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What is Price Action ? Beginners Guide in Easy Steps Part -2In our previous discussion, we delved into the fundamental techniques of reading a price chart with key price action strategies. This time, we're set to expand our understanding even further. By the end of this article, you'll have a fresh perspective on analyzing charts and interpreting price movements, empowering you with deeper insights and more confident trading decisions. 1. Identify the direction of trend with the help of price action candlesticks a.)Strong Uptrend: Green candlesticks moving upwards continuously. Indicates strong buying pressure with no selling pressure. b.)Uptrend with Deep Retracement: Green candlesticks with some pullbacks. Sellers present, causing temporary price dips. c.)Indecisive Market: Alternating red and green candlesticks. No clear market direction, prices moving up and down without strong conviction. d.)Tight Range Before Breakout: Small red and green candlesticks within a tight range. Usually occurs before a significant breakout. e.)Weak Uptrend with Choppy Price Action: Alternating red and green candlesticks, choppy pattern. Indicates weak buying pressure and strong selling presence. f.)Healthy Uptrend: Green candlesticks with few red ones. Strong buying pressure with minimal selling, indicating a solid upward trend. 2. Importance of Wicks and the closing of candle Wick and a Doji Candle: Indicates early signs of buyers attempting to stop the price decline, If you observe closely there is a wick in previous candle also, on the break of high of the candle price hit trendline resistance and fallen again. Second Wick at the Same Zone: Sellers tried to push the price down again, but buyers stopped it, forming a bullish pin bar. First wick formed a demand zone but the second wick confirmed of buyers activity. After Some Fight, Buyers Win: Buyers managed to push the price up From the range, kicking out the sellers. More Lower Wicks: Indicates both buyers and sellers are active, but buyers are gradually winning, which is bullish. Lower Wick Shows Demand: After a downturn, the lower wick signals demand coming in. Inside Bar with Bigger Upper Wick: Shows bearish bias. The break of the low led to the continuation of the fall. NOTE: Wicks are an early indication of demand or supply presence, but the location of formation will be more important.It would help if you determined whether it's in an uptrend, downtrend, or range. 3. Multiple Candle Rejection A)Exhaustion Gap: At one point, the chart shows a gap up, where the opening price equaled the high of the day. This indicates an exhaustion gap, suggesting potential for a larger correction. Despite this, only a single bar correction occurred initially, showing resilience. B)Brutal Correction: A sharp, one-bar correction is seen, followed by buyers trying to push the prices back up within the same candle. This indicates a strong fight between buyers and sellers. C)Inside Bars and Tight Range: The presence of multiple inside bars with tight ranges and prominent lower wicks signals consolidation and market indecision. This is a period where neither buyers nor sellers dominate, often preceding a significant move. D)Break and Continuation: Eventually, the price breaks and closes above the range of the inside bars. This breakout triggers a continuation of the uptrend, evidenced by the subsequent series of green candles and higher prices. #Understanding Candlestick Wicks: Wicks/Tails: These are crucial as they indicate early signs of demand or supply. In this chart, the lower wicks suggest that buyers are stepping in at lower prices, even during pullbacks, showing underlying strength. 4.Importance of Close Of Candle If you wait for close of the Candle beyond support or resistance zone then it can help you take high-probability entries only and avoid fake breakouts. Fake breakout means when the price breaks the support or resistance area but it failed to sustain beyond that area and quickly comes inside the range. That's all for today's idea I hope you have gained good insights into how to read market direction with the help of candlesticks structure If you read market direction in consideration with the factors explained in Part 1 then the outcomes will be Great. If this idea helped you learn something new hit the boost button and share with your friends, Stay tuned new ideas in this series coming soon. Keep Learning, Happy Trading. NSE:NIFTY
NSE:NIFTYEducation
by SANJAYPATIDAR_
2
