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Chart Patterns

RELIANCE- Big Elephant of NIFTY forms Descending TriangleAnalyzing the Descending Triangle Pattern on RELIANCE Daily Charts Introduction: In the world of technical analysis, patterns often provide valuable insights into potential market movements. One such pattern that has caught the attention of traders is the descending triangle forming on the Reliance Industries Limited (RIL) daily charts. Let's delve into this pattern and explore what it could mean for RIL's future price action. Understanding the Descending Triangle Pattern: The descending triangle is a bearish continuation pattern characterized by a horizontal support line and a descending trendline. In this pattern, the price forms lower highs, indicating a potential weakening of bullish momentum. Meanwhile, the support line remains relatively flat, signaling a level at which buying pressure may be concentrated. Analyzing RIL's Descending Triangle: On RIL's daily charts, we can observe the formation of this pattern, with the stock consistently making lower highs since a recent peak. The horizontal support line is evident, showcasing a level at which buyers have historically stepped in. Implications for Traders: 1. Bearish Bias: The descending triangle typically suggests a bearish bias, indicating that sellers may gain control as the pattern progresses. 2. Breakout Potential: Traders often look for a breakout below the support line as a confirmation of the pattern. A decisive move below this level could signal further downside. 3. Volume Confirmation: Volume plays a crucial role in confirming pattern validity. Traders should monitor volume trends, especially during a potential breakout. Key Levels to Watch: - Support: Keep a close eye on the support level of the descending triangle. A break below this level could signal further downside pressure. - Resistance: The descending trendline acts as a resistance level. A break above this line may invalidate the pattern. Risk Management: As with any trading strategy, risk management is paramount. Traders should consider implementing stop-loss orders and position sizing strategies to protect against unexpected price movements. Conclusion: The descending triangle pattern forming on RIL's daily charts presents an interesting opportunity for traders to monitor. While patterns provide valuable insights, it's essential to wait for confirmation signals such as a breakout with increased volume before making trading decisions. Keeping risk management in mind can help traders navigate potential opportunities while minimizing downside risks. Disclaimer: This analysis is for informational purposes only and should not be construed as financial advice. Traders should conduct their own research and consider their risk tolerance before making any trading decisions.
NSE:RELIANCEEducation
by HappynessPro
SPARC - BO FAIL, IMPORTANT RISK MANAGEMENT LESSONHello Community, today i will talk about the importance of risk management in stock market, why its important to respect risk in stock market with proper stoploss method you should have as per your risk apetite with example. We have talked much about the BO stocks which had made good money for us but still in market there are lot many examples where good BO got failed at later stage. I was looking at the chart of sparc which i traded before as a 52 WEEK BO but since after my entry it stalked a little bit so i booked my profit as i got other opportunity to make money and keep the alerts at BO points to reenter later. Now to day while scanning my multiyear bo watchlist i saw that a BO Faliure with gaps in the chart at weekly time frame. Rest details are on chart. That's why i say everytime profit booking is also very improtant at every level, you can always reenter in any stocks becoz booking profit is better than the looking profit. Remember: I am a Price Action Trader and use Price and Volume together with different Timeframes, including RSI, and market conditions. To get best result always wait for confirmation. Focus on Risk Management and Position sizing. I use Trading view for my Analysis and charts Repositories. I could have Or Couldn’t have positions in Sharing Ideas. Treat trading like a business and it will pay you like a business…..!! Hope this post is helpful to community Thanks RastogiG
NSE:SPARCEducation
by RastogiG
12
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
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
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 :)
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 :)
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