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Harmonic Patterns

Shooting Star - Complete GuideWhat is the Shooting Star candlestick pattern? A shooting star candlestick pattern is a chart formation that occurs when an asset’s market price is pushed up quite significantly, but then rejected and closed near the open price. This creates a long upper wick, a small lower wick and a small body. The upper wick must take up at least half of the length of the candlestick for it to be considered a shooting star. And, it must appear at the top of an uptrend. As a result, the shooting star candlestick pattern is often thought to be a possible signal of bearish reversal. This means an uptrend might not continue (prices may fall). Traders should be careful not to confuse the shooting star pattern with an inverted hammer candlestick pattern. They both have a longer upper wick and small body. But the inverted hammer indicates bullish as opposed to bearish reversal. Also, the inverted hammer is often seen at the bottom of a downtrend. How to recognize it: i) Little to no lower shadow ii) The price closes at the bottom ¼ of the range iii) The upper shadow is about 2 or 3 times the length of the body What does Shooting Star tells you ? i) Shooting stars signals a potential downside reversal ii)A shooting star opens and rises strongly during the trading session, showing the same buying pressure that is seen over the last trading sessions. At the end of the trading session, the sellers push the price down near the open. or At the buying climax, huge selling pressure stepped in and pushed price lower. The selling pressure is so strong that it closed below the opening price. In short, a Shooting Star is a bearish reversal candlestick pattern that shows rejection of higher price. Before trading with the shooting star, one should remember the following points: Trade Entry: Before you enter a shooting star trade, you should confirm that the prior trend is an active bullish trend. Entry is below the Shooting Star candle low. Stop Loss: Place Stop Loss just above the high of Shooting Star candle or above recent high. Taking Profits: Minimum target is the size of the Shooting Star candle. I generally prefer 1:2 as first target. Best way to ride the move is to sit till any bullish signal is sensed. You can target previous swing lows or support zone. Examples- TATAMOTORS NIFTY NAUKRI High Probability Scenario:- i)Focus on the major Resistance levels, that’s where traders get trapped When you trade The Shooting Star candlestick pattern, you want to focus on trading the major Resistance levels (the ones which can be seen on the higher timeframe).When a level is obvious and the price breaks out of it, many traders will hop on the bandwagon and buy the breakout (hoping to catch a piece of the move).However, if the price makes a false breakout, this group of traders is trapped, and their stops will trigger strong selling pressure. Now, this is to your advantage because The Shooting Star candlestick pattern allows you to trade the false breakout and profit from “trapped” traders. So the more obvious the level, the more traders will get trapped — and you make more money. Conclusion So here’s what you’ve learned today: The Shooting Star candlestick is a bearish reversal pattern that shows rejection of higher prices. Just because you a spot a Shooting Star candlestick pattern doesn’t mean you go short immediately because you must also consider the context of the markets. Confirmation to go short is always below shooting star candle's low. Set your stop loss slightly above shooting star candle or above previous highs.
Editors' picks
NSE:NIFTYEducation
by Omahto
8
Spinning Point(Krasnov Model)Namaskar! My name is Michael, today I want to share with you price analysis method which was indentified and first described by high level trader from Russia D.B. Krasnov. This method is used to predict price target zone. If you spend enough time training to indentify Spinning point on chart, you will be able to find quite a lot of them and it will help you to improve your trading level. The best way to confirm Spinning point(when you think you found it), is to explore this place on lower timeframe(M1-3-5). While exploring you should "like" how Spinning point looks. Understanding the logic of formation of Krasnov Model will help you to plan your trading. The idea is quite simple: You need to find, while the wave is rising/falling, somekind of a tested point, which price passes through and then comes back and backtests it and continue to rise/fall, this point presumably should be the middle of the wave(it can be local wave or global one). Bar which is tested from both sides shouldn't be consumed/forced, otherwise Spinning point counts as broken. Usually Spinning point has the lowest horizontal volume(not the volume indicator) in the wave. When Krasnov Model has reached its target, and the price comes back to test it, sometimes we can see resumption of buys/sells. Here are some examples of Spinning point on BTC chart I want to share with you, to make it easier for you to understand what are we looking for. Wish you good trades!