Life of a Trader / Option's // StocksEmotional reactions Overcoming your emotions is another hurdle you may encounter as a new trader. You may make impulsive decisions out of greed, fear, anger, frustration, or excessive optimism. This can lead to losses, which in turn can reduce your confidence. To ensure you don't fall into the trap of your emotions, chalk out a detailed and rule-based strategy and try to follow it strictly. Review your trades regularly to learn from your mistakes and build stable trading behaviour. You can keep a trading journal and implement stop-loss orders to reduce emotional influence on your trading decisions. Overtrading Another common challenge that can come your way is the temptation to overtrade. You may feel tempted to overtrade to earn higher earnings or overcome losses quickly. However, more trades don’t necessarily translate into more money. Overtrading can increase your risk exposure and increase transaction costs. To overcome the temptation to overtrading, you can set predefined limits on daily or weekly trades and take a break when you reach the limit. You must also ensure that you engage in trades that align with your strategy and do not prioritise quantity over quality. Impatience As a new trader, you may lack the patience to stick to your trading strategy, especially during market fluctuations. You may opt for premature exits if gains don't materialise as quickly as expected. However, success in trading does not come overnight. You must wait for the right opportunities and patiently endure losses and phases of stagnation. A solution to this problem is to have a solid trading strategy with clear entry and exit criteria. Have faith in your plan and give it the time to work. Avoid changing your strategy too often. Once you have a solid strategy, be patient, wait for the right time and grab your opportunity. Poor risk management The stock market is highly volatile and unpredictable. One day, a stock can rise by 20% and plummet suddenly the following day. Such frequent changes in the price of an asset can overwhelm you. It also makes it challenging to plan your strategy and manage risks. You may feel tempted to chase high returns and take excessive risks. However, this can wipe out your capital in no time. This is why risk management is important in trading. Make sure your trades align not only with your strategy but also your risk profile. Before placing a trade, analyse your risk-per-trade and reward-to-risk ratio. Diversify investments to spread risks across different sectors and assets to protect your capital. Include clear entry and exit points and an emergency way in your strategy. Using stop-loss orders can also help tackle risks and minimise losses. Conclusion The stock market is both alluring and daunting. Without proper knowledge and skills, you may incur losses and even quit prematurely if things don't go as expected. However, understanding the challenges beginners often face and learning to overcome them can illuminate your path to success.
NSE:BANKNIFTYEducation
by EmpireCrown
What Is India VIX & Its impact on the Market Q: What is India VIX? Ans) India VIX, or India Volatility Index, measures the market's expectation of volatility over the near term. It is often referred to as the "Fear Gauge" as it indicates the level of fear or risk in the market. Higher VIX values indicate higher expected volatility, while lower values suggest lower expected Volatility. Q: What does a High India VIX indicate? Ans) A High India VIX indicates that traders expect significant volatility in the market. This often corresponds with market uncertainty or fear, possibly due to Economic Events, Political instability, or other factors that might cause large price swings. Q: What does a L ow India VIX indicate? Ans) Low India VIX suggests that traders expect the market to be relatively stable in the near term. This typically corresponds with periods of market confidence and lower perceived risk. Q: How do major events affect India VIX? Ans) Major Events such as Elections, Economic Announcements, Geopolitical Tensions, or Natural Disasters can significantly impact India VIX. These events often lead to increased uncertainty and Fear, causing India VIX to spike as traders anticipate greater market volatility. These are some of the Basic information about the India VIX and its impact on the Market Like & Follow for more Educational Posts ✍️
NSE:INDIAVIXEducation
by Himanu_HATradeTalk1
Balaji Amines formed big positive candle after Q4 ResultsWithing 15 mins, the stock formed a significant candle of 12% Increased volatility around stock earnings is a common phenomenon in financial markets. As companies release their quarterly or annual earnings reports, big investors eagerly anticipate the results, which can lead to heightened trading activity. Positive earnings surprises may cause a surge in buying activity, driving up stock prices, while negative surprises can trigger selling pressure, leading to price declines. Consequently, during earnings seasons, markets can experience sharp movements in stock prices therefore short term trading becomes Risky around imp events.
