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Fakeout

GLAXO | FAKEOUT OF DESCENDING TRIANGLE?The descending triangle is a pattern that leads to big explosive moves once price breaks out either side of the triangle. Here in Glaxo, the price does seem have to broken to the downside, but the candles formed in the yellow box above, do seem to suggest a fake breakdown. The formation of a Bullish Harami cross, with heavy volumes suggest more buying down there. (A Bullish Harami formation is when there is an inside bar formed next to a bearish mother candle, and the next candle crosses the high of the Mother candle) A stochastic crossover in the Oversold zone also suggests buying coming in instead of selloff POINTS TO NOTE BEFORE INITIATING LONG: 1. A breakdown of a descending triangle, yet the follow-up selloff is missing. 2. Formation of a Bullish Harami Cross suggesting buying 3. A stochastic crossover in the Oversold zone. 4. Last but not the least, if it does turn out to be a fakeout, the RR is close to 5.5. (Considering the target after a successful breakout to the upside as the pattern height) Considering the above points, a long can be initiated as follows: Entry 1450 SL 1370 Targets 1870 RR 1:5.5 As always trade according to your risk appetite. And always enter your SL first.
NSE:GLAXOLong
by Divergent_trader
3
An attempt to time the marketThere clearly is fear in the market. In most cases, this is an excellent opportunity to start taking risks aggressively but one needs to have some sort of confirmation in order to make the most of fear. Keep trading like you generally do. Drawdowns are natural just make sure the risk is low enough. It's drawdowns like these that give excellent trade setups. So, make sure you jump on those to recover money asap. If the market doesn't hold, reduce risk, if it does, increase risk. However, don't bet more than 1% per trade.
NSE:NIFTY
by vorayash05
Secret breakout pattern.Please do not trade based on my opinions they are not set in stone. I just have high RR but poor accuracy and I am completely open about it. This is just me keeping log of the trade I took and not a trade recommendation. The previous swing high only gives me 1:5 RR which is not my ideal RR as I gun for 1:10. Let's see what happens when it hits target, I might trail SL to BE and let it ride till it goes 1:10. Trade logic: Market often probes for liquidity clusters and then gives a sharp momentum bursts that lasts for 3-5 days. You don't always have to buy a breakout after the break of upper range, sometimes failing to break the lower is just as good an entry point. The tradeoffs here are low accuracy in return of high risk-reward ratio + small holding period. Please do not trade on the back of this just learn how to mark the levels, how an ideal entry point can be found and increase the RR of your trading system. Happy Trading!😉 Break of support and bounce backs are the best and I strongly recommend you learn from them. Follow me if you want learn how to trade with a different outlook. I have back tested indicators, trading systems that only rely on logic rather than traditional technical analysis.
NSE:GUJGASLTDLong
by vorayash05
2
Secrets of Successful TradingI was banned because of an accidental mistake I made in my previous post which should explain my absence. After thinking a lot about my trading so far, I realized that accuracy is not something I am after but rather big home runs like these. Most traders anyway are between 40-60% so it seems like there seems to be an imaginary cap on the accuracy anyway so I decided to increase the RR of my trading system and it is paying tremendous dividends. The upside is that this system works fantastically during bear/rangebound market periods as you are buying the lows. The downside of this system is that accuracy can be on the lower end (20-25%) but you can still come out profitable. As a trader starting out, it can also help you develop patience because the winners are worth the wait. In order to stay in the game trading this system, a risk of 0.25% per trade keeps you calm during bad trades. A single winner can wipe out as many as 9 LOSERS. Questions are welcome in the comments and follow me to learn highly asymmetrical RR trading! Cheers.
