Trading Patterns 101 - The Rounding Bottom patternWhat Is a Rounding Bottom?
• A rounding bottom is a chart pattern that graphically forms the shape of a "U".
• Rounding bottoms are found at the end of extended downward trends and signify a reversal
• It is also referred to as a saucer bottom
• Ideally, volume and price will move in tandem.
Parts of a Rounding Bottom:
A rounding bottom chart can be divided into several main areas.
• Decline
• Consolidation
• Advance
Important aspects:
1. Prior Trend: In order to be a reversal pattern, there must be a prior trend to reverse. Ideally, the low of a rounding bottom will mark a new low or reaction low. The stock may trade flat before forming the pattern.
2. Decline: The first portion of the rounding bottom is the decline that leads to the low of the pattern. This decline can take on different forms: some are quite jagged with a number of reaction highs and lows, while others trade lower in a more linear fashion.
3. Low: The low of the rounding bottom can resemble a “V” bottom, but should not be too sharp. Because prices are in a long-term decline, the possibility of a selling climax exists that could create a lower spike.
4. Advance: The advance off of the lows forms the right half of the pattern and should take about the same amount of time as the prior decline. If the advance is too sharp, then the validity of a rounding bottom may be in question.
5. Breakout: Bullish confirmation comes when the pattern breaks above the reaction high that marked the beginning of the decline at the start of the pattern.
6. Volume: In an ideal pattern, volume levels will track the shape of the rounding bottom: high at the beginning of the decline, low at the end of the decline, and rising during the advance. Volume levels are not too important on the decline, but there should be an increase in volume on the advance and preferably on the breakout.
Potential example:
Like always, if anyone is interested in getting a PDF version of this thread, then you can message me, I'll provide it.
Happy learning. Cheers!
Community ideas
Creating Lines with ShortcutsCreating lines on a chart is one of the most fundamental methods of charting when performing technical analysis . Being able to create these effectively and quickly is a very useful skill to have.
Horizontal, Vertical and Cross lines can all be found on the drawings panel to the left of the chart in the subgroup “Trend Line Tools”. These tools can be added by selecting them from the subgroup and then placing them on the chart.
However, a more efficient method to creating these lines is to utilize the hotkey functions:
Horizontal Line Shortcut:
- Alt+H (PC), or Option+H (MAC)
Vertical Line Hotkey:
- Alt+V (PC), or Option+V (MAC)
Cross Line Hotkey:
- Alt+C (PC), or Option+C (MAC)
Becoming more efficient in your ability to draw lines on your chart will allow for quicker identification of areas of support/resistance and times on your chart.
Be sure to visit our help center to learn more about these tools!
More information on the Horizontal Line tool:
www.tradingview.com
More information on the Vertical Line tool:
www.tradingview.com
More information on the Cross Line tool:
www.tradingview.com
Divergence Masterclass 2 - Bullish divergenceIn the last thread, we discussed the basics of divergence. In this thread, we are going to learn about the positive divergence a.k.a Bullish divergence. I'll cover it in 3 parts:
1. What is bullish divergence?
2. Types of bullish divergence
3. Subtypes with illustrations
So, let's move ahead!
What is Bullish divergence?
A bullish divergence occurs when prices fall to a new low while the oscillator fails to reach a new low. It indicates that the selling pressure is decreasing and the bulls may soon control the market. Generally, a bullish divergence occurs at the end of a downtrend.
Bullish divergence is mainly of 2 types:
1. Classic bullish divergence – In this case, the price and the oscillator always either forms a lower low or an equal low. Considering these cases, the classic divergence consists of 3 subtypes. The classic divergence occurs at the end of a bearish trend and indicates that a trend reversal may occur soon.
2. Hidden bullish divergence – In this, the price forms a higher low, but the oscillator forms a lower low. Hidden divergence occurs during the correction phase of a trend and is a possible sign for a trend continuation.
So, combining all the above cases, there are only 4 types of Bullish divergence. You don’t have to memorize the names, it’s just a waste of time. Try to understand the underlying logic.
1. Strong Bullish Divergence.
The price makes a lower low but the oscillator makes a higher low. This means that the sellers are not selling at the same momentum i.e. the selling momentum is decreasing.
Price: Lower Low(LL)
Oscillator: Higher Low(HL)
2. Medium Bullish Divergence
The price makes a double bottom, almost the same level as the previous low and the oscillator makes a higher low. This indicates that at the same price levels, the momentum is increasing.
Price: Equal Low(EL)
Oscillator: Higher Low(HL)
3. Weak Bullish Divergence
In a weak bullish divergence, the price makes a lower low but the oscillator has almost the same low levels. This means, even though the price is decreasing, the momentum is intact.
Price: Lower Low(LL)
Oscillator: Equal Low(EL)
4. Hidden Bullish Divergence
The hidden bullish divergence occurs at less frequency as compared to the other types. In this, the price forms a higher low, but the momentum oscillator forms a lower low. This indicates that even at a decreasing momentum, there is enough buying going on to push the price up.
Price: Higher Low(HL)
Oscillator: Lower Low(LL)
Pro Tip:
1. For bullish divergence, we only look at the LOWS .
2. Don’t memorize the cases. Just understand that if the divergence is occurring at the lows, then the price will reverse in the opposite direction i.e. it will go up. Hence, you just have to spot the divergence, regardless of the name.
Please leave your feedback, it'll help me to create better content. Cheers!
A layman’s guide to Support and ResistanceForeward
In this thread, I would try with the best of my knowledge to explain the following questions as easily and briefly as possible.
1. What is a support level?
2. What is a resistance level?
3. What is their importance?
4. When and where to place Buy/Sell orders?
Introduction
Support and resistance levels are a critical part of trend analysis because they are used to make specific trading decisions. The fact that these levels flip roles between support and resistance can be used to determine the range of a market, trade reversals, bounces, or breakouts. They help in the identification of a trend reversal.
For example, you might identify an upcoming support level and decide to start buying the stock as it approaches the said support knowing that it will likely rebound higher. The support and resistance levels test and confirm the trends and should be closely tracked by every trader. These levels exist due to an influx of buyers and sellers at key junctures.
So, the question arises- what do support and resistance really mean?
What is a Support?
A support level/zone is a level where the price tends to find support as it falls. This means that the price is more likely to “rebound” from this level rather than pierce through it. However, once the price breaks down this level, it is likely to continue falling until meeting another support level.
What is a Resistance?
A resistance level/zone is a level where the price tends to find resistance as it rises. This means that the price is more likely to “bounce back down” from this level rather than break through it. However, once the price pushes above this level it is likely to continue rising until it meets another resistance level.
Trade setup:
1. Buying the support
The price gets rejected from the resistance level a few times. Finally, after a good attempt, the price manages to break out from the resistance. Don’t buy yet, wait for the retest since it can be a false breakout and you may end up losing your money. After a successful retest, open up your long positions. Make sure to lock in profits on the way up.
2. Selling the resistance
The price gets rebounded from the support level a few times. After a few attempts, the price finally breaks down of the support level. Don’t sell yet since it can be a false breakdown, wait for the retest. If the retest is successful, close your long positions on the breakdown point. Some may want to open short positions too.
Role Reversal/ Change of Polarity
A resistance level after a successful breakout turns into a support level and a support level turns into a resistance level after a breakdown. The turning of Resistance into a Support is or vice versa is known as "Change of Polarity".
Conclusion:
A zone keeps on flipping roles between support and resistance. Sometimes, it acts as a support, and other times it acts as a resistance. Hence, never consider a zone as fixed support or resistance. Moreover, consider these zones a potential support or resistance zones because there isn't any certainty that these will act as the desired zone.
Useful Tips:
1. Avoid placing orders at these major points since there exists a lot of volatility around these points.
2. Take care to not place buy/sell orders directly at these levels since there is a good chance of not hitting the exact levels. Use approximate margins for placing orders.
3. Never ever forget to use a stop loss if for an instance the trade doesn’t go as expected.
Single Candlestick Chart Pattern - Bullish Hammer
Hammers have a small real body and a long lower shadow.
Hammers occur after a price decline.
The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open.
The close can be above or below the open, although the close should be near the open in order for the real body to remain small.
The lower shadow should be at least two times the height of the real body.
Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation.
Confirmation -
Hammers are most effective when they are preceded by at least three or more declining candles. A declining candle is one which closes lower than the close of the candle before it.
A hammer should look similar to a "T". This indicates the potential for a hammer candle. A hammer candlestick does not indicate a price reversal to the upside until it is confirmed.
Confirmation occurs if the candle following the hammer closes above the closing price of the hammer. Ideally, this confirmation candle shows strong buying. Candlestick traders will typically look to enter long positions or exit short positions during or after the confirmation candle. For those taking new long positions, a stop loss can be placed below the low of the hammer's shadow.
Hammers aren't usually used in isolation, even with confirmation. Traders typically use price or trend analysis, or technical indicators to further confirm candlestick patterns.
Market Cycles – Market Phases and Different TypesTypes of Market Phases
There are 4 clear market phases, and all markets go through these phases in a repeated way:
All markets go through 4 clear phases in a repeated way:
1.Accumulation Phase
This phase occurs after the market has bottomed and early adopters begin to buy, figuring the worst is over. At this phase, valuations are very attractive, and general market sentiment is still bearish. Overall market sentiment begins to switch from negative to neutral.
The end of an accumulation phase is typically marked by a breakout where trade sentiment moves towards neutral and traders start sniffing an opportunity.
2. Mark up Phase
The market has been stable for a while and is beginning to move higher. The early majority are getting on the bandwagon. Traders, seeing the market is putting in higher lows and higher highs, recognize market direction and sentiment have changed.
Markup phase begins with a breakout and tends to continue till there is a major pullback. Markets start trending upwards and more investors jump on the bandwagon as greed and the fear of losing out take over.
3. Distribution Phase
This part of the cycle is identified by a period in which the bullish sentiment of the previous phase turns into a mixed sentiment. Prices can often stay locked in a trading range that can last a few weeks or even months. The distribution phase is a very emotional time for the markets, as investors are gripped by periods of complete fear interspersed with hope and even greed as the market may at times appear to be taking off again.
This phase is marred with consolidations, breakouts and pullbacks at small scales, identifying trends become difficult.
4. Mark-down Phase
The fourth and final phase in the cycle is the most painful for those who still hold positions. Many hang on because their investment has fallen below what they paid for it refusing to let go in the vain hope of being rescued.
Timing the market correctly is the first step to making profits with TA. You would want to build a system that helps identify an entry point when the market is in the ‘mark up’ phase. The system should then also help you also identify when to exit once the asset is moving from the distribution to the ‘mark down’ phase.
THE CYCLE OF MARKET EMOTIONS “Control your emotions or be consumed by them.” This is exactly how the financial markets play. You need to be cautious enough to surf the wave of emotions.
An illustration as to how quickly our emotions change with respect to the market movement has been explained with the help of NIFTY’s weekly chart.
Optimism:
It is the hopefulness and confidence about the future or the success of something. We step in the markets and have the hope and confidence of succeeding against all odds.
Excitement:
Excitement drives in when the market moves in the direction we hoped. Excitement also brings motivation for future endeavors.
Thrill:
When the momentum carries on, the gains that we’ve made give us thrill and we further expect higher returns.
Euphoria:
As the cycle tops, there comes the state of utmost satisfaction where we start to believe that we made smart moves and the same will continue without realizing the uncertain nature of the markets. We tend to fool ourselves by now playing beyond our appetite. At this point, the financial risk is at it maximum, like the possible financial gain.
Denial:
When the market turns, we watch intently for a favorable move so as to save ourselves from being a victim of loss.
Anxiety:
As the market continues to plunge, anxiety sets in. We see our investment values declining and this is the first time that you experience the market going against you. You now hold onto the investment as you don’t want to book losses and here in, you see yourself as a long term investor.
Fear:
When the losses accelerate, fear kicks in. At this point, we might even pick riskier choices to recover our losses.
Depression:
The reality of the bear market makes us depressed and question our conscience about the moves we made. We become desperate to overcome it.
Panic:
Having no idea of what to do next and thinking that we had a chance to book our profits makes us panic-stricken and at this point, we might make unusual decisions that may cause further damage.
Capitulation:
Understanding that the market isn’t predictable, we feel helpless and dump our investments.
Despondency:
Having booked losses, We now reflect the choices we made and wonder whether we should have invested in the first place? We now have low spirit and confidence and this is the point when we miss out great financial opportunities. Hence, It is the point of Maximum financial opportunity.
Skepticism:
As the market starts making higher lows and higher highs, We’re in doubt and stay cautious to outlook if the trend will last.
Hope:
The uptrend remains intact, we might feel reluctant to re-invest but looking at the attractive scope, We hope to make gains.
Relief:
The market now seems to be recovering. For the ones who let their emotions take control, the cycle might again begin.
How to Draw Fibonacci Channels
Fibonacci Channels are used to determine fibonacci support and resistance levels within an identified trend.
These channels can easily be drawn in both uptrends or downtrends to find potential areas where price action could change.
Uptrend
When drawing a Fibonacci Channel on an uptrend, a clearly identified trend needs to be established with higher lows being created.
To draw the channel, first select the two low points on the trend, and then the high point in-between them.
After the channel is drawn, the Fibonacci levels calculated can be used to help speculate price action by watching these areas as support or resistance.
Downtrend
When drawing a Fibonacci Channel on a downtrend, a clearly identified trend needs to be established with lower highs being created.
To draw the channel, first select the two high points determined by the trend, and then the low point in-between them as shown below.
Do you use Fib Channels?
If so, share your ideas in the comments below!
Using the Trend-Based Fib Extension ToolThe Fibonacci ratios are widely used among traders to help identify potential areas of reversal in the movement of price action.
The Trend-based Fibonacci Extension tool utilizes three points on a previously identified trend in order to draw the Fib ratios on the chart.
In the chart above, price was rejected twice forming a double top which is a fairly strong reversal pattern. To help identify potential areas of support and resistance we have drawn a Trend-Based Fib Extension.
Using the double top patterns High, Low, and High as the three points for the Trend-Based Fib Extension, the Fibonacci ratios are drawn on the chart.
In this example, you can see that price action respected these levels very well until finding strong support at a potential bottom that corresponds with the 200% extension level.
But, notice the region in the yellow box on this chart. There seems to be no identified areas where the Fibonacci ratios show support or resistance.
While retrospectively we can tell that the area of support found at ~ $12 (141.4%) in mid-November 2017 did not produce a new bull market. At the time there was a potential reversal at that region resulting in higher highs and therefore we could have pulled a NEW Trend-Based Fib Extension as shown below.
As the new Trend-Based Fib Extension is identifying areas of a new uptrend, we see that these ares are shown in a way that they were not in the previously drawn Trend-Based Fib Extension.
However, price was rejected at the 61.8% level and continued downward until the 0% extension level was broken, thus invalidating this Trend-Based Fib Extension.
While the upward price trend did not continue, there was a local high that was made and thus could be utilized to create another Trend-Based Fib Extension to further identify areas of reversal for the continuing downtrend as shown below.
Looking at this newly created Trend-Based Fib Extension, we see that the areas moving down to the 78.6% extension level are very well respected, at which time the price found support, creating a triple bottom reversal pattern.
It is interesting to note that the 78.6% extension on this Trend-Based Fib Extension pull is at $1.82, and the 200% extension level from our first Trend-Based Fib Extension pull was at $1.95, a mere $0.13 difference in price.
This area where the two levels of a Trend-Based Fib Extension or Retracement group together is know as a Fib cluster and indicates areas of strong support or resistance.
With price forming a triple bottom and reversing from this level, is it possible that this is the bottom of this downtrend?
Could a new Trend-Based Fib Extension now be pulled from a new Low/High/Low to identify potential areas of support and resistance?
Give it a try and see what you find!
How To Add Emojis To Your ChartIf you publish a lot of research from your TradingView account, emojis will give readers another way to engage with your work. Emojis are recognized globally and can help others better understand how you're thinking or feeling. They can also be used as quick reminders or notes.
Here's how you can add emojis to your chart:
1. Copy and paste an emoji directly into the text box tool like this 👋. If you need help finding an emoji to copy and paste, there are several websites that make this easy to do. You can add emojis to any text box or drawing tool that supports text.
2. The second method is to use the Signpost tool. The Signpost tool is located in the Annotation Tools menu on the left-side of the chart. Select the Signpost, place it on the chart, and then open its settings to add an emoji. The Signpost tool can be used to leave detailed notes at specific price levels. It is easy to use, fully customizable, and it can be dragged to any point on your chart. We've included a few examples on the chart above where we've also customized the background color of each Signpost. 😎🐻 🥶🐂
Thanks for reading! Let us know if you have any questions or comments. Our team is always listening and waiting to help.
Create Alerts (And Wait Patiently!)There are two key steps to creating alerts:
1. Find Important Price Levels
Do your research. Find a price level that looks important and wait. Patience is everything. You have all of the tools available to you to research and follow markets. Whether it's a simple trend line , moving average or a custom Pine Script, use the tools to make better decisions.
2. Create The Alert
Once you've found a level that interests you, create an alert and walk away. Right-click on that exact price level and then select "Create Alert" from the menu. You can also use the keyboard shortcut Alt + A or on a Mac option + A. Lastly, at the top of every chart is an alarm clock icon ⏰. Click that to open your alert menu and get started.
The chart in this example shows a level we're watching. It also shows the alert we created. We have our eyes on a possible Double Bottom and we made an alert to watch that level. We'll get notifications on our TradingView mobile app, through email, and on our desktop. We won't miss it. 😁
Alerts can help you plan ahead and wait. We all know patience is important. So use alerts to express that patience.
Thanks for reading and we look forward to hearing your feedback in the comments below!
Stair Steps Pattern | ULTRACEMCO 🎯The stair steps pattern overview
The stair steps pattern forms along with the trend .It shows an uptrend where the price rises and falls abruptly. The graph reminds the stairs, thus a name of the pattern
In the uptrend, you may notice long consecutive bullish candles. Then, the price adjustment takes place and the cycle starts all over again. The price correction areas create new levels of resistance which soon will be broken again so the uptrend continues.
Best of luck!
IOC| Wyckoff Events and Phases explained 🎯Wyckoff developed a price action market theory which is still a leading principle in today's trading practice.
The Wyckoff method states that the price cycle of a traded instrument consists of 4 stages – Accumulation, Markup, Distribution, and MarkDown.
👉TEXTBOOK EXAMPLE Accumulation Schematic: Wyckoff Events and Phases 👈
And this is the accumulation stage -
1) PS— Preliminary Support, where substantial buying begins to provide pronounced support after a continued down-move.
- Volume increases and price spread widens, signaling that the down-move may be approaching its end.
2) SC—Selling Climax, the point at which widening spread and selling pressure usually in high point and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom.
- Often price will close well off the low in an SC, reflecting the buying by these large interests.
3) AR—Automatic Rally, which occurs because intense selling pressure has greatly decline.
- A wave of buying easily pushes prices up.
- The high of this rally will help define the upper boundary of an accumulation.
4) ST—Secondary Test, in which price revisits the area of the SC to test the supply/demand.
- If a bottom is to be confirmed, volume and price spread should be decline as the market approaches support in the area of the SC.
- It is common to have multiple STs after an SC.
5) SOS—Sign Of Strength, a price advance on increasing spread and relatively higher volume.
6) LPS—Last Point Of Support, the low point of a reaction or pullback after an SOS.
7) BU/LPS- Backing up to an LPS means a pullback to support that was formerly resistant, on diminished spread and volume.
All the phases of accumulation stage-
Phase A:
Phase A marks the stopping of the prior downtrend.
-- Up to this point, supply has been dominant.
-- The approaching cutback of supply is evidenced in preliminary support (PS) and a selling climax (SC).
-- A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume, generally stopping at or above the same price level as the SC.
-- If the ST goes lower than that of the SC, one can anticipate either new lows or prolonged consolidation.
-- Horizontal lines may be drawn to help focus attention on market behavior, as seen in the two Accumulation Schematics above.
Phase B:
-- Phase B serves the function of “building a cause” for a new uptrend
-- In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup.
--There are usually multiple STs during Phase B'
-- Institutional buying and selling impart the characteristic up-and-down price action of the trading range.
--Early on in Phase B, the price swings tend to be wide and accompanied by high volume.
Phase C:
-- It is in Phase C that the stock price goes through a final test of the remaining supply.
-- this marks the beginning of a new uptrend, trapping the late sellers (bears).
-- It indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
-- The appearance of an SOS shortly after a spring or shakeout validates the analysis.
Phase D:
--During Phase D, the price will move at least to the top
--LPSs in this phase are generally excellent places to initiate or add to profitable long positions.
Phase E:
--large operators can occur at any point in Phase E.
--These are sometimes called “stepping stones” on the way to even higher price targets.
👉PRICE ACTION BASED ANALYSIS 👈
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TradeTheTip Global Research Pvt.Ltd.
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How to trade a Descending Triangle Pattern ?Tools Used :
VWAP
Stochastic RSI
Strategy :
1. Look for RSI crossovers (when the blue line crosses the red line either way), in the overbought / oversold zone in particular.
2. For even safer entries, wait for the price to cross the VWAP.
3. Try to buy and sell on or near the lower and upper extremes of the pattern.
4. Look for reversal signals when approaching the extremes, backed by RSI crossovers, e.g., pin bar, or spinning top, or bearish/bullish engulfing, or a doji.
Hope it will be useful.
Follow for more <3
#nifty: understanding the importance of 5 min candlestickThis is pure educational post, and this post is not for analysing further movement.
Many viewers think why I am analysing Nifty on 15 min candlestick, well actually I analyze in multiple TF. If you're a nifty trader, then you need to realize the importance of even 5 min candlestick. One strong 5 min candlestick can be of 50/60 points of nifty. Imagine this one candle goes against you! It's pretty scary, right? This is the major reason to analyze on smaller TF and being as close to SL as possible. People who follow me know how close I am to the bottom/top of the trade.
The Gap up from yesterday's low surely made a bad day for PE buyers. Hence, I do not suggest going against the trade or trade only for intraday.
When and why nifty will touch 14000 all the updates you will find on twitter/YouTube. Fortunately, I stay away from such predictions and I have no idea whether or not it will touch 14000 . What would I or you do even if you know Nifty will touch this or that level? You can't just enter and wait for the target, especially against the trend.
Then how do you trade?
Well, will give simple tips,
1. If you're confused, stay away,
2.Your focus should be on entry and exit.
3. Top most priority to stop loss and risk management.
For nifty-
4. stay with the major trend and major trend is bullish we all know.
5. Do no hold PE for the next day most of the time it will backfire
6. Hold CE for the next day only when you have bagged in good 70/80 points. So in case if opens gap down\flat you will still get out in breakeven at least.
7. Hold CE for the next day only when you're confident and have a clarity that correction has ended.
8. If you bagged in 70/100 pints nifty, then do not let this to run in a loss. If the market goes against you suddenly, get out. You will get another chance.
9. Try to trade after 10 Am after market becomes little stable.
10. Chill out if you miss the opportunity.
11. The most important, do not take a fresh long position at ATH.
Regards
Meet Our New Drawing Tool: Price NoteWe created Price Note to make it even easier to attach notes at specific prices. We know how important it is to keep detailed notes on your favorite charts and our new drawing tool will help.
How to create your first price note 📝
1. Select the tool from the Annotation Tools panel. This is the same place where you find the Text tool.
2. Place two anchor points. The first point sets the price, and the second one is the coordinates of the price label.
3. Add text to appear along the Price Note by opening the settings dialog by double-clicking on the note. You can also change the line and text colors from the settings dialog.
Use keyboard shortcuts when working with Price Note!
1. Press Ctrl (Windows) or command ⌘ (Mac) while placing a point so that the point is drawn to the nearest symbol value. This keyboard shortcut turns on your Magnet.
2. Press the Shift key while placing a point to set the slope of the line in multiples of 45 degrees. Pro tip: this is especially helpful for placing Price Notes at perfect angles. Perfect angles = beautiful chart. 🎨
We hope you enjoy this new drawing tool. By the way, the chart above shows Bitcoin Dominance, S&P 500 , and Tesla . We've placed price notes as examples for each symbol. Feel free share to share any charts you make with a Price Note below in the comments.
Please also share any questions or feedback below. Thanks for reading.
""Classic example of Breakout with Volume"[HAPPSTMNDS]''Happstmnds Recent IPO"
After very good IPO listing
Stock was in consolidation after Steller listing
was not able to break first day high for quit few times
1. Try to break in first attempt(shown in candle '1')
good volumes seen but candle was weak onw
But BO of this candle not happened
2. Again try to BO (shown in candle '2')
good volumes with very strong candle
after forming candle '2'
stock went to consolidation with decreasing volumes
BO of candle '2' happened with strong candle and good volume
then very good move seen
this is live example of breakout with volume
Long/Short Swing Trading On Basis of Market Behaviour Swing Trading in the current Market:
1) Buy Zone: Here we can make the fresh position on confirmation of reversal from support.
2) Sell Zone: Here we can either book our long side profit or make new short position after confirmation near the resistance level.
3) Breadown Zone: When the market gives a breakdown of this parallel channel then possible strong bearish move in the market. After this breakdown, we can exit all long position and make a new fresh short position for a new low.
4) Breakout zone: If market trading above this parallel channel then expected strong bullish movement in the market for new heigh so we can exit from all short side position after the breakout. Also, We can find new breakout in stocks for the long side.
Moods of Candlesticks 🎚How do you read a candle?
The top or bottom of the candle body
will indicate the open price, depending on whether the asset moves higher or lower during the selected timeframe.
If the price trends up, the candlestick is often either green or white and the open price is at the bottom.
viceversa if price trends down.
Why Candlestick is important?
They indicate market turning points early and estimate the direction of the market.
Overall, Candlesticks provide unique insights.
They display reversal patterns which cannot be seen in other types of charts.
They can be used in all kinds of markets.
Detailed Explanation :-
Real Bodies
Each candlestick is composed of a real body and two wicks (which are also called shadows or tails). The real body is the substantial part of the candle. It reflects the difference between the open and close price for that period.
The open and close prices are the first and last transaction prices for that time period. When there is no real body or the real body is very small, it means the open and close prices were the same or almost the same.
The real bodies are typically one solid color, though they may also be hollow, with only their edges displaying a color. Their coloring depends in part on the color scheme used by your charting platform, but white/black and green/red are commonly utilized.
A white or green candle means the price finished higher over that time period. Because the closing price is higher than the open price, the bottom of the real body represents the open price and the top of the real body represents the close price.
A black or red candle means the price finished lower over that time period. Therefore, the top of the real body is the open price and the bottom of the real body is the close price for that time period.
Wicks or Shadows
The wicks or shadows—the thin lines above and below the real body—represent the movements above and below the open and close prices.
The highest part of the wick on top of the real body marks the high price for that period. If there is no upper wick, then the top of the real body was also the highest price during that period.
The lowest part of the wick on the bottom of the real body marks the low price for that period. If there is no lower wick, then the bottom of the real body was also the lowest price during that period.
The difference between the high and low prices is the price range for the period.
The 90-90-90 rule - Why do traders fail?"Many are called, but few are chosen". Ever heard this proverb?
This is certainly true for trading, in fact, there is even a rule in trading about this, the 90-90-90 rule. So what does this rule say?
"90% of traders lose 90% of their money in 90 days"
😱😱😱
That's right, statistics show that 90% of people who start trading lose the majority of their money in less than 3 months. But why is that so? In this post I will try to lay out the reasons for failure, if you are a new or struggling trader, I'm sure you'll find this useful. Let's get into it ...
🤯 EXPECTATIONS
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Many start trading because they've seen or read about success stories, people becoming rich overnight, they might even have a friend who has been successful in trading and they think (to say it in Jeremy Clarckson's famous words) "How hard can it be?. With this approach, failure is imminent...
📐 NOT HAVING A PLAN
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"If you fail to plan, you are planning to fail - Benjamin Franklin . Trading without a plan results almost certainly in failure. Your trading plan should include the definition of your setup, entry, stop loss, profit taking, trade management, risk management and money management.
🔄 NOT TESTING YOUR PLAN
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OK, you have determined how you will trade, what defines your entries and exits, how much of your capital you will risk and how you will manage your trades. But do you know what is the expectancy of that plan? Do you know how much trades you will win on average, and how many you will lose? How much money can you expect to make?
Backtesting your plan, executing it flawlessly time after time on historical data will give you that information and the confidence to execute your plan time and time again without hesitation.
😱 EMOTIONS - THIS IS THE BIG ONE!
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If did not take the time to create a trading plan and backtest it, you don't really know what you are doing and emotions will have the best of you.
Fear, greed, hope, excitement, anxiousness, boredom and frustration will drive your hard earned capital away from you.
Results of these emotions are : trading too much, letting your losers run and cutting winners short, revenge trading, overleveraging etc...
I could write an entire post about each of the emotions and how they can affect you while trading, but it would make this post too lengthy. Just know that emotions are your biggest enemy when trading, for best results you should be in a stoic state when trading.
🕺 EGO
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"The market can remain irrational longer than you can remain solvent.". If you want to prove the market that you are right, you are doomed to fail. The market is always right, no matter what happens, so you better learn to accept that your analysis or prediction of what would happen was wrong and cut your losses. Fast!
📚 LACK OF EDUCATION
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It takes many years to learn a skill or a profession, trading is no different. If you think about making lots of money without putting the time in to learn and test, you pretty much guarantee yourself to fail.
You wouldn't want a lawyer without education to defend you in court, or a self-proclaimed surgeon who learned on YouTube to operate on you, would you?
💰 STARTING CAPITAL TOO LOW
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If you're starting with a low capital, you will tend to try and make it grow fast, resulting in taking too many trades, too high of a risk, too high leverage. If you start with a low capital, you'll have to be OK with the fact that it will grow slowly and that it will take (a lot of) time to build up a sizeable account.
🚦 BUYING OR FOLLOWING SIGNALS
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"There is no such thing as easy money." You might think that you don't have the time to learn about trading, making and backtesting a trading plan. So why not follow signals?
Ask yourself what you know about this service? How profitable is it (and don't just go from the claims they make)? Do you know anything about the reason for a signal, why was it triggered?
Have you talked to other users who used the service, what do they think about it? Why is this person/company selling signals if they are so successful as they claim? Philanthropy ? 🤔
📉 INDICATORS OVERLOAD
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Indicators can help you make decisions for trading, but too many indicators can and will lead to opposite signals or "analysis paralysis.
Most indicators are derived from price, so it makes sense to learn how to read price action and discover the story behind the candles.
🆕 THE NEXT SHINY OBJECT SYNDROME
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You took the time to develop a trading plan and even tested it, but you run into a drawdown... Rather than counting on your experience and the expectancy that you know is there, you look for a new shiny method of trading, until the same thing happens again with this new method ... Rinse & repeat, never giving the chance for your original method, which you know was working when you tested it, to prove its worth ...
Alright, I think I have provided the main reasons why new or inexperienced traders fail. Knowing why they (or you) fail is one thing, doing something about it is not a small feat. But with enough dedication, persistance and the right mindset, you can prove these statistics wrong!
Feel like reasons are missing, let me know in the comments below.
So what is your story?
Are you a successful trader now but recognize these reasons for failure?
Are you a new trader? Was this helpful?
What did/will you do to overcome this?
What did/do you struggle most with?
Help the TradingView community by commenting below.
"Trading is a ruthless business that does not take any hostages, so you better come prepared." - Nico Muselle
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what type of trader🕵️♀️ are you ?✨SCALPING TRADER :>
The main advantage of scalping is the ability to gain profit from small price changes within the shortest time frame possible, which is often amplified by a larger position size. This is an intra-day type of trading which means that positions are closed before the end of the trading day or session
✨DAY TRADER :>
A day trader buys and subsequently sells financial instruments within the same trading day, which means all the positions that he creates are closed on the same trading day. Due to the short-term nature of day trading, there is less risk involved in it as there’s no risk of something happening overnight to cause a big loss.
✨SWING TRADER :>
Swing Trading is a strategy that focuses on taking smaller gains in short term trends and cutting losses quicker. The gains might be smaller, but done consistently over time they can compound into excellent annual returns. Swing Trading positions are usually held a few days to a couple of weeks, but can be held longer.
disclaimer - personal view
Process Of Value Investing EXPLAINED with chart 🎯 Understanding the process of value investing is easy. But it is not as easy to implement
The process starts with screening stocks based on its history.
-----Stock History:
Value investing is about picking blue chip stocks at discounted price. They represent established companies which has a long history trail. Example: stock analysis worksheet does not accept stocks which has less than 10 years financial data. Warren Buffett will probably look at, at least last 15 years data of a company to estimate its intrinsic value.
----Business Fundamentals:
Stock’s 10 years financial data should be checked to estimate the financial health of a company. Idea is to shortlist those stocks which are fundamentally strong. Value investors will invariably invest in only those companies which are fundamental power houses.
---Price Valuation:
This is the ultimate screener. No matter how established is the company, no matter how strong are its business, it is not enough. Value investors will not rest till it calculates the intrinsic value. To be more sure of the calculation, they will also apply a suitable margin of safety. Once this is done, comparing current price with intrinsic value value will highlight if the stocks is undervalued or overvalued. Undervalued stocks becomes a good buy.
Example
..Consider the case of Tata Steel & Tata Motors. These are the flagship companies of the Tata Group. Probably they will not cease to do business in next 100 years. But it is facing hard times since last 5-6 years.
..The company is doing everything to maintain the shareholders value. Today (in 2020), Tata Steel has takeover Bhushan Steel. Tata Motors has launched new premium cars. This is a hint of their competence.
..A common man must always be in look-out of such business to buy stocks. When we see the past 10 years performance of these companies, it is hard to estimate their intrinsic value. It is because, in the last 10 years, the company has not performed as well. They have been making low sales and lower profits.
..But looking ahead in future, the prospects looks more promising.
CONCLUSION :-
If you want to invest in stock market, you must learn to practice value investing. The investor must at least know how to value stocks of companies. This way he/she will at least not invest blindly.
There are two main ways of valuing stocks. One is done using financial ratios, and other is through intrinsic value calculation.
For people who do not want to go into the hassle of intrinsic value calculation can follow the financial ratio approach. But it is not as reliable.
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