Time frame - Importance of Stoploss and Risk Reward along with Chart Timeframe. Again its a vast topic to cover in itself and a very important topic also. I am covering it in short here. In future i may post a detailed study on how risk may be managed in any trade. - Portfolio Diversification: Spread your investments across different cryptocurrencies to reduce the impact of poor performance in one asset on your overall portfolio. - Position Sizing:nDetermine the amount of capital to allocate to each trade based on your risk tolerance. Avoid putting all your funds into a single trade. - Stop-Loss Orders: Set predetermined price levels at which you will automatically sell to limit potential losses. This helps prevent significant downturns in your portfolio. - Risk-Reward Ratio: Establish a clear risk-reward ratio before entering a trade. Ensure the potential reward justifies the risk taken. This helps in making more informed decisions. - Research and Analysis: Stay informed about market trends, news, and fundamental analysis. - Use of Technical Analysis: Indicators and charts may be used to identify potential entry and exit points. This can help in predicting market movements and adjusting your strategy accordingly. - Limit Leverage: Be cautious with leverage, as it can amplify both gains and losses. High leverage increases the risk of liquidation and significant portfolio fluctuations. As a beginner maint Zero leverage. - Regular Review and Adjust: Periodically reassess your portfolio and trading strategy. Market conditions change, and adjusting your approach can help adapt to new trends and risks. - Stay Disciplined: Stick to your predefined trading plan and avoid impulsive decisions. Emotional reactions can lead to poor choices and increased risks. - Remember, Risks can't be zero. there's no foolproof strategy, but combining these risk management techniques may help mitigate potential losses in crypto trading. Chart Timeframe:- On 5 Min and 15 Min timeframe - Scalping Trades - for Breakout & Breakdown trades. On 4 Hour timeframe - Swing Trade - for Supply (Bearish OrderBlock) & demand (Bullish OrderBlock) trades. =========================================================================================================================================== NOW LETS TAKE AN EXAMPLE TO COMBINE ALL ABOVE 10 POINTS:- (More the points confirmation - More the accuracy) Point 1. Market Cycle shows Bullish Phase = So My Bias is Bullish (Long). Point 2. Market Cap Dominance Percentage chart Shows Interest is Increasing in Bitcoin = So Bitcoin or Altcoin which follow Bitcoin are my pick. Point 3. Open Interest Shows Total Open Interests Increasing, means Liquidity increasing = So right time to Enter in crypto market for me. Point 4. Long/Short Ratio shows Dominance of Buyers = So i will look for an opportunities in Long Position. Point 5. Strong Crypto for Buying = So i will choose Bitcoin or Fundamentally Strong Altcoin which dip less in bear Market. Point 6. Bitcoin Follower Coins = So Bitcoin or Altcoin which follow Bitcoin are my pick. Point 7. Order Block with volume and price correlation = So i will look for Demand Zone means Bullish Order Block for entry near support. Point 8. Price Imbalance Long Bullish Candle = So near that support zone i will look for a Price Imbalance Long Bullish Candle, i will mark its 50% level for entry. Point 9. Fibonnaci Levels for entry and exit = If this support and 50% imbalance candle mark is near Fib Retracement Levels it gives further confirmation of bull entry. Point 10. Risk Management & Chart Time frame = Now i may book Profit or Loss, keeping above risk management points in mind. =========================================================================================================================================== Notes:- Adding a few good indicators along with above 10 Points May further increase the accuracy. It's important to note that above points are just an idea of a comprehensive crypto trading strategy. Successful trading typically involves combining multiple indicators, risk management techniques, and a thorough understanding of market conditions. Like other many Strategies in the Market, Above Strategy also is not a holy grail. It can only assist you in building a good strategy for yourself. You can only succeed with proper position sizing, risk management and following correct trading Psychology (No overtrade, No greed, No revenge trade etc). ABOVE SHARED EXPLANATION AND STRATEGY IS FOR EDUCATIONAL PURPOSE ONLY. YOU MAY PAPER TRADE TO GAIN CONFIDENCE AND BUILD FURTHER ON THESE. This is for educational purpose only. Please consult your financial advisor before investing. we are not SEBI registered. Hope you like it Happy trading :-)
BITSTAMP:BTCUSDEducation
by MasterTrader1949X
3