NSE:PAYTM
by vorayash05
Why BEAR-TRAP occurs? How to Avoid and Trade a BEAR-TRAP?What is a BEAR-TRAP? --> BEAR-TRAP is a condition in the market where the Price gives a Breakdown below a Potential Support zone but quickly Reverses back above the Support without giving a follow up bearish candle. Why a BEAR-TRAP occurs? --> Big Players who are bullish on a specific stock would be wanting to buy a big quantity of shares at the best price , but there will be no enough sellers . Hence All Buy Orders of Big Players would not get filled. so what's the solution? --> Big Players know that the Retailers have maximum of their StopLoss order's just below the Support. --> Big Players will place Contra-Short Trades and will trigger the Stop-Loss Orders of the Retailers turning them into a Seller .Hence All Buy Orders of Big Players will get filled. . --> New Breakdown Traders place Fresh Short-Sell Orders looking at the Breakdown and if its a F&O stock , Call-Sellers open new positions at ATM (At the money) Strikes. . --> Now as All Buy Orders of Big Players got filled. . BIg players aggressively start moving the price up and trigger the Stop-Loss Orders of the New Breakdown Traders and Call-Sellers who entered looking at the Breakdown which ,again shoots up the price. -->Hence All Bears are been Trapped. How to avoid a BEAR-TRAP ? --> Look at the Volumes on the Breakdown ! If the Volumes are Low , It is probably a Fake Breakdown! . --> Wait for a follow up Bearish- Candle after the Breakdown Candle! i.e Take a entry only when the Low of the Breakdown-Candle breaks. --> Check out if there is a significant Long-Unwinding if its a F&O stock. How to trade a BEAR-TRAP ? -->Check out for a Reversal Pattern soon after the Breakdown. Eg: Bullish Engulfing, Bullish Harami, Bullish Piercing .etc --> This Reversal Candle Stick must close above the support. -->Enter a Long Position above the high of this reversal candle . Real Example! --> NSE:POWERGRID was trading within a Rising Channel . --> POWERGRID gave a Rising Channel Breakdown below 196 and gave a daily closing at 191. Perfect breakdown right? -->Breakdown Traders entered here keeping their Stoploss above the POC or just above Psycological level 200. and Call Sellers would have Shorted the POWERGRID 200 CE STRIKE . --> Check out the volumes on breakdown! Its very very low signifying its a Fake Breakdown. --> POWERGRID on the following day made a Bullish Above Stomach Candlestick pattern and gave a closing above the support level 196. -->Perfect Buy would be on 1HR Closing above the support level 196 on the next day. -->Boom! Price made an Impulsive Movement after it triggered all the StopLoss Orders placed at Psycological level 200 by the Breakdown Traders and also due to the Short Covering at 200 CE STRIKE . --> Wasn't it a perfect BEAR-TRAP Trade? If you liked this Educational Idea, Kindly LIKE,COMMENT, SHARE, & FOLLLOW me on Trading-View for more educational posts like this.
NSE:POWERGRIDEducation
by Roswin-Fernandes
2
BREAKOUT vs FAKEOUTTrading breakouts is a most profitable trading strategy that involves buying or selling an asset after a long period of consolidation. Confirming breakouts before jumping into a trade is the key task to become a successful breakout trader. Now lets see about the important key points to consider to confirm such valid breakouts TYPES There are different types of breakouts including 1)Trend line breakouts (diagonal form of S&R) , 2)Horizontal price breakouts, 3)Pattern breakouts (double top, double bottom & other) 4)All time highs/lows breakouts, 5)Fib level breakouts etc., The support and resistance lines that are drawn at potential breakout points "should be seen as area/zones instead of fixed lines" . BREAKOUT : A breakout is when the price of the stock breaches a support or resistance levels that has previously formed followed by a strong candle close. FAKEOUT : A false break or fakeout, as the name implies, is any move above a resistance or below a support followed by a reversal that fails to close above or below the broken level. WHEN THE FALSE BREAKOUT HAPPENS : A false breakout happens when there are no enough buyers or sellers to continue supporting the stock towards the breakout direction. In the examples above,the upper false breakouts happened because there were no enough buyers to continue pushing the price higher & tends to reverse similarly viceversa for the lower false breakout. VARIOUS SCENARIOS OF FALSE BREAKOUT POINTS TO REMEMBER 1)False breakouts can be avoided by waiting for strong candle closure above or below the levels to confirm the breakout strength. 2)Avoid the breakouts with non-stop parabolic movement (without pullback or retest). 3)Instead of using a single line as support or resistance, it is better to have an area/zone that covers all shadows in previous touches. 4)To take entry, always wait for the zone to breach by the candle closing confirmation combined with price action. Hope it was helpful to you, Happy Learning & Profit making :) Thanks & Regards Divyaapugal
NSE:NIFTYEducation
by Divyaapugal
29
Trading setup for beginnersOne thing that is a problem for novice traders is the lack of repeatable trading setups. Manually scanning through charts every day is counterproductive. One might take a trade just for the sake of it if they do not find anything worth trading. This pattern can be scanned very easily on charting platforms. Lack of patience is very real during early days as a trader. Having a fixed systematic pattern like this is an antidote to lack of patience and bad trades. Whenever the market penetrates the mentioned low and doesn't follow through, one can expect a short time spike in prices that can be capitalized. These patterns tend to resolve themselves within 3-5 days and occasionally make take some time. This pattern is called Turtle Soup/Turtle Soup Plus One. If the market closes above the mentioned low on the same day, it is called turtle soup and if it closes higher the next day, it is called turtle soup plus one. I learned this strategy from a legendary veteran trader, Linda Bradford Raschke, in her book Street Smarts. The trading pattern is explained thoroughly on the chart but if you have any questions, you can drop them in the comment section. P.S. I highlighted the most recent trade because that was the one that I took and the previous examples on the chart may look like a benefit of hindsight, but that is simply to see how the markets reacted and whether this trade would have worked out or not. Past market behavior is very important. *Welcome corrections on the chart if any*
NSE:TECHMEducation
by vorayash05
3