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How to Trade an ASCENDING TRIANGLE BREAKOUTSTRUCTURE --> ASCENDING TRIANGLE is a type of consolidation pattern formed after an Uptrend ( Markup Phase). --> ASCENDING TRIANGLE is a triangular pattern with a flat horizontal Resistance on the top and a Trendline that connects atleast two Higher Low swings from the bottom to the top of the Triangle. --> ASCENDING TRIANGLE is considered to be a Bullish Pattern because the Swing Lows are getting shifted Higher signifiying the Sellers loosing the strength . LOGICAL REASON BEHIND THE PATTERN --> As the ASCENDING TRIANGLE is having the flat horizontal Resistance on the top , There are stack of STOP-LOSS-ORDERS just above the horizontal Resistance. When some Strong Buyer punches a heavy buying order, The order Triggers all the STOP-LOSS-ORDERS which were placed above the horizontal Resistance turning the sellers as buyers. --> Seeing the Breakout various New Traders and Algo's place more buying orders and the price tend to move higher. Example --> Take the example of the crypto GMTUSDT . --> Initially the crypto was in the Mark-Up phase. --> Later this crypto entered into the Consolidation phase by making ASCENDING TRIANGLE as the consolidation pattern. --> $0.82 was the horizontal resistance established by this stock. --> The Lows started shifting up from $0.5 to $0.7 to $0.75 showing loss in seller strength . --> The Price started sustaining above the POC (Point of Control) showing buyers strength. --> When Price Breached $0.82 all SL orders were Trigerred and the crypto gave the breakout with volume . --> The price moved higher as new Traders and Algo's placed more buying orders . Target and Stoploss --> Target would be the Depth of the Ascending Triangle, Projected above the Resistance Breakout as mentioned in the Example Screenshot. --> Stoploss would be placed below the Breakout Candle LOW .
Education
by Roswin-Fernandes
28
A Comprehensive Guide to Rectangle Formation.Introduction: Price trends do not usually reverse on a dime. uptrend and downtrend are typically separated by a transitional period or trading range, and trading range formation signal trading opportunities for traders. The trading range separating rising and falling price trends discussed here is a pattern known as a rectangle. This post will cover these questions: 1. Types of a trend reversal. 2. Rectangle formation. 3. consolidation rectangles. 4. Significance of a rectangle pattern. 5. Retracement moves 6. What when a rectangle fails? 1.Trend reversal The turning point between the bull and bear phases is termed a reversal pattern. # Reversal patterns at market tops are known as distribution because the security is said to be “distributed” from strong, informed participants to weak, uninformed ones. # Price patterns, including rectangles, that develop at market bottoms are called accumulation formations where the security passes from weak, uninformed participants to strong, informed ones. a.Horizontal or transitional reversal. An oil tanker takes a long time to slow down and then go into reverse. The same is normally true of financial markets. Generally speaking, the longer the trend, the more time spent in the reversal (turnaround) process. This transitional or horizontal phase has great significance because it is the demarcation between a rising and a falling trend. b. Reversal on a dime without warning. This type of reversal is the exception to transitional reversal and they are the highly emotional market that changes without warning. 2. Rectangle formation. The figure shows the price action at the end of a long rising trend. price starts to move in a trading range between Point A and Point B. Point A can be identified as a resistance area after the price backed of two times from Point A. Point B can be identified as a support area after the price moved up two times from Point B. one can draw horizontal trendlines or Box on the chart to mark the level. At this point, the demand/supply relationship comes into balance in favour of the sellers whenever the price reaches A, and the demand/supply relationship comes into balance in favour of the buyers when the price reaches B. Finally, prices fall below point B signals a trend reversal and the sellers are dominating the market. 3. consolidation rectangles. If the rectangle following an uptrend is completed with a victory for the buyers as the price pushes through the upper line A , a reversal does not develop because the breakout above A reaffirms the underlying trend. In this case, the corrective phase (trading range) associated with the formation of the rectangle temporarily interrupts the bull market and becomes a consolidation pattern. In the figure, a breakout to the upside makes this pattern a continuation rectangle. #the prevailing trend is in existence until it is proved to have been reversed. 