BITSTAMP:BTCUSDEducation
by mikhail_marka
Descending Triangle - Full ExpanationWhat is descending triangle ?? The descending triangle is one of the top continuation patterns that appears mid-trend. Traders anticipate the market to continue in the direction of the larger trend and develop trading setups accordingly. The descending triangle is a bearish pattern that is characterized by a descending upper trendline and a flat lower trendline that acts as support. This pattern indicates that sellers are more aggressive than buyers as price continues to make lower highs. The pattern completes itself when price breaks out of the triangle in the direction of the overall trend. Element Of Descending Triangle The descending triangle is fairly easy to spot once traders know what to look for. The below method can be applied to all financial markets. 1.)Downtrend: The market must be in a downtrend before the descending triangle pattern appears. This is important and emphasises that traders should not simply trade the pattern whenever the descending triangle appears. 2.)Consolidation: The descending triangle then appears while the market enters the consolidation phase. 3.Flat Lows Or Flat Line Lower trendline: The lower trendline acts as support. Price often approaches this level and bounces off until the breakout eventually occurs. 4.)Decsending or Lower Highs: While the market is consolidating, a downward sloping trendline can be drawn by connecting the highs. This downward sloping trendline shows that sellers are slowly pulling the price down – which provides further support for a bearish trading bias. 5.)Breakdown & Trend Continuation: After price posts a strong break below the lower trendline, traders will look for confirmation of the pattern via continued downward momentum. Calculating Target The descending triangle, often referred to as the ‘falling triangle’, has an inherent measuring technique that can be applied to the pattern to gauge likely take profit targets. For the descending triangle, traders can measure the distance from the start of the pattern, at the highest point of the descending triangle to the flat support line. That same distance can be transposed later on, starting from the breakout point and ending at the potential take profit level. The illustration below shows the distance from A to B can be transferred lower down, from C to D, in order to project a possible take profit level. How to trade Descending triangle When trading the descending triangle, traders need to identify the downtrend and this can be seen in the BANKNIFTY 15 Min chart below. Thereafter, the descending triangle appears as the candlesticks start to consolidate. The measuring technique can be applied once the triangle forms, as traders anticipate the breakout. After viewing a strong break below support, traders can enter a short position, setting a stop at the recent swing high and take profit target in line with the measuring technique.
Editors' picks
NSE:BANKNIFTYEducation
by Omahto
19
RSI RANGE SHIFT StrategyFor Beginners who don't know the real meaning of RSI RSI---RELATIVE STRENGTH INDEX As the name says it shows the strength of a particular stock or index. More the RSI more the strength RSI above 40 indicates very little strength 50/60+ RSI stocks indicates very good strength....But RSI above 80 indicates that the stock is little overbought and may consolidate but doesn't mean it will fall... RSI below 40 stocks should never be bought...RSI below 40 is oversold but the stock might not bounce back as the strength is weak...So buying a stock with RSI above 50/60 is the best and SHORT selling below 30/40 is the best option... RSI RANGE SHIFT STRATEGY: It's a simple swing trading strategy When RSI is falling and bounces back from 40...it is a buy for the stock once RSI is heading towards 60 It is a SHORT SELL if RSI 40 support is broken This strategy has to be combined with PRICE ACTION to get a good RISK/REWARD ratio. FOLLOW me for more such content ahead...Till then, HAPPY TRADING :)
NSE:NIFTYEducation
by keshevdugar
6
GOLDEN CROSSOVER Golden Strategy INDICATORS USED: EMA 4 EMA 9 EMA 18 TIME FRAME FOR ENTRY/EXIT: 5 min WORKS VERY WELL ON BOTH NIFTY AND BANK NIFTY As you can see on the chart that when EMA 4 crosses EMA 9 and EMA 18 together then the crossover of EMA 4 is golden crossover. This is the bookish definition...Now let's look at the applications with complete trading setup This strategy works well only on a trending day... STRATEGY: BUY once there is a golden crossover as shown in the post below: SELL once there is a golden crossover as shown in the post below: SOUNDS very simple and it is indeed but works well only if the day is trending...simple price action or anchored vwap strategy. Let's look into the STOPLOSS and TARGET: STOPLOSS: Place stoploss BELOW EMA 18 TRAILING STOPLOSS: EMA 4,EMA 9, EMA 18 acts as a good support...Place the trailing stoploss below any of them depending on your setup...(EMA 18 is preferred) TARGET: This strategy does not provide and fixed target...Keep trading until the trailing stoploss is hit. (Captures almost entire trend on a trending day...that's why it is best for trending days) EXAMPLES: SELL As you can see on the chart how beautifully EMA 4/9/18 are respected by the market on a trending day...and 250 points of move was captured in NIFTY 50. BUY Similarly 230+ points were captured and the market again respected these moving averages FALSE SIGNAL: This strategy is not a holy grail...it will give many false signals in a non trending day...so using this strategy along with price action will make it a lot more accurate. DO KEEP IN MIND THAT ANY STRATEGY WHEN FOLLOWED WITH PROPER RISK MANAGEMENT AND POSITION SIZING WILL ONLY GIVE PROFITS IN THE LONG RUN... If you have any doubts in this strategy do let me know in the comments...would love to answer them asap FOLLOW ME for more such content ahead...Till then, HAPPY TRADING :)
NSE:NIFTYEducation
by keshevdugar
29
Consolidation range EXAPLE you can se that price is stuck in the range on 4 hour time frame I prefer to take entry on the first pullback after breakout or breakdown But in this case I enter the trade with breakdown become I get 2 confirmation The RSI level is falling below 50 and a golden crossover of 50 and 200SMA SL - NEAR THE CROSSOVER TARGET - AS MUCH U CAN GO WITH HELP OF MOVING AVERAGE BUT IF U WANT TO PLAY SAFE THEN ENTER ON FIRST PULLBACK I AM A EXPERIENCE TRADER SO I ENTER ON THE BREAKDOWN BE PATIENT AND KEEP LEARNING FROM UR MISTAKE . ALWAY MANAGE UR RISK FROM MY EARLIER POST U CAN ALSO LEARN HOW TO AVOID FALSE BREAKOUT
BYBIT:BTCUSD.PEducation
by TRADELIKEPROFFSIONALS
Head and shoulder pattern EXPLAINED HEAD AND SHOULD PATTERN I am sure that you heard about the head and shoulder pattern this is the best example of head and shoulder Head and shoulder pattern is good for reversal of price but if u trade head and shoulder in isolation The. U must stop out . THE strong uptrend donot reverse just because of head and shoulder Remember - never ever go against the trend , trend is ur friend but in this example the price cross below 200 SMA So this is good reversal entry HOW TO USE HEAD AND SHOULDER PATTERN # see this pattern on higer time frame # see 200 SMA for confirmation ( long trade above 200 SMA short trade below 200 SMA ) # watch price action near neckline And I sure u know how to avoid fake breakout from my earlier post Remember- alway follow risk management , be patient KEEP LEARNING FROM UR MISTAKE AND BECOME GOOD TRADER
Education
by TRADELIKEPROFFSIONALS
HOW THE HARMONIC PATTERNS HELP IN OPTION TRADING AND VOLATILITYThe underlying chart gives us the data but it is important to look into the options chart for the trade. We normally wait for the breakouts to happen in the underlying chart but they happen way ahead in the options chart. By the time we take a trade in the options, it would have been late in options pricing. Below is the bank nifty options chart You can see that the breakouts are happening in both charts. Normally, the terminal bar price for a XACBD bearish butterfly pattern will be at the 1.618 fib ratio. However, for the shorts who enter at this level, the stop loss will be the next fib ratio i.e., 2 in this case. Shorts who entered at 1.618 would have exited in a loss at 2 level, then the price reversed drastically. The long traders who thought there would be a short-covering are trapped mercilessly. This pattern would have benefitted the traders who entered at point B (164.5) and trailed until 1.618 level ( D=197). The price pushed above until 2 (212) but hasn't closed above it and came down quickly. This trade would have given at least 20% for the longs. What I've learned from the harmonics in the volatile and fast-moving scripts is that always mark stop-loss levels also and wait for the price action to proceed. This post is just to show the importance of harmonics in options trading and for educational purposes. Give a like and leave a comment if this helps you. Happy trading :)
NSE:BANKNIFTYEducation
by Sanjan91
2
Few learnings I want to share taking Adaniports daily chartFew learnings I want to share taking Adaniports daily chart as example: EMA’s 13,50 and 200 are plotted in the chart. An ideal price should always be near to all EMA’s but due to demand and supply and various other factors, price revolves around the EMA’s. High demand or High supply will make these EMA’s move away from each other. But the fact is after some time they settle and come closer to each other. Smallest EMA moves faster and first than largest EMA which moves last and slow for all price action movements. These are the opportunities which traders need to profit buy entering at correct time to ensure appropriate and maximum profits are earned. It takes time, learnings, experience to understand these concepts for entry and exit. From 2021 beginning the price is ascending constantly and taking 13 EMA as support. Instead of 13 EMA, 20 EMA can also be plotted. 13 EMA helps us for a day trading as well as for short and long terms, hence we used 13, 50 and 200 EMA to address the needs of all types of trading. When ever price goes far away from 13 EMA/20 EMA, it will comes back to test or take support before moving on. If 13 EMA/50EMA are above 200 EMA its considered as uptrend and if they are below 200 EMA, its considered as downtrend. In the current example since beginning of 2021, price is in uptrend hance 13 EMA is above 50 EMA and these two are above 200 EMA proving the uptrend. Once price reaches its high or demand lacks, price wont fall suddenly, it will consolidate for some time and then inches to touch the small EMA, here its 13 EMA and takes support (17th Mar) and then goes for a higher high (7th April 20201 example). If 13 EMA support is broken then price tends to go and touch 50 EMA and take support (22nd April) and then makes higher high (7th Jun). After this price couldn’t sustain but with a huge gap down it went and touch 50 EMA and skipped 13 EMA. These gaps will subsequently gets filled, in a few day or few weeks or few months but surely gaps get filled up (example 17th Oct and 18th Oct gap filled up). When price tends to go lower and if 13 EMA crossed 50 EMA from top then higher chances of price to touch 200 EMA or at least it will go very nearby to 200 EMA before reversing. Flag pattern - Last two months (Mid Aug and Sep till Oct mid), we can see a flag pattern and it got broken on 13th Oct and price making highs covering earlier gaps. Now the probability of price touching earlier highs are very high. This is how we can use EMA’s to optimum and can have a proper entry and exit points for intraday, short term or long term trading. Wicks – Now let’s talk about wicks, some people consider them and some won’t consider. Here we considered wicks and some learnings we want to share. When ever we see big wicks it means there are traders to buy or sell in that wick space. This means eventually that wicks will get filled up. Example, if you see 7th April/16th April there is a long wick on the up side and eventually it got filled up in over May period. Color of candle doesn’t matter here when big wicks are made. Same way 14th Jun a hug wick on down side and got filled in couple of days. Fibonacci – Two Fib levels are plotted to see how price respects them. 0.382 and 0.5 are crucial for a retracement and if support taken then price can move up. At the same time 0.618 if broken then the trend in retracement will continue. Hope above information on EMA, wicks, Fib levels along with a flag break out example and also a trending up and down market we could learn from this example. Disclaimer : This analysis is only for educational purpose and not be considered as any trading idea/tip. Please consult your financial advisor before you take any trade and we are no way responsible for your profits/losses. Thank you! Please do like and share this idea. Thanks
NSE:ADANIPORTSEducation
by AdhigamaTrading
🔥 IGL. What You Are Getting By this view ,Tell us in comment.NSE:IGL let's make this analysis a bit interactive. As per this technical analysis #igl share at support if we can find reversal at this levels then igl share might fly from here. Tell us in comment what you are getting from this view. ******whatever charts or levels sharing here are just for educational purpose only, not a recommendation. Please do your own analysis before taking any trade on them. We are not SEBI registered.
NSE:IGLEducation
by linesandlevels
2
TRADE SETUP WITH ABCD PATTERN. GET YOUR SWINGS RIGHT. NIFTY50This tutorial is on the ABCD pattern and the instrument used here is Nifty 50. ABCD patterns are harmonics patterns from which swings lows and swing highs can be forecasted. The present situation is a bearish ABCD pattern. Each point denotes endpoints of the swings. A, B and C denote known swing points whereas D denotes the new swing high. The trade setup is explained on the chart for both longs and shorts. On breakout of point B, a swing high is taken out and point D would be our new swing high or it might be in the PRZ. For shorts, directly you could open a position at point D but confirmation is breaking off the trendline in the shorter timeframe. The profit-taking for the short position will be at 0.382-0.618 fib retracements of CD. The price bounced off from the 0.618 fib retracement. Harmonic patterns give us decent risk-reward ratios for the trades. Practicing these and getting the logic would make us a lot better. You can check out my ideas where I often use harmonics to analyze and give a trade setup. This is just an educational post. Going long and short immediately could not be practical at all times. :)
NSE:NIFTYEducation
by Sanjan91
One of my biggest lessons market taught me, read description.I always wanted more from the swing trades I took and I failed to recognise the right target for my trade which many times lead to the stock going down from a major resistance or a trend reversal because of the resistance zone because of which i had to lose a winning trade many times and with time and practice i realised what is best for me is to sell that stock in a major resistance if there is no sign if it will break the resistance such as accumulating volume, anyway i can buy the stock back if it manages to break the resistance , in the reference chart also we can see two major trend reversals because of the resistance.
NSE:GMDCLTDEducation
by Jayesh_chopra
2
Wyckoff Distribution Scheme - Catch early - Beat the Operators!A classic example of Wyckoff Distribution catching retail investors off guard in Olectra Greentech Limited over a couple of years. It is important to analyze the same chart through different time-frames. New patterns can emerge this way! Full Text Reference, highly recommended must-read - school.stockcharts.com PSY—preliminary supply, where large interests begin to unload shares in quantity after a pronounced up-move. Volume expands and price spread widens, signaling that a change in trend may be approaching. BC—buying climax, during which there are often marked increases in volume and price spread. The force of buying reaches a climax, with heavy or urgent buying by the public being filled by professional interests at prices near a top. A BC often coincides with a great earnings report or other good news, since the large operators require huge demand from the public to sell their shares without depressing the stock price. AR—automatic reaction. With intense buying substantially diminished after the BC and heavy supply continuing, an AR takes place. The low of this selloff helps define the lower boundary of the distribution TR. ST—secondary test, in which price revisits the area of the BC to test the demand/supply balance at these price levels. For a top to be confirmed, supply must outweigh demand; volume and spread should thus decrease as price approaches the resistance area of the BC. An ST may take the form of an upthrust (UT), in which price moves above the resistance represented by the BC and possibly other STs before quickly reversing to close below resistance. After a UT, price often tests the lower boundary of the TR. SOW—sign of weakness, observable as a down-move to (or slightly past) the lower boundary of the TR, usually occurring on increased spread and volume. The AR and the initial SOW(s) indicate a change of character in the price action of the stock: supply is now dominant. LPSY—last point of supply. After testing support on a SOW, a feeble rally on narrow spread shows that the market is having considerable difficulty advancing. This inability to rally may be due to weak demand, substantial supply or both. LPSYs represent exhaustion of demand and the last waves of large operators’ distribution before markdown begins in earnest. UTAD—upthrust after distribution. A UTAD is the distributional counterpart to the spring and terminal shakeout in the accumulation TR. It occurs in the latter stages of the TR and provides a definitive test of new demand after a breakout above TR resistance. Analogous to springs and shakeouts, a UTAD is not a required structural element: the TR in Distribution Schematic #1 contains a UTAD, while the TR in Distribution Schematic #2 does not.
NSE:OLECTRAEducation
by Wolf-AD7
2
Emotions You Also Have To Deal With !Hi Friends and Traders, Thought of sharing this interesting trade that really tested my patience and invoked all sorts of thoughts (that one has to control) to win over the markets. Perfect Entry Good Risk to Reward Market was not in the mood to reward me yet :-) Went completely sideways for almost 20 days Stuck with the trade as the price was in HH , HL formation and way above my SL levels As per my analysis 140 level was crucial and breakout above that was needed to sustain at higher levels Stock attempted multiple times and my conviction grew However as time progressed , movement became more sluggish Stock started making LH , LL Swing Highs started moving lower Crucial Support Zone started being tested by SELLERS multiple times No Matter What My Initial Exceptions Were - Market was NOW indicating that It has no Steam left to give me the MOVE I expected...Expiry was 2 days away and margin requirements would HIT THE SKY. IT WAS Time to Cut The Trade - All and All a PROFITABLE TRADE (approx. 10 K Per Lot) Lots of Learnings that a starter should take from this : NEVER EXIT YOUR UNLESS YOU HIT STOP LOSS OR TARGET PROFIT DO NOT LET YOUR THOUGHTS MAKE YOU DO TRADING ERRORS DO NOT OVER ANALYSE THE TRADE ONCE YOU ENTER TRADE WHAT YOU SEE AND NOT WHAT YOU THINK CONTROL YOUR EMOTIONS (FRUSTRATION , PANIC , ANGUISH , GREED ) P.S: ROLLOVER TO JULY ON THE CARDS
NSE:IGLEducation
by FourSTechnicalAnalysis