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Learning Stages in TradingIn my opinion learning in any field is connected to the "Four stages of Competence" and trading is no different. This post also answers why most traders lose in the stock market. Following are the four stages which every trader has to pass before attaining success. Unconscious Incompetence ---------------------------------- This stage belongs to the newbie traders who ignore all the knowledge part. They don't think that they need any kind of knowledge to make money. Their greatest desire is to make money in shortest possible duration so they rely on tips/news for trading. Ultimately they lose and i think more than 50% traders quit at this stage only. Conscious Incompetence -------------------------------- At this stage the trader realizes that ignorance is not a bliss. He has already lost in the markets so he thinks that may be he lacks knowledge. He starts reading books; attends online webinars; and attend courses/classes. Although he is gaining knowledge yet he confused with tons of indicators and strategies etc. He still loses because due to these confusions their is no solidarity in his plans. He has got a poor risk appetite. His ego of being right and urge to win every trade widens his losses. I think less than 30% traders survive up to this stage. Conscious Competence ------------------------------ Finally after so many losses the confusion leads to simplicity. The reader gets more systematic with setups and all, but still struggling with psychological issues like fear, greed, lack of discipline, insufficient capital etc. At this stage, I suppose 85% traders would lose their entire capital and give up scolding themselves for choosing a wrong career. Left with less than 15% traders. Unconscious Competence --------------------------------- A very few who reach at this stage and still left with funds make money from money. Trading selective setups becomes an involuntary action for them. They have realized the hardest truths of trading so psychological hurdles disappear from them. They belong to that <10% successful traders. Which stage do you belong? Do write in the comment section. Keep liking for more interesting stuff in the coming days.
NSE:NIFTYEducation
by Bravetotrade
57
Part 1: Equity Derivatives - A Beginner's GuideWhat are derivatives? Basic interpretation : something which is based on another source. A derivative is a contract or product whose value derives from the value of the base asset. The base asset is called the underlying asset. i.e., Sugar prices will rise if sugarcane prices increase due to low production. It means sugarcane is the underlying asset of sugar because the value of sugar is associated with sugarcane. There is a broad range of underlying assets: Metals: lead, gold, silver, copper, zinc, nickel, tin, etc. Energy: coal, natural gas, etc. Agri commodities: corn, cotton, pulses, wheat, sugar, etc. Financial assets: Stocks, bonds, forex, etc. There are two types of derivatives: 1. Exchange-traded: A standardized derivative contract, listed and traded on an organized exchange. 2. Over-the-counter/off-exchange trading/pink sheet trading: A derivative product in which counterparties buy or sell a contract or product at a negotiated price without exchange Instruments of derivatives market: There are four instruments in the derivatives market: 1. Forward: Forward is a non-standard agreement or agreement between two parties that allows you to buy/sell the asset at the agreed price for a pre-decided date of the contract. Forwards are negotiated between two pirates, so the terms and conditions of the contract are customized. These are called over-the-counter(OTC). 2. Future: Future contracts are similar to forwarding contracts, but the deal is made through an organized and regulated exchange rather than negotiated between two counterparties. A futures contract is an exchange-traded forward contract. 3. Options: A derivative contract that gives the right but not the obligation, to buy or sell an underlying asset at a stated strike price on or before a specified date. Buyers of options- Pays the premium and buys the right Sellers of options - Receives the premium with the obligation to buy/sell underlying assets. 4. Swap: A swap is a derivative contract between two counterparties to exchange for the cash flows or liabilities from two different financial instruments. It is an introduction article. I will cover all these topics in detail. Swap helps participants manage risk associated with volatility risk interest rate, currency exchange rates, & commodity prices. Index: Index = Portfolio of securities An Index shows how investors experience the economy. Is it progressing or not? A Stock market index gathers data from a variety of companies of industries. The data forms an overall picture and helps investors compare market performance through past and current prices. Financial indices represent the price movement of bonds, shares, Treasury Bills, etc. Importance of Index: 1. An index is an indication of a specific sector or gross market. 2. It helps investors to pick the right stock 3. An index is a statistical indicator. It represents an overall change or part of a change in the economy. 4. In OTC & exchange-traded markets, It used as an underlying asset for derivatives trading 5. An index helps to measure for evaluation of portfolio performance. 6. Portfolio managers use indices as investment benchmarks. 7. Index illustrates investor sentiments. Types of index: There are four classifications for indices: Equal Weighted Index: Each company is given the same weightage in the composition of this index. Equal-weighted indexes are more diversified than market capitalization-weighted indexes. This index focuses on value investing. Free-float index: In finance, equity divides into different among various stakeholders like promoters, institutions, corporates, individuals, etc. A tradable stake for trading is called a free-float share. i.g, If XYZ company has issued 5 lakh shares with the face value of Rs 10, but of these, 2 lakh shares are owned by the promoter, then the free-float market capitalization is Rs 30 lakh. Free-float market capitalization: Free-floating shares * Price of shares Index: BSE SENSEX Market capitalization-weighted index: In this index, each stock is given weightage according to its market capitalization. High market cap = High weightage Low market cap = low weightage Market Cap= Current market price * total number of outstanding shares i. e, if XYZ company has 1,000,000 outstanding shares and a market price of 55 rs per share will have a market capitalization of 55,000,000. Index: Nifty 50 Price Weighted Index: High price = More weightage Low price = Low weightage Popular price-weighted index: Dow Jones industrial average & Nikkei 225 I will upload second part soon. Thank you :) Money_Dictators
NSE:NIFTYEducation
by Money_Dictators
12
How to add multiple charts in Tradingview ideas?Hey everyone! 👋 If you are new or have recently started posting ideas, you may have noticed that a lot of people put multiple charts in their posts. This makes their ideas more thorough and resourceful. So, the question arises, how do you put multiple charts in a single idea? Don’t worry, we’ve got you covered. This short visual guide will help you in understanding the complete process of creating exhaustive ideas containing multiple charts. 1. When you are on the idea publishing interface, you will notice a chart-like icon. This option is used to insert ideas and chart snapshots in your post. 2. If you click on this icon, it will open up a blank field with an option labeled “insert”. All you have to do is, insert the links to your secondary charts in this field. 3. To get the link to your charts, click on the “camera icon” at the top right-hand of the screen, and then click on “copy link to the chart image”. 4. Then come back to the field mentioned in point 2. Paste your link and click insert. 5. Your chart will automatically get inserted into the post along with relevant syntax. You can repeat the process as many times as you need to insert the charts. Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter and Instagram for more awesome content! 💘
LEducation
by TradingView
3
WHAT IS OPTION GREEKS ?NSE:BANKNIFTY Introduction Option trading is an exciting process and almost every market participant has at least experienced the thrill of trading options, almost all the time with unsatisfactory results. To avoid such accidents an option trader seeks different tools to trade sucssessfully, The most important of tools are the Option Greeks and they are usually the first metric looked upon by option traders. What are Option Greeks? Options are derivatives of underlying assets ( curd is a derivative of milk, so the change in the quality of milk will result in a change in the quality of the curd derived ) similarly, Greeks are a way to measure the sensitivity of the price of the option to various factors. The price of the option premium does not always move in conjunction with the price of the underlying asset and it is important to understand the different factors that affect the change in the price of the premium. With the help of the option greeks, a trader will be able to measure the rate of change of different factors affecting the option premium. # You can check the option greeks by using zerodha option chain or any other trading platform What is DELTA? The first Greek is Delta, which quantifies how much an option's price is projected to fluctuate for every $1 that the underlying securities or index changes in price. For example,A Delta of 0.50 indicates that the option's price will fluctuate 50 point for every 100 point movement in the price of the underlying stock or index. #Delta for call option ranges between 0 to 1 and for put option ranges between -1 to 0. >ATM options have a delta of 0.5 >ITM option have a delta of close to 1 >OTM options have a delta of close to 0. Delta = Change in option premium/ Unit change in the price of the underlying asset. #The following example should help you understand this better – Nifty is currently trading at 16000 Option Strike = 15900 Call Option Premium = 150 Delta of the option = + 0.60 Nifty is expected to reach 16200 What is the likely option premium value at 16200 ? Well, this is fairly easy to calculate. We know the Delta of the option is 0.60, which means for every 1 point change in the underlying the premium is expected to change by 0.60 points. We are expecting the underlying to change by 200 points (16200 – 16000), hence the premium is supposed to increase by = 200*0.60 = 120 the new option premium is expected to trade around 150 + 120 = 270 What ia gamma? Gamma is used to measure the delta’s change relative to the changes in the price of the underlying asset. If the price of the underlying asset increases by 1point, the option’s delta will change by the gamma amount. The gamma value will also range between 0 and 1. Gamma = Change in an options delta / Unit change in the price of the underlying asset. What is Theta? The Theta or time decay factor is the rate at which an option loses value as time passes. Theta is expressed in points lost per day when all other conditions remain the same. theta is always shown as negative number because option value is depriciating as the time is passing. Theta is the biggest enemy of option buyer cause it reduces the favourable outcome of option buyer by depriciating the option price. for example,A Theta of -15 indicates that the option premium will lose -15 points for every day that passes by. if an option is trading at Rs.290/- with a theta of -15 then it will trade at Rs.275/- the following day when other factors remain constant. Theta = Change in an option premium / Change in time to expiry. This is the graph of how premium erodes as a time to expiry approaches. This is also called the ‘Time Decay’ graph. What is Vega ? It is intended to tell you how much an option’s price should move when the volatility of the underlying security or index increases or decreases. It is the change of an option premium for a given change (typically 1%) in the underlying volatility. 1. Vega measures how the implied volatility (IV) of a stock affects the price of the options on that stock. 2. Volatility is one of the most important factors affecting the value of options. 3.A drop in Vega will typically cause both calls and puts to lose value. 4. An increase in Vega will typically cause both calls and puts to gain value. Vega = Change in an option premium / Change in volatility. What can option Greeks do for you? 1.Help you measure the possibility that an option will expire in the money (Delta). 2.Estimate how much the Delta will change when the stock price changes (Gamma). 3.Get a feel for how much value your option might lose each day as it approaches expiration (Theta). 4.Understand how sensitive an option might be to large price swings in the underlying stock (Vega). “With the help of Greeks, an options trader can make more analyzed decisions about which options to trade, which strike price to trade and when to trade. Since there are a variety of market factors that can affect the price of an option in some way, assuming all other factors remain unchanged, we can use Greeks and determine the impact of each factor when its value changes.” I Hope you found this helpful. Please like and comment. Happy Trading!
NSE:BANKNIFTYEducation
by SANJAYPATIDAR_
28
#Nifty's route=map till weekly expiryPlease have a look into the chart to get all details, I have tried to draw everything as much i found according to my study. This Analysis has Based on Harmonic Pattern, Fibo & Price action. Note:- Any of the mentioned levels will be considered for LONG or SHORT, when a fresh candle starts forming above or below the level respectively. If agree with the Analysis, Then Please LIKE....As well as can Follow me to getting my future analysis. HAVE A GOOD GREEN TRADE
NSE:NIFTY
by TradeInKey
23
Head and Shoulders at PIDILITINDBe Cautious #headandshoulders #pattern (trend reversal) at #PIDILITIND (Pidilite Industries Ltd) weekly chart. The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end. ONLY FOR #educational NOT SEBI REGISTERED. #LEARNEARN (DONT TRUST ANYONE) #nifty50 #sharemarket #BREAKOUTSTOCKS #Multibagger #sharemarket #sharemarketindia #sensex #technicalanalysis #kukiinvest #Chartanalysis #headandshoulders #breakdown
NSE:PIDILITIND
by Usemerr
8
How to use the heatmap on TradingView? Hey everyone! 👋 You may have already seen plenty of cool TradingView heatmaps floating around social media. In case you haven’t, here is what a heatmap looks like: This short visual guide will help you in accessing and customizing our awesome heatmap feature. 1. When you open TradingView, you will see a toolbar at the top with various options, including “Screeners”. 2. If you hover over it, you will see 5 options, namely: - Stock screener - Forex screener - Crypto screener - Stock heatmap - Crypto heatmap You can choose the heatmap as per your preference. 3. Let’s assume you want to check the “Stock heatmap”. So, you just click on it and it will display the heatmap of the US market by default. There is an option at the top-left corner to change the “source” of the heatmap. 4. When you click on the source option, it will open a list from which you can select your desired source. 5. As soon as you change the source, the heatmap will automatically get updated. You can customize the heatmap by change %, sectors, market capitalization, or performance. 6. Last but not least, you can also save and share your heatmap directly from the social sharing button. 7. If you need more help, you can check out this short video tutorial - How to use the heatmap on TradingView? Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter and Instagram for more awesome content! 💘
NSE:NIFTYEducation
by TradingView
20
COPPERCopper has given breakdown along with good intensity of volume, also formed 5 wave declined as a wave i after forming triangle as a wave X, wave ii has retraced very minor pullback, and now possibly wave iii is unfolding, which is making sentiments more bearish along with trend indicators supports in same bias, all the key levels are mentioned on chart. Overall wave structure on daily chart breakdown with good intensity of volume RK's magic cloud sell activated in Daily RK's magic cloud sell activated in hourly macd in weekly running negative macd in daily running negative macd in hourly turned negative rsi in hourly overall key levels are mentioned on chart Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
CAPITALCOM:COPPERShort
by RK_Chaarts
4
MOST RELIABLE CANDLESTICK PATTERN Pattern name: Bullish Engulfing Pattern Type : Bullish Reversal No. of Candles : 02 How to Identify it ? 1)There must be a preceding Downtrend. 2)A short Red candle followed by a long Green candle. 3)The Green candle should opens lower & closes higher than the Red candle. 4)The Red candle should be completely engulfed by the Green candle. Psychology behind it : 1)The Bears lose momentum & the Bulls take charge and managed to close above the red candle. 2)It implies the bulls have fully override the bears. How to trade it ? 1)Look for the Bullish Engulfing at the bottom of the Downtrend. 2)Upon confirmation, open a Long position in the 3rd Candle. 3)Place a Stoploss below the low of the Green candle. Happy Trading :) -Divyaa Pugal
HEducation
by Divyaapugal
35
A beginner's guide to trading - Chapter 2In Chapter – 1, we have seen about candlesticks. Today we are going to see about supply & demand concept with candlesticks. Lets first see about the normal concept people follow for supply/demand zone. I have used numbers 1,2,3 and 4 to mark supply and demand zones in this post. In the above chart 1 acts as demand zone as price had good upside move from it. When price reach 2, as per normal demand zone concept, people think there will be pending orders to buy from big institutions at that level and we can buy. At 2 buyers were trying to take charge and we had a big bull candle. That was not institutional buyers, but from retails traders. It was proved as price did not move much from that. At 3 price was broken downside by a big bear candle. And at that level demand zone became supply zone. At 4 price had a nice fall. This is an example about how a demand zone becomes supply zone. Trend strength determines whether a particular level will act as supply or demand zone. Now we will see another example to understand trend strength. In the above chart, price had good move from 2 and becomes demand zone. When price reach 3, there was small upside move, but price fall from 4. Look at the arrow marks. When bearish strength increases, the demand zone becomes supply zone. Simply buying whenever you see a demand zone wont work. It wont give you consistent money. But understanding the trend strength and trading according to it will help you to make consistent money. In the chart above, at 3 price showed bearish strength & there was not even a small fight from bulls, instead bears won without much competition and price fall down. In the chart above, before price break down @ 3, note how bull strength was reducing which I have marked. Always trade with the knowledge of trend strength. Always trade with stop loss. Always trade with the knowledge of trend direction.
NSE:AXISBANKEducation
by vanathi
34
How to see idea statistics on TradingView?Hey everyone! 👋 Have you ever wondered how to check your post statistics such as views, comments, and likes, without going through each and every post? Today we wanted to drop this short visual guide to help you out in achieving this. 1. When you open TradingView, you will see a toolbar on the right side of the screen. 2. Click on the bulb-like icon (5th position from the bottom). 3. As soon as you click on the bulb icon, it will list all your ideas, along with all the statistics. 4. You can notice the likes, comments, and views listed on the side of your posts. You can use the “star” icon to set the post in the “favorite category”. 5. There is also an option to filter the posts based on favorite ideas or private ideas. Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter and Instagram for more awesome content! 💘
AEducation
by TradingView
1
Five Important Lessons to Learn From the MarketHere are a few important lessons that can help traders and investors to survive in the markets and become profitable over a period of time. Risk Management ---------------------- Whether you are an options trader or cash market investor, risk management is the most important concept to deal with. You should always prescribe our risk before entering the trade. Adjust position size so that the risk does not exceeds the prescribed limit. After entering the trade, you can either go for reward which could be double, triple or more than your risk OR you can trail your stop loss to go for larger gains, in case momentum is strong. Nothing Works All the Time --------------------------------- A trader can utilize a custom system/strategy, can take discretionary decisions or use an algorithm to take decisions. But remember that nothing is going to work all the time. You are bound to miss moves, exit early or get shaken out before the move actually starts. You need to think about longer term perspective. The opportunities that you missed were just a few of next 100 trades that you are going to take. But if you are missing 6 out of 10 opportunities, you need to adjust your strategy. All Strategies are not for Everyone ------------------------------------------- You might have seen or heard about traders who made huge money using their own strategy. But trust me, even if you get that strategy for free there are higher chances that you are going to lose. It is not just the strategy but years of hard work by the author that made it perfect for him. He would know all the nuances and the environments where it worked well. Also, the nature of a strategy should be directly proportional to your personality. An aggressive strategy for one trader can be too slow for the others. Start Small -------------- If you are not so familiar with the stock market then you need to start with small capital. This will automatically reduce your risk and position size. Your profit will also be small but learn to make your calculations in percentage terms. First prove yourself that you are a profitable trader for at least three months, then increase your capital gradually. Deal with Failures ---------------------- As I said nothing works all the time. There will be losing days and losing streaks. It is very difficult to deal with losses when you are new to trading. But to begin with, minimal losses are easier to deal with. Imagine you started trading with 1lac and lost 10K on the very first day. I am sure that soon you will lose it all and then become an investor. Following risk management and developing strategy that suits you are not overnight processes. You have to develop discipline to follow them. Try to stay in the market for longer time and it will teach you how to deal with failures. Before you leave don't forget to like and comment for more such writeups in the coming days. Regards
NSE:NIFTYEducation
by Bravetotrade
14
Type: 2 Fear - Fear of Losing (Most Common)Type :2 Fear of losing If you’re going to be a trader, you’re going to lose money at some point, and in case you are still in the phase of trying to avoid all losing trades and searching for a “Holy-grail” trading system with a 75% strike rate, you should forget about all that right now. As cliche as it may sound, losing really is part of winning as a trader; the two are inseparable. If you don’t learn how to lose properly you will never make consistent money as a trader. Reality check… ------------------------- ALL pro traders lose money, and they understand that it’s just part of the “game”. Sadly, for many traders, every trade is accompanied by a tremendous FEAR of losing money and sometimes intense emotional attachment. Some of the key reasons why traders become fearful about losing their money include the following: 1. They don’t understand that mathematically, over a series of trades, a trader can lose a majority of their trades and still be widely profitable, simple math proves this. 2. They are simply fearful of losing money in general. 3. They are trading positions that are too big (risking more than they really should be), causing fear, sleepless nights and huge emotional swings. This is some pretty powerful stuff so make sure you actually read the whole article and re-read it if you have to. What you learn here should give you the power to eliminate your fear of losing money in the markets and will help you develop into a confident and emotionally collected trader. Fear of losing money can be a good, natural emotion, but we need to transform its focus. Fear of losing money is a good emotion to have in many areas of life, if we did not have it there would be evens more chaos in the world and in the markets. Humans are protective of their acquired wealth and property, and rightly so; they worked hard for it. However, in trading, this natural energy to be defensive and emotional with money needs to be transformed and refocused into a different mental state… Instead of being fearful of losing your money when trading, embrace the control you have on each trade; a trader has complete control over the risk management of every trade via stop losses and position sizing, . These risk management tools are your way of being in control of your money/funds, and instead of being “fearful” about losing money, you should feel empowered and confident because you can predetermine how much you are comfortable with potentially losing BEFORE you enter a trade by using these tools. However, just using these tools to control your risk per trade is not quite enough to totally remove the fear of losing. ------------------------- Ask yourself some serious questions If you feel fear or any emotion at all when you place a trade, you need to “slap” yourself in the face and ask yourself 3 big questions (and answer honestly): 1. Do I really have the knowledge and confidence to be trading with real money in the first place? If you’re trading your hard-earned money in the markets but you don’t know what your trading edge is and you don’t have 100% confidence in your ability to analyse and trade the markets…you probably should not be trading. One of the biggest reasons traders become afraid to lose their money is because they aren’t confident in their own ability to trade! It seems silly I know, but it’s very true; many traders simply don’t have a trading strategy mastered, they don’t have a trading plan, trading journal, etc…they simply aren’t prepared to risk real money in the markets yet…thus they feel fear when they trade. 2. Am I trading a position size that’s too large for my personal risk profile / per-trade risk tolerance? If you don’t know what your per-trade risk tolerance is, then you need to figure that out first. It’s basically just the dollar amount that you feel like you are 100% comfortable with potentially losing on any trade; because you CAN lose on any trade…remember that. You have to take into account your overall financial situation and then determine how much money you should realistically and honestly have at risk in the market on any one trade…be honest with yourself here. You’ve got to think of yourself as a risk manager and as someone who is managing funds, rather than just a small-time guy trying to get lucky; your trading mindset will directly influence your trading results. 3. Do I truly understand the maths behind trading? ------------------------- When I say the “maths behind trading” I am mainly referring to risk reward and how it relates to your overall winning percentage. For example, on a series of 20 trades, you are likely to lose at least 35 to 45% of the trades, and most traders who are successful lose anywhere from 40 to 50% of the time, some even up to 60% of the time. But, through the power of risk reward you can lose more than you win and still come out very profitable. We will expand on this below. Embrace the belief that losing is OK Losing is good if you’re cutting your losses quickly and understand that by doing so you’re simply preserving capital and that your winning trades will pay for your losing trades with profit left over. This is the power of your average risk reward ratio over a series of trades coming into play; we will see this in action below… Even very profitable traders typically lose more than they win, to prove this point let’s take a look at a case study showing 14 trades with a just a 43% win rate. To be clear, that means you are losing 57% of the time and winning just 43% of the time. It can be hard to associate “losing” the majority of your trades with making money, but as I discussed in one of my recent articles, you don’t have to be right to make money trading. You can make money with poor accuracy and decent reward to risk ratio.
NSE:NIFTYEducation
by TRADEWITHFUN247
5
How do Breakout traders get trapped?In the example above, note the following: - Warning candles: Doji + Hammers + bearish candles indicating exhaustion and a lack of follow-up. - A relatively higher volume on hammer & doji, which is never a good sign for a breakout because it indicates significant selling pressure. - A bullish breakout must always be accompanied by a good follow-up, else it won't sustain. Bullish BO needs good bullish candles, NOT dojis. Notice how a small wick (on the daily chart) looks like a clear liquidity hunt on lower time frames. Underlying concepts: 1. The market was moving sideways and generating liquidity on both sides. 2. In general, when the market is ranging, different participants place orders with a different bias. Hence, there is liquidity on both sides. 3. For a bullish market, the price must form a series of higher highs and higher lows. Similarly, for a bearish market, the price must form a series of lower highs and lower lows. 4. Whenever the price reaches a resistance level, there are 2 types of traders that take positions: - Those who short the level in anticipation of it acting as a resistance. - Those who long early in anticipation of resistance being taken out. 5. The stop losses of these traders act as liquidity. A short position has a “buy order” as SL, whereas a long position has a “sell order” as SL. 6. In general, almost everyone is aware of how the retail participants place their stop losses. They are either: - Above/below an important swing level such as a support, resistance, day high, day low, etc. - Above/below a demand, supply candle. - Above/below the candlestick pattern such as a shooting star, hammer, and doji. - Above/below the charting pattern. 7. The market moves from one zone of liquidity to another. 8. As a retailer, you may not realize the importance of a small wick. The small wicks are more than enough to liquidate plenty of positions. Psychology and Behind the scenes stuff: 1. When the price reached the resistance level, 2 types of traders started opening positions. - Aggressive shorters who shorted in anticipation that the level will hold. - Aggressive longers (those who don't wait for confirmation) who were waiting for the candle to close above the resistance. 2. Both of these traders opened their positions and placed their stop losses in the system. 3. The banks/institutions have fairly complex algorithms that can easily identify these positions. 4. The stops of these aggressive participants are taken out fairly easily and the market moves from one zone of liquidity to another. Thanks for reading! Hope this was helpful. If you need a PDF of this post with all the charts and write-up, check out the signature section (under the post). 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:POLYCABEducation
by johntradingwick
56
What is Bearish divergence?Hey everyone! 👋 Last week, we explained some of the basics to know when it comes to understanding bullish divergences in the markets. If you haven’t read that post, be sure to check it out here: In this post, we are going to examine just the opposite: bearish divergences! Please remember this is an educational post to help everyone better understand investing and trading principles. In no way are we trying to promote a particular style of trading. Table of contents: 1. What is bearish divergence? 2. Types of bearish divergence 3. Some examples When the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, it is called divergence. Divergence warns about potential underlying weakness in the current trend. What is Bearish divergence? A bearish divergence occurs when the price rises to a new high while the oscillator fails to reach a new high (exception being hidden bearish divergence). It indicates that the buying pressure is decreasing and the bears may soon take over the market. Generally, a bearish divergence occurs at the end of an uptrend. It has two sub-types: - Classic bearish divergence - Hidden bearish divergence What is classic bearish divergence? The classic bearish divergence occurs at the end of a bullish trend and indicates that a trend reversal may occur soon. In this, the price and the oscillator always either form a higher high or an equal high. It can be subdivided into 3 types, based on the strength. 1. Strong Bearish Divergence In strong bearish divergence, the price forms higher highs but the oscillator forms lower highs. This means that the buyers are not buying at the same momentum i.e. the buying pressure is decreasing. Price : Higher highs Oscillator : Lower highs Exhibit: Strong bearish divergence Exhibit: Strong bearish divergence followed by a reversal 2. Medium Bearish Divergence The price makes double top (almost the same level as the previous high) and the oscillator makes lower highs. This indicates that at the same price levels, the momentum is decreasing. Price : Equal highs Oscillator : Lower highs Exhibit: Medium bearish divergence Exhibit: Medium bearish divergence followed by a reversal 3. Weak Bearish Divergence In weak bearish divergence, the price makes higher highs but the oscillator has almost the same highs. This means that even though the price is increasing, the momentum is intact. Price : Higher highs Oscillator : Equal highs Exhibit: Weak bearish divergence Exhibit: Weak bearish divergence followed by a reversal What is hidden bearish divergence The hidden divergence occurs during the correction phase of a trend and is a possible sign of a trend continuation. In this, the price forms lower highs, but the oscillator forms higher highs. This indicates that even at an increased momentum, there is enough selling going on to push the price down. This type of divergence occurs with less frequency as compared to the other types. Price : Lower highs Oscillator : Higher highs Exhibit: Hidden bearish divergence Exhibit: Hidden bearish divergence followed by a reversal 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 and Instagram for more awesome content! 💘
AEducation
by TradingView
7
Bajaj Finserv: Elliott Wave Analysis & TipsBajaj Finserv has started it's final bearish, where we have seen a speculative boom downside. After breaking 50 & 200 EMAs , it started falling for wave Z . Traders can expect the following targets: 14631 - 14449 - 14176 . The Control line will work as a hurdle for intraday traders. Bajaj Finserv has formed in the descending channel for more than 27 weeks . It has broken the control line's channel also. That indicates bulls are not ready to expect a falling knife. Measurement of wave ((4)): Wave ((4)) can accomplish 38.2% of wave ((3)) at 14000 . Wave ((4)) can complete at the lower band of the parallel channel because the price has created a throw-out action. Sometimes, prices do not break the low of wave ((Y)) due to less momentum and supply deficiency. And it causes orthodox bottoms. After the completion of wave (z) of wave (4), the price will march for motive wave (5).If the price sustains above wave (X) at 17480 , Bajaj Finserv will move on for an all-time high. Note: ending point of the corrective structure is the starting point of an impulsive phase. I will update further information soon.
NSE:BAJAJFINSV
by forextidings
16
GPTINFRA - Cup & Handle pattern formNSE:GPTINFRA BSE:GPTINFRA Time Frame – Weekly Technical Observations – 1) Cup & Handle pattern form 2) Breakout above 105-115 zone 3) High volume seen Resistance – 147.90 / 187.35 / 220.80 / 248 Support – 67.50 & Weekly 200 SMA DISCLAIMER : NCFM Certified Technical Analyst. I am not SEBI registered analyst. All posts are for educational purpose only. I am not responsible for your any loss or profit. Consult your adviser before taking any trade. I help people to learn technical analysis & charts reading.
NSE:GPTINFRALong
by Chart_World
1