NSE:BALAMINESEducation
by Himanu_HATradeTalk1
Balaji Amines formed BIg candle after Q4 Results Wihin 30 mins, the stock formed a significant candle of 12% Increased volatility around stock earnings is a common phenomenon in financial markets. As companies release their quarterly or annual earnings reports, BIg investors eagerly anticipate the results, which can lead to heightened trading activity. Positive earnings surprises may cause a surge in buying activity, driving up stock prices, while Negative surprises can trigger selling pressure, leading to price declines. Consequently, during earnings seasons, markets can experience sharp movements in stock prices therefore short term trading becomes Risky
NSE:BALAMINESEducation
by Himanu_HATradeTalk1
1
A 50-day moving average (50 DMA/SMA/EMA)A 50-day moving average (50 DMA) is a technical indicator that shows the average closing price of a security over the last 50 days. It's a popular indicator because it's realistic and effective at showing historical price movement trends. Concept of 50 Moving Average 1. Entry - Candle crossover 50 MA: This refers to a situation where the closing price of a candle crosses above the 50-period moving average line. When the candle's closing price moves from below the 50 MA to above it, it indicates potential upward momentum in the price action. This could signal a bullish trend or a potential buying opportunity. 2. Exit: - Distance between 50 MA and Candle: This involves monitoring the distance between the closing price of the candle and the 50-period moving average. If the distance becomes significantly large, it may indicate an overextended market and a potential reversal. Traders might consider taking profits or preparing for a reversal signal. - Candle crossunder 50 MA: This occurs when the closing price of a candle crosses below the 50-period moving average line. It suggests potential downward momentum in the price action. This could signal a bearish trend or a potential selling opportunity. 3. No Trade Zone (Sideways): - Use Box Breakout Strategy: In a sideways or ranging market where the price moves within a defined range, a breakout strategy can be employed. A box breakout strategy involves identifying a range-bound market where the price oscillates between a support and resistance level (forming a box-like pattern). Traders look for breakouts above the resistance or below the support level to initiate trades. This helps avoid trading during periods of low volatility and indecision, typical of sideways markets, and instead focuses on capturing potential momentum during breakout movements.
NSE:NIFTYEducation
by NaveenTTR
What you need to become a successful trader?here we have discussed what are the important things that you will need to become a successful trader. 1. Techinical Analysis Skill: Understanding the chart behaviour; Price Volume Support and resistance Trendlines 2. Risk Capability How much money you can afford to lose on a single order, and on a single day. 3. Peace of Mind Are you having a thought that might disturb your trade making decision. You must have a calm and peaceful mind for being a successful trader. 4. Trade Managment Trade management is the skill that gives you the power to make intelligent decisions based on the analysis of which point is the best point to enter and exit from the trade.
NSE:BANKNIFTYEducation
by finnova_
2
Learning from trader's mistakes: Turning 37L loss to 1L balance📈 The stock market can be a thrilling but challenging place, especially for new traders. Recently, I had a conversation with a fellow trader who went through a rough patch and sought help to recover from his losses. Let's delve into his experience and extract essential lessons for aspiring traders to navigate the stock market wisely. 📜 The Trader's Story: On 26 July, I received a message from a trader who felt really down because he lost a lot of money in the stock market. He had started with a good amount, but unfortunately, he ended up losing a massive 37 lakh Indian rupees, leaving him with just 1 lakh rupees now. He was feeling desperate to find a quick solution to recover his losses and offered to pay me for my trading advice. 🚫 Seeking Quick Solutions: In his desperation, the trader was searching for quick solutions to recover his losses. He hoped that by following my trading calls, he could turn things around and make up for the losses he suffered. However, I knew that seeking quick fixes rarely works in the stock market. It's essential to understand that success takes time, and there are no shortcuts to making a quick fortune. 💭 Setting Realistic Goals: One of the major problems the trader is facing is setting unrealistic goals. He wanted to turn his 1 lakh rupees into 37 lakh rupees rapidly, which is a very impractical approach. In the stock market, it's crucial to set achievable goals and have patience. Building wealth takes time and consistent effort, not overnight miracles. 🚫 Avoid Blindly Following Others: A significant mistake the trader made was blindly following others' advice without fully understanding the reasons behind it. He didn't do his own research and simply followed what others suggested. This can be dangerous because not all advice is reliable or suitable for your specific situation. It's crucial to learn about the market and make informed decisions based on your knowledge. He is repeating this mistake again by asking me to give trading calls 🚫 Chasing Tips and Rumours: The trader's reliance on trading calls from random sources like telegram groups exposed him to unreliable advice and rumours. It's essential to avoid chasing hot tips or acting on rumours without verification. Successful trading is based on well-researched decisions and a deep understanding of the assets you're investing in. 