4. Significance of a rectangle pattern. i. Time Frames The longer the time frame, the more significant the pattern. A pattern that shows up on a monthly chart is likely to be far more significant than one on an intraday chart, and so forth. the longer a pattern takes to develop in a particular time frame, the greater its significance within that time frame. # Most of the time the larger pattern will be more important, but not every time. In technical analysis, we are dealing in probabilities, never certainties. ii.Volume Considerations. volume is an important independent variable that can help us obtain a more accurate reflection of crowd psychology. volume shrinks during the formation of pattern and blastoff on successful breakout/breakdown of the price. iii. Measuring implications: The depth of the pattern is projected in the direction of the breakout from the breakout point 5. Retracement moves. Many times when the price breaks out from the rectangle, the initial move is followed by a corrective move back to the breakout point. This is known as a retracement move, and it offers an additional entry point for left out players who pushes the prices again in the breakout direction. 6. What when a rectangle fails? One of the first things that should be done upon entering any business venture is to weigh the possible risk against the potential reward. the same is true in the financial markets. *Amatures on breakout only focuses on potential profits. *Professionals always consider the risk as an equal. this means when opening a new position you have to consider the risk to reward ratio and decide prior to opening the position what type of price action would cause you to conclude that the breakout was a whipsaw. Some price action to consider to identify a whipsaw (fake breakout). a.50% rule. It very much depends on the chart. If there are no obvious support points, many traders believe that a penetration of the 50 percent mark is the place to exit. In this case, the 50 percent mark is the central point between the two horizontal lines that make up the rectangle. b. Trendline support using price action trendline to identify if the trend is valid or has been breached. c. Stop below/above the opposite line of breakout/breakdown. one can set a stop above the resistance line if the short-sell position is triggered. or set a stop below the support line if the long position is triggered. d. False breakouts: Shrinking volume on an upside/downside breakout. Hope you found this helpful and I sincerely hope you find a ton of good rectangle formations to trade-in! Happy Trading!
NSE:TITANEducation
by SANJAYPATIDAR_
30
A layman’s guide to Support and ResistanceForeword: 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. These levels exist due to the influx of buyers and sellers at key junctures. Support and resistance levels can be drawn using a variety of technical indicators such as Moving averages, horizontal levels, trendlines, etc. (which are freely available on TradingView) This post will shed some light on these questions: 1. What is a support level? 2. What is a resistance level? 3. What is their importance? 4. When & where to place Buy/Sell orders? Please remember this is an educational post to help all of our members better understand various concepts used in trading or investing. Support: Support is a zone where the price tends to find a cushion as it falls. In general, the price is more likely to “rebound” from this level rather than pierce through it. However, once the price breaks down from this level, it is likely to continue falling until meeting another support. Illustration: Exhibit 1: Exhibit 2: Resistance: It is a zone where the price tends to find resistance as it rises. In general, the price is more likely to “bounce back down” from this level. However, once the price pushes above this level it is likely to continue rising until it meets another resistance. Illustration: Exhibit 1: Exhibit 2: Role reversal/Change of polarity: A resistance level after a successful breakout turns into support and a support level after a breakdown turns into resistance. This is known as "Change of Polarity" and the zone is called a "Flip zone". Illustration: Exhibit: Sample trade setups: 1. Buying the support If after being rejected several times by the resistance, the price finally manages to break out. The right course of action can be to wait for a successful retest of this level, before going long. This is done in order to avoid fake breakouts/bull traps. 2. Selling the resistance If after being rejected several times by the support, the price finally manages to break down. The right course of action can be to wait for a successful retest of this level, before going short. This is done in order to avoid bear traps. Conclusion: A zone keeps on flipping roles between S/R. It serves as a support at times and a resistance at others. As a result, these zones should be regarded as possible support or resistance zones, as there is no guarantee that they will operate as desired zones. Pro Tip: Since there is an influx of buyers and sellers at the S/R level, hence there is a lot of liquidity around these points. Hence, it is not wise to place orders close to these levels. Always keep a buffer.
MCX:CRUDEOIL1!Education
by TradingView
19
RELIANCE INDReliance has given breakout of resistance trendline on daily chart along with very good intensity of volume, also it has been closed above 20WMA (Weekly Mid Bollinger Band) in addition to this macd in weekly is about to turn positive and daily has done positive crossover few days back, which is now uptick above zero line. Possibly wave 3 of 3 can now unfold. On the way up, it can rise higher towards the upper end of the rising channel which is currently pegged at 2918 coincides wave 1 and 3 both will be equal at nearly at same level. On the way down, RK's stop line and 20WMA , currently pegged at 2416 and 2340, will provide support in forthcoming weeks. RK's Magic positive signals to go long breakout on daily time frame with good volumes weekly chart some findings are mentioned in snapshot macd in weekly uptick above zero line macd in daily positive rsi in daily chart uptick and now at 60. 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.
NSE:RELIANCELong
by RK_Chaarts
26
NIFTY:TIME CYCLE INVERSIONConcept of Time Cycle: #A cycle is something that influences the price movement of a financial market to move up towards a peak, and then to move down towards a trough (or low point). #It repeats that action on a fairly regular basis or exist in continuous time. #There are multiple cycles which influence the price movement of any financial market.The multiple cycles that influence price movements combine in a very particular way. #This multiple cycle low's are synchronized as low are made on the back of "fear/panic" and psychologically human tends to experience fear in mass hence different cycle lows are concentrated where as high's of different cycles are scattered as high's are driven by "GREED" which is rather more subjective. #J.M.HURST inventor of cycle theory has given a nominal model which states comman cycle's that are found in financial markets. #Due to multiple cycle going on at the same time,we can see variation in it's wave length(Cycle period). Observation over here: Since January 2021 we are seeing Nifty following 20-days time cycle there by making important pivot low's near vertical line showing cycle period day on most of the occasions till January 2022. Since January 2022 we are seeing inversion happening in the time cycle meaning instead of catching or making important pivot low near cycle period day we are seeing market making important pivot high post which we have seen significant market fall on last 2 occasion of cycle period day. Next cycle period day is on 17/03/2022.Hence going by this logic we can expect current up move to continue till 17/03/2022 post which we can see fall. Although this time in the current up move we have seen price breaking upper channel rasistance and has also managed to close above it and also above its previous pivot closing high of 16793(16800) in today's trading session,which in itself is bullish sign suggesting next target of 17050-80 on the upside,however from here risk reward is not favorable for taking long trade. Although channel rasistance is broken,from last 2 cycle we are seeing Nifty making pivot high's post which we have seen nifty falling and continuing on this logic post 17/03/2022 we can see fall in Nifty till at least previous pivot low of 15670 in order to confirm double bottom. Trade Setup 1)Need reversal candle near cycle period,price being at gap(17050-80) or previous price action zone(17340-400). 2)Next day market should trade below reversal candle low for atleast first hour in order to initiate trade. Stop-loss should be reversal candle high for short trade and target would be 15670. Disclaimer:This are just my views on the index,no position should be squared off or initiated on its basis.Posting this for my future reference.
NSE:NIFTYEducation
by UNDERDOG-29
34
Bank Nifty:Plan of Action & What FOLLOWED( +18.52% OR +7298 pts)We witnessed an awesome planned fall in Bank Nifty, hope you all enjoyed and made money with the idea. Lets look at the Plan of Bank Nifty & Nifty My Favourite Bank Nifty first & Nifty Lets dig deep into the structure & my thought process behind it First thing First "KEEP IT SIMPLE BABY'' Model 1 (ABC(Elliott ABC)/Pole & Flag/ABCD Harmonic Pattern) what ever you call it, its the simplest of the pattern to recognise & trade Elliott Wave (ZigZag) - ZigZag is a 3 waves ''Corrective'' structure in bigger 5 wave "Impulse" - Subdivision is 5-3-5 - Wave B can be any corrective structure ie zigzag-flat-triangle Fibonacci Relationship between waves are - Wave C = 61.8%, 100%, 127.2% or max 161.8%(need to be careful while labeling wave C as wave 3 is 161.8% of wave 1) - Wave B = 50%, 61.8%, 78.6% or 86% Pole & Flag - Basically Flag is a pattern which forms after market has moved some distance - Flag is a consolidation pattern used to participate in the previous move, that can be up or down - Basic & Logic of the flag is as simple as, any consolidation which is in-between parallel channel - Trade can be initiated on break of parallel channel - Fibonacci relation for the flag can be specified in 2 reversal points(Profit Taking Zone) 1) 61.8% projection of first leg, which should end in the range of 'CENTER LINE REVERSAL'' of parallel channel 2) 100% projection of first leg, in this case, price reverse from bottom of the parallel channel Harmonic Pattern( Bullish ABCD) In Harmonic Pattern (Bullish ABCD) it is labelled as ABCD, instead of ABC of Elliott wave and all the harmonic patterns are derived form understanding ABCD structure, Fibonacci Relationship of all legs BC= 61.8%-78.6% of AB CD=127.2%-161.8% of BC CD=AB CD=127.2%-161.8% of AB Now lets come back to Bank Nifty Plan As per the above study, we can easily identify Impulse and Corrections Points were considered while planning - the rally following 20 Dec 21:1300 hrs was not Impulsive in nature - Price was struggling to rise above 61.8%-78.6% fib retracement resistance level & hovering in the range - 12 Jan-02 Feb-10 Feb formed ''TRIPPLE TOP" with narrow range of 1.38% - for the said pattern we witnessed a breakdown on 24 Feb 22 on opening candle Now the some important points to consider from ''Elliott Wave Principles'' - Wave B structure As per Elliott Wave, Wave B can be a ZigZag, Flat or triangle(TO KEEP IT SIMPLE - not to go in complex corrections) Possibilities of Correction Case 1(Zigzag) Case 2(Flat) Case 3(Triangle) Now from the above two patterns we can eliminate which doesn't fits the pattern Case 1(flag) eliminated we are not left with case 2 & 3 or say Possibiltiy 2 & 3 As per possibility 2 (flat) we get As per possibility 3 (Triangle) we get Both of the labeling stated Bank Nifty & Nifty are heading lower We will wind up this, you can keep sharing & liking the effort of the author so that I can come up with more in future Wish You Happy & safe trading Views are for ‘’EDUCATIONAL PURPOSE ONLY’’ trade at your own risk. "Always Respect Risk" Happy Trading Jai Hind -
NSE:BANKNIFTYEducation
by DhirajSinghBais
18
High Probability Candlestick Pattern 1: Three Line StrikeAs you read from image description that's pretty much all there is to learn on this pattern. Thomas Bulkowski in his book "Encyclopaedia of Candlestick Charts" mentions that this pattern predicts higher prices with an 83% accuracy rate. Do you Remember Nirmala Sitaraman Candle? Yes that's three line strike which was formed after budget was announced on 1st Feb 2021 Adding Another Example here of Reliance Note: Candlestick patterns alone are not reliable sometime, so combine them with some indicators like RSI to spot positive divergence on same or lower time frame OR MACD crossover and histogram positive as shown in below example DISCLAIMER: There is no guarantee of profits or no exceptions from losses. The stock and its levels discussed are solely the personal views of my research. You are advised to rely on your judgement while investing/Trading decisions. Seek help of your financial advisor before investing/trading. Investment Warnings: We would like to draw your attention to the following important investment warnings. -Investment is subject to market risks. -The value of shares and investments and the income derived from them can go down as well as up. -Investors may not get back the amount they invested - losing one's shirt is a real risk. -Past performance is not a guide to future performance. -I may or may not trade this analysis --------------------------(((((LIKE)))))-------------------------------
NSE:NIFTYEducation
by Niftydirection
18
My reasons and Your reasons behind losses while trading.Why do people take losses in trading? The reasons or mistakes behind a trader make losses. I suggest you these reasons should not be repeated. If you might have also come to cross from this reason and got losses, you can type in comment number of specific reason what you have faced. In case, you also have another reason except in this post, please or kindly specify it in comment section . We will discuss it for a solution. 1). Stop following the right/perfect "trade-setup strategy" even if you are earning from it. For instance, you're going good in "breakout setup" but not following consistently, change suddenly/started to follow another pattern the setup. 2). Not enough Technical Knowledge. New traders just learn from YouTube or another resource about basic charting reading & indicators, such as MACD, chart pattern, trendline, etc. directly jump in practical trading with using full margin and later convert to loss. They believe trading is very easy but it's theoretically. In the practical, you need experience & practice a lot to earn. 3). Believing blindly on Other's Tips. A lot of traders pay high prices for tips/research/analysis and follow them blindly without applying margin management rules. As a result, they wipe out. I am not saying to ignore/avoid other research or analysis but you should apply margin management rules and also do paper trading on their research. 4). Try to cover loss, Expecting huge profit. When traders take a loss, they think to recover the loss by taking entry huge quantities to recover from little pips/points and fall into a huge loss. After taking a position with the perfect trade-setup, some traders expect more profit than the per-defined target. Later, they convert into loss because of changing setup. 5). You take risks that you can't afford to lose. Taking Unlimited Risk means, neither protective stop nor mental stop. Some people keep a 1:1 stop-loss and target ratio. Don't do this: "Holding losers trades while selling winners trades". 6). Lack of Emotion Control. Not following your own per-defined setup, for example, changing stop-loss or not exiting and expecting to recover, sometimes not booking profit and expecting more profit and finally convert into a loss. In more clear words, change your set-up frequently while real-time trading. Don't believe in Exit or Marry with Beliefs/Hopes(Hope is not a strategy). Believe in recover loss without any specific reasons and finally had to take a huge loss. I have seen in many new traders, they let Loose Grow and take a small profit. Avoid the words ‘hope”, “wish” or ‘feel’ when talking about a trade-setup. Believing that price cannot move higher/lower.
NSE:BAJAJFINSVEducation
by Trade-Technique
121
A simple trading strategy with ways to improve the winning edgeThere are lot of trading strategies which can be easily available. Whatever strategy you use, If you know how to increase the trading edge, and when to avoid the trade will help you to make money. I have taken a simple trading strategy known to most traders, but here I am going to explain how to take the trade which has more winning possibility. Strategy : Previous day high break out. Go long above 1st 15 mins candle high. Time frame : 15 mins Entry condition : 1st candle should close above the previous day high. Target : 1 : 2 or close at 3 or 3.15 pm if stop is not hit. Trail : Shift stop to entry once you get 1 : 1 profit Stop : Low of the 1st candle. Entry : Above the high of 1st candle. In this chart I have marked the previous day high. Now we will see about how to increase the trading edge or winning edge. On feb 25, the 1st candle volume was normal which indicates participants were not that much enthusiastic about the movement. Volume was not supporting and we did not get big movement as throughout the day volume did not pick up. 1st candle volume gave an indication that the trade was not having high edge. On Feb 28th, the 1st candle had good volume, but the candle was having selling pressure. So we take the trade after seeing the next candles formation. Here the candles were showing buyers interest in the stock. This trade was having good trading edge. On March 1st, 1st candle broke the previous day high & closed above it. Volume was good, but the high low difference was big. Position sizing will help but it most of the time we won’t get 1:2 rewards. This trade was not having high edge. On March 3rd volume was good, but it was a bear candle and closed below previous day high. So no trade. In this example, price broke the previous day high for 4 days. As per our strategy we got 3 trade set ups, but only one trade has high trading edge. This is how you can improve you winning rate in a trade. In this UPL chart, 1st candle broke previous day high, had good volume, but high/low difference was big and it did not give 1:2 profit. In this Bsoft chart, price close above the previous day high but the candle is having selling pressure and no trade in it. Whenever you decide to trade on a strategy, back test at least 100 trades to check the winning chances. Always place stop once you enter a trade. Market is having fast direction change nowadays and you should be prepared to handle it.
NSE:TATASTEELEducation
by vanathi
81