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Important types of chartsHey everyone! In this post, we are going to talk about different types of charts that are used in technical analysis. Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading! Charts are used to illustrate change in prices over different time frames. It’s a graphical method of showing the historical price information. Charts are two-dimensional and have an x-axis (horizontal) and a y-axis (vertical). The x-axis generally represents time whereas the y-axis indicates the price. 👉 Line chart • “Line charts” are formed by connecting the closing prices of a specific stock over a given period of time. • It is particularly useful for providing a clear visualisation of the underlying trend. • It only considers the “closing value” of the stock and ignores the open, high, and low values. • Since it only uses the closing prices, hence it less noisy as compared to candlestick or bar charts. 👉 Bar chart • A bar shows the high price for the period at the top and the lowest price at the bottom of the bar. • Each bar displays the open, high, low, and close prices (OHLC). • Small lines on either side of the vertical bar serve to mark the opening and closing prices. • The opening price is marked by a small tick to the left of the bar; the closing price is shown by a similar tick to the right of the bar. 👉 Candlestick chart • A candlestick chart provide visual insight to current market psychology. • It displays the open, high, low, and closing prices (OHLC). • The rectangular section of the candles is called the real body, which is the range between the session’s open and close. • Bearish candle- When the close of the session is lower than the open. • Bullish candle- When the close of the session is higher than the open. • The thin lines on each side of the candle are called the wicks/shadows and they represent the session’s price extremes. 👉 Heikin Ashi chart • Heikin Ashi uses a modified formula of close-open-high-low (COHL). • Normal candlesticks keep changing colour depending on the OHLC even if the price is moving heavily in one direction. But the Heikin Ashi candles stay predominantly mono-coloured during trends. • Candles with no lower "shadows" indicate a strong uptrend. • Candles with no upper "shadows" indicate a strong downtrend. • Candles with a small body surrounded by upper and lower shadows indicate a trend change. 👉 Renko chart • A new brick is created when the price moves a specified price amount. The brick only forms on the chart once the price has moved the set amount. • A brick can be of any size (called the box size). Box size can be set manually or it can be calculated using the Average True Range (ATR). • There is a time axis on Renko charts, however, the time scale is flexible. This means that the bricks are not formed at an equal pace. • Renko charts typically only use closing prices and mitigate the noise to a higher extent, making trend identification easier. 👉 Kagi chart • When the price of the asset rises above the previous high price, a thick line is formed, signalling an increase in the demand. • When the price drops below the previous low, a thin line is formed to indicate an increased supply. • When there is a price reversal of a certain threshold amount, the chart starts to reverse the direction. • Swing highs are called shoulders and the swing lows are called waists. • Rising shoulders = Bullish. Falling waists = Bearish 👉 Point and Figure chart • A P&F chart is used to visualize price movements and trends without any dependence on time. • It makes use of columns made up of stacked Xs or Os, where each one stands for a specific amount of price change. • In general, X illustrates rising price, while O represents a falling price (Some people use the reverse too). • Point and Figures also emphasize on the closing prices only. Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter , Instagram , and YouTube for more awesome content! 💘
NSE:LTFEducation
by TradingView
10
Elliott Wave PatternsTried to capture Elliott Wave Theory Patterns:- Elliott Wave Theory is named after Ralph Nelson Elliott (28 July 1871 – 15 January 1948). 3 Cardinal Rules of the Elliott Wave Theory Rule Number #1: Wave 3 can NEVER be the shortest impulse wave Rule Number #2: Wave 2 can NEVER go beyond the start of Wave 1 Rule Number #3: Wave 4 can NEVER cross in the same price area as Wave 1 Wave 2 will develop into a zigzag, flat, or combination. Wave 2 cannot be a triangle in its entirety Wave 4 will develop into a zigzag, flat, combination, or Triangle. On rare occasions, Wave 5 will not move beyond the pivot of wave 3. This is known as Truncation Ratios:- Ratios for Wave 2 Fibonacci Rule for Wave 2: Wave 2 is always related to Wave 1. Common Ratios for Wave 2: Wave 2 = either 50% of Wave 1 or 62% of Wave 1 Ratios for Wave 3 Wave 3 is related to Wave 1 by one of the following: Wave 3 = either 1.62 x length of Wave 1 or 2.62 x length of Wave 1 or 4.25 x length of Wave 1 The most common multiples are 1.62 and 2.62. However, if the 3rd Wave is an extended wave, then 2.62 and 4.25 ratios are more common. Ratios for Wave 4 Wave 4 is related to Wave 3 by one of the following: Wave 4 = either 24% of Wave 3 or 38% of Wave 3 or 50% of Wave 3 The 24% and 38% are the most common ratios for Wave 4 Ratios for Wave 5 Wave 5 has two different relationships. Both are shown below. If Wave 3 is greater than 1.62 or extended, then Wave 5 ratios are as follows: Wave 5 either = Wave 1 or = 1.62 x Wave 1 or = 2.62 x Wave 1 Wave 5 Extended if Wave 3 is less than 1.62 X Wave One 5 = .62 X Length of 0 to 3 5 = 1 X Length of 0 to 3 5 = 1.62 X Length of 0 to 3 If Wave 3 is less than 1.62, Wave 5 ratios are as follows: When Wave 3 is less than 1.62, the 5th Wave overextends itself. From research, the ratio of Wave 5 will be based on the entire length from the beginning of Wave 1 to the top of Wave 3. Extended Wave 5 = either 0.62 x length (beginning of Wave 1 to top of Wave 3) or = length of (beginning of Wave 1 to top of Wave 3) or = 1.62 x length of (beginning of Wave 1 to top of Wave 3) Regards, SG
NSEIX:NIFTY1!Education
by subhagghosh
29
Types of participants in the derivatives marketHey everyone! Last week we talked about the basics of derivatives and what all different derivative instruments are available in the markets. In this post, we will talk about the types of people who use derivatives and why they exist. There are broadly three types of participants in the derivatives market: → Hedgers → Traders (also called speculators) → Arbitrageurs. An individual may play different roles at different times. Hedgers → They employ derivatives to mitigate the risk they suffer from fluctuations in the pricing of the underlying assets. → Institutions such as investment banks, central banks, hedge funds, etc. all use derivatives to hedge or reduce their exposures to market variables such as currency exchange rates, interest rates, equity values, bond prices, and commodity prices. Speculators/Traders → The speculators are primary participants in the futures market. → They try to predict the future movements in prices of underlying assets and position themselves accordingly. → Speculators can be individual traders, proprietary trading firms, hedge funds, or market makers. Arbitrageurs → Arbitrage is a deal that produces profit by exploiting a price difference in a product in two different markets. → Arbitrage occurs when a trader executes a simultaneous purchase and sale of the same asset in different markets in order to gain from tiny price differences between them. → The arbitrage trade is often short lives because the arbitrageurs would rush in executing these transactions, thereby closing the price gap at different locations. Thanks for reading! Hope this was helpful. See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter , Instagram , and YouTube for more awesome content! 💘
NSE:ADANIPOWEREducation
by TradingView
1
One chart, different trading systems!Hi all, hope you guys are doing well. We retailers spend a lot of time in searching for that "holy grail" in trading. The majority of the time our search is centered around different strategies. However, in my opinion, "Strategy is overvalued whereas risk management is undervalued" . A chart can be analyzed in different ways by different traders. A trader using patterns will analyze the same chart with a different perspective as opposed to a trader using pure support-resistance levels or a trader using indicators such as moving averages. The aim of this post is just to make you understand that you shouldn't run after different systems. Rather, focus on managing the risk. Exhibit 1: The Cup and Handle system Exhibit 2: The Support-Resistance system Exhibit 3: The Triangle pattern system Exhibit 3: The Moving averages system Thanks for reading. I hope you found this helpful! 😊 Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk. Happy learning. Cheers! Rajat Kumar Singh (@johntradingwick) Community Manager (India), TradingView
NSE:SOLARINDSEducation
by johntradingwick
32
Nifty calculations & projectionsWhat I have tried to explain is Nifty complete cycle structure: cycle (1): wave 1, has been completed @1380 (sept 94) wave 2, has been retraced to@ 810 (nov. 98) Now against there is a good impulse ended 1816 (Feb 00) but next wave retraced below the origin of wave 1 (this could be sub cycle) sub cycle wave 2 got completed 847 (oct 01) link: Now sub cycle wave 1, 2 already completed, now its turn for wave 3 which eventually got stretched & completed @6300 (dec 07), wave 3 got corrected in form of wave 4 got completed above sub wave 1 region @ 2260 (oct 08) Wave 5 against got completed as a extended wave and got completed @ 12300 (jan 20) sub wave marking for wave 5 also mentioned in below chart Now on the completion of sub wave cycle entire structure got corrected in form of 2020 crash 7500 (Mar 20) and from 2020 nifty is in its final leg of cycle wave 5.. still uncompleted. Here also sub sub cycle wave 3 & sub cycle wave 3 is in extended mode as marked in chart Here, wave numbering can be done in multiple ways, however, I have chosen one as per my understanding. Here, wave 3(5) got completed @ 18600 (oct. 21) & corrective 4 completed as a complex correction as mentioned in chart 15100 (Jun 22) It's look like we are on the final leg for wave 5 (5) for nifty, where, no one can say either wave 3(5 of 5) completed or not. Until nifty is trading above mid line of wave 3 channel we don't recommend to shot it. chart shared I have covered the detailed post on channels, any one interested can check it out in my old TW post..
NSE:NIFTY
by ShubhamKatiyar
16
Happy Independence Day 2022Happy Independence Day! (For all the Flag patriots, know that these flag-drawings are just symbolism. These are not Indian National Flags, since they dont hv Ashok Chakra! nor official correct dimensions.) Weekly / hourly Flag patterns ! Pick your Winners! Axis(w)--> Nelco (w)--> Sbi (w)--> Bajaj Electrical (4h)--> Airtel (w)--> Jindal Stainless(1h)--> ARVIND FASHION (w)--> Jubil food->(4h) cnx_pse (w)-> HDFCBANK (w)--> EnginnersIN (4h)--> Deepak Nitrate(w)--> Polycab (w)--> Canara bk (1H)--> Godrej Consumer(2H)--> Titan(15)--> Kotak bk(1H)--> RBL bk (1H)--> M&M FIN (15)--> infy (15)--> Adani Power (15) --> HDFC bk (15)-->
NSE:INDIANB
by Einstein15
26
ABC Pattern- Optimal Entry TechniquesHi, This idea is about the very promising ABC pattern and the most optimal ways to enter into this pattern. ✅ABC Pattern This is considered as a continuation pattern. There has to be a strong trend up/down in the background. Wave A: Minor correction against larger trend, usually not more than 5-10% Wave B: Another attempt to push the price higher but could not break the previous highs Wave C: breaks the low A but has less momentum than wave A. Weak stops are taken below A I am presenting four techniques of entering into this pattern, in the anticipation of a continuation of the prevailing trend. The techniques used, however, depend upon the traders' appetite and temperament. Let's start.. ✅Minimum Risk Entry >The entry point is near the low C >C should have less momentum than A >Price barely breaks the low A >There are wicks at the low of Candles at C >Stop is placed under the low of C, so less risk more reward potential ✅Confirmed Entry >Entry is at the break of swing high B >The price makes a higher-high so structural change is confirmed >The break often comes with good volumes & strong closing candles >SL under C is wider than 1 in this case >This technique is used when, in wave C, there are few weak candle closings below A ✅Trendline Entry >Entry is at the break of TL >The break often comes with good volumes & strong closing candles >SL is wider than 1 but lesser than 2. So less riskier >This technique is used when, in wave C, there are few weak candle closings below A ✅ABC-W Entry >A unique entry technique >The price breaks deeply below B and then retests at W >At this point it seems that price will continue down but >The price could not hold down and again breaks out of W, giving us a breakdown failure entry >You would see a usually sharper continuations as many traders, who entered short positions, would start exiting in a hurry Stop loss in all the cases is placed under the low of wave C and trailed as per traders' time horizon. These are relatively small corrective patterns so you can expect sharp continuations and take targets measured equal to the strong impulsive move in the background. I hope it was useful. Thanks for reading. @Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
36
Basics of DerivativesEver wonder what derivatives are? Check out this handy guide! 😉 A derivative is a contract or a product whose value is derived from the value of some other asset known as underlying. A variety of underlying assets serve as the foundation for derivatives. These include: → Financial assets such as Shares, Bonds, and Foreign Exchange. → Metals such as Copper, Zinc, Gold, Silver, etc. → Energy resources such as Crude oil, Natural Gas, etc. → Agricultural products such as Wheat, Cotton, Sugar, Coffee, etc. Cotton Futures Gold Futures Derivative Instruments Forwards It is a contractual agreement between two parties to buy/sell an underlying asset at a certain future date for a particular price that is pre-decided on the date of the contract. Both the contracting parties are committed and are obliged to honor the transaction irrespective of the price of the underlying asset at the time of delivery. The terms and conditions of the contract are customized to cater to the needs of both parties. These are Over-the-counter (OTC) contracts, meaning they are a deal you make directly with a bank or a dealer. As a result, there is always counterparty risk involved. Futures Futures are standardized contracts similar to a forward contract, except that the deal is made through an organized and regulated exchange rather than being negotiated directly between two parties. The arrangements come with a fixed maturity date along with uniform terms for all the parties involved. In simple language, futures are exchange traded forward contracts. The futures contract has little to no counterparty risk since the exchange is acting as a mediatory. Options An Option is a contract that gives the right, but not an obligation, to buy or sell the underlying on or before a fixed date and at a stated price. While the buyer of the option pays the premium and buys the right, the writer/seller of the option receives the premium with the obligation to sell/ buy the underlying asset if the buyer exercises his right. There are two types of options: → American → European American options can be exercised at any time prior to their expiration while the European options can only be exercised on the expiration date. In India, European options are used. Swaps A swap is an agreement made between two parties to exchange cash flows in the future according to a prearranged formula. A random variable (such as an interest rate, foreign exchange rate, commodity price, etc.) is used to determine at least one of these series of cash flows at the moment the contract is initiated. Swaps are, broadly speaking, a series of forward contracts. They help the participants manage risk associated with volatile interest rates, currency exchange rates, and commodity prices. Thanks for reading! Next week we’ll talk about the types of people who use derivatives and why they exist. Stay tuned! See you all next week. 🙂 – Team TradingView Feel free to check us out on Instagram , YouTube , and Telegram for more awesome content! 💘
NASDAQ:TSLAEducation
by TradingView
2
GBPUSD bulls step back from key resistance ahead of UK GDPGBPUSD retreats from the 11-week-old descending trend line as the traders await the first readings of the Q2 2022 UK GDP. In addition to the trend line hurdle, the 38.2% Fibonacci retracement of the March-July downside, near 1.2345, guards the pair’s immediate upside. Following that, the 100-DMA hurdle surrounding 1.2435 will be in focus. In a case where the quote remains strong past 1.2435, the odds of witnessing a run-up towards May’s peak of 1.2665 can’t be ruled out. On the contrary, GBPUSD sellers can aim for the 21-DMA support near 1.2075 during further weakness. It’s worth noting, however, that the quote’s downside beneath 1.2075 will have the two-month-old resistance-turned-support line, around 1.1955, as the last defense for buyers. In a case where the quote remains weak past 1.1955, the odds of its south-run towards the yearly low near 1.1860 can’t be ruled out. Overall, GBPUSD bulls are in the driver’s seat ahead of the key UK GDP data. It should be observed that the British economy is likely to witness recession and hence positive surprise will be welcomed with zeal considering the pre-data bullish bias.
by MTradingGlobal
3
The Cup & Handle patternHey everyone! 👋 Today we are going to share an informative write-up about the “Cup and Handle” pattern along with a few exhibits that may help you solidify your understanding of this chart pattern. Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading! The post will shed some light on the following topics: → Basics and identification of the pattern → Components → Important aspects What is a Cup and Handle pattern? • The Cup and Handle is a bullish continuation pattern that resembles a cup with a handle. • The cup is visualized as the alphabet "u" and looks like a rounding bottom pattern. • The handle is formed as a range or a smaller “u”. • The cup marks a consolidation phase whereas the handle has a slight downward move, which marks a retest phase. • The handle is meant to signal a buying opportunity. When this part of the price formation is over, the stock may reverse the course and resume the prior uptrend. Components of a Cup and Handle pattern: The cup and handle chart has 3 main components: • Cup • Handle • Neckline Important aspects: 1. Prior Trend: The cup and handle pattern is a bullish continuation pattern, hence the prior trend should be an uptrend. 2. Cup length : In general, the cups with longer and more "U" shaped bottoms that resemble a rounding bottom, provide a stronger signal. This ensures that the cup is a consolidation pattern with valid support at the bottom of the “U”. The perfect pattern would have equal highs on both sides of the cup, but this is not always the case. In general, cups with sharp "V" bottoms should be avoided because there is almost no consolidation in this case. 3. Cup depth: Normally, the cup should not be overly deep. In practice, the cup depth can be up to 60-70% of the last swing move. (This can vary widely, though.) 4. Handle: The handle can occur in the form of a flag, a pennant, or a rectangular consolidation. This is the final retracement phase before the impulsive move higher. By and large, the handle can retrace anywhere between 40-60% of the depth of the cup. 5. Breakout: Bullish confirmation comes when the pattern breaks above the neckline (made using the prior highs) with a good volume. 6. Volume: In general, the volumes should decrease during the formation of the base of the cup as well as during the formation of the handle. Conversely, the volumes should pick up when the stock begins to make its move higher, back up to test the previous high. 7. Target: Using the measurement objective, the target comes out to be equal to the depth of the cup. It can be measured by calculating the distance between the bottom of the base and the neckline. 8. Stop-loss: Ideally, the stop loss is placed at the lowest point of the handle. But if the price oscillated up and down a number of times within the handle, the stop-loss can also be placed below the most recent swing low. Exhibit: Cup and Handle pattern with a failed breakout Thanks for reading! As we mentioned before, this isn't trading advice, but rather information about a tool that many traders use. Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter , Instagram , YouTube , and Telegram . 💘
NSE:APARINDSEducation
by TradingView
16