💼 Stay in Control of Your Account: Handing over control of his trading account was another big mistake the trader made. When you let someone else trade on your behalf, you lose control over your money and decisions. It's essential to stay in charge of your account and take full responsibility for your trades. 🚫 Trading Without a Plan: Another significant mistake was trading without a well-defined plan. The trader didn't have clear entry and exit strategies, which led to impulsive decisions. Having a trading plan that outlines your goals, risk tolerance, and trading strategies is crucial for maintaining consistency and discipline in your trading approach. 🚫 Trading with Emotions: The trader's emotional trading behaviour was a major stumbling block. Emotions like fear, greed, and impatience can cloud judgment and lead to irrational decisions. Keeping emotions in check and following your trading plan objectively is key to making informed choices. Overtrading: 🔄 The trader's eagerness to recover losses quickly made him overtrade and take unnecessary risks. Overtrading can lead to increased transaction costs and potential losses due to impulsive decision-making. Patience is vital in trading, waiting for the right opportunities instead of rushing into trades. 🎓 Lack of Education and Continuous Learning: The trader's lack of proper education and continuous learning was evident in his approach. Successful traders never stop learning and improving their skills. Keeping yourself updated on market trends, economic developments, and trading strategies is essential to adapt to dynamic market conditions. 📚 Learning and Practice are Key: The trader lacked proper knowledge and practice. I stressed the importance of learning about the stock market and practicing with small amounts before risking significant money. Trading is a skill that requires practice to improve. 📉 Ignoring Market Trends and Analysis: The trader failed to pay attention to market trends and analysis. Successful trading involves studying charts, technical indicators, and fundamental factors that impact the market. Ignoring these critical aspects can result in making uninformed decisions and being ill-prepared for market shifts. 🏁 Final Conclusion: The trader's journey through significant losses in the stock market provides us with valuable lessons to improve our trading approach. Avoiding quick fixes, setting realistic goals, conducting thorough research, and staying in control of your account are vital for success. Implementing risk management strategies, trading with discipline, and avoiding emotional decisions are essential for consistent profitability. Remember, trading is a journey of continuous learning, and embracing a growth mindset will help you become a successful trader in the long run. Happy trading and may your journey be filled with profitable experiences. Remember, the stock market is a journey, and it's okay to make mistakes as long as you learn from them and keep improving. 👍 If you find this learning article helpful, please like and comment with your observations. Your support keeps me motivated to write consistently. Follow me on TradingView for more articles and trade setups: in.tradingview.com 🚀 Keep improving, stay disciplined
NSE:NIFTYEducation
by AfnanTAjuddin
dual top pattern explained in simple form The dual top pattern is a popular technical analysis pattern that can signal a potential trend reversal. This pattern is formed when the price of an asset reaches a resistance level twice and fails to break above it. The two peaks of the pattern look like two mountain tops that are approximately equal in height, with a dip or valley in between them. The neckline of the pattern is drawn by connecting the lows between the two peaks. A breakdown below the neckline is considered a sell signal, as it suggests that the price is likely to continue to decline. The dual top pattern is an important tool for traders because it can help to identify potential trend reversals. However, it's important to confirm the pattern with other indicators and analysis before making trading decisions. For example, traders might look for other technical signals such as a bearish divergence or a break below a key support level to confirm the dual top pattern. Additionally, traders may use fundamental analysis to gain insight into the underlying factors that are driving the price movement of the asset. Overall, the dual top pattern is a powerful tool for traders to identify potential trend reversals, but it's important to approach it with caution and to use other analysis techniques to confirm the signal before making trading decisions. In the below example, a newbie too would be able to learn and practice trend reversal using double top pattern Dual top pattern = potential trend reversal. Look for two mountain tops with a valley in between. The resistance level was reached twice but was not broken Draw the neckline by connecting lows between the peaks. A breakdown below the neckline = sell signal. Remember, the dual top pattern can be a powerful tool for traders to identify potential trend reversals, but it's important to confirm with other indicators and analysis before making trading decisions.
NSE:HDFCLIFEEducation
by pratik2358
1
As 'Above' so 'Below' - the harmony of natureIn this real world, there is various philosophy that tries to explain the "As above, so below" harmony is the great law of nature but none can prove this law hence it's still a hypothesis. The law of nature works on everything and the stock market is not untouched by nature. I am not here to give a lecture on this law of nature but to prove how this harmony of nature is preserved in the stock market and to share my research work on 'Stock-et' science which is equally difficult as 'Rocket' science. Many of you have heard of these famous patterns:- 'Head and Shoulder' 'Cup and Handle' 'Rounding Top/Bottom' 'Flag/Pennant' 'Double Top/Bottom' Do you all observe some correlation among them? They all are candlestick patterns that either decide reversal or continuation, if this was your observation then probably you are correct but I wasn't indicating this. Let me explain to you what kind of relationship I was talking about. How do we estimate the target of these patterns? To the target level, we first measure the depth of the pattern i.e. how deep it's below the breakout level. As its depth is below so will the height above. Now, I think you all can draw how this law of nature is respected here in the candlestick pattern or more precisely in the stock market. Let’s have an example to be more sound:- The above chart describes how the CUP pattern works following this law of nature. The stock after the breakout rallied non-stop to attain the e height of +94% which was the depth of the cup pattern. After attaining the target or say 'equilibrium' stock witnessed a jerk, not before that. This proves how the market preserves "As above, so below" harmony, the great law of nature. Still not convinced then look to another example, This is the vice-versa of the previously explained example, here stock attains the depth of -17% i.e. ' equilibrium' after forming a Head and Shoulder pattern with a height of shoulder +17%. This proves how the market preserves "As below, so above" harmony, the great law of nature. Now let's look at this concept with different dimensions i.e. dimensions of mathematics, physics, and chemistry. Don’t be afraid I'm not going to talk about 'rocket' science but 'stock-et' science. [list [ In math, we all have read negative and positive cancels out i.e. (-3+3=0) same in candlestick patterns if the stock has a pattern depth of then the pattern target would be +30% to attain '0' or say 'equilibrium'. In physics, we all have read that negative charges neutralize the positive charge to attain 'equilibrium' same in the stock market. In chemistry, we all have read that all chemical changes occur in nature to attain 'equilibrium' i.e. two elements share their electrons to attain 'stability' (H2O, here two hydrogen molecules share their 1 electron with 6 electrons of oxygen to attain equilibrium) this same happens in markets all market movements occur to attain 'stability'. Generally, people have fantasies about 'Rocket' science but we traders have fantasies about 'Stock-et' science. Please drop comments on whether you have a fantasy for any of the above science. Also, let me know how many of you believe that the stock market doesn't work on speculation but has its science let's call it 'Stock-et' science.
NSE:NIFTYEducation
by Chaser30
2
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
Thanks to the greatest teacher 'THE MARKET' !!!This publication is dedicated to thanking one of the greatest and strict teacher the ‘Stock Market’. The lessons of the market not only help one to succeed in the stock market but also helps throughout life. This 5th September i.e. Teacher’s day let’s have a detailed look at 5 Great Learnings of Stock Market and thank her for these life-awakening learnings. -> Discipline: The most important teaching in markets is discipline. As the wording of Jim Rohn states “Discipline is the bridge between goals and accomplishment” stock market develops that bridge. The market has its way of teaching and punishing, I think all of us had witnessed its punishment whether in form of not keeping stop loss or not following your trade system. Discipline plays a vital role in an individual’s life. As said by Horace “Rule your mind or it will rule you. ”The disciplined person has the power to rule his mind whereas others lack this ability. -> Patience: Another gem cultivated by markets in our personality and harvested by us throughout life. One of the familiar names of our school time Benjamin Franklin says “He that can have patience can have what he will.” market first teaches this gem to us then offer us what we wish. We all have at least once missed taking the real profit by not waiting till the target is achieved but leaving the trade in midway though it was moving in our direction the reason is we lack patience and the market gives profit only to eligible ones so, either you be eligible or market will make you fit for it by its own way. -> Ability to conquer 3 gateways of hell: According to ‘The Bhagavad Gita’ there are 3 gateways to hell i.e. Lust, Greed, and Anger. The market helps its students in conquering those strong emotions. The beginner in the stock market has a strong lust for making money very quickly and greed for making lots of money without that kind of effort and when he fails in his motive anger gets born in his personality from where degradation or hell starts. Those few people who still have not left the hands of the market get the knowledge to conquer those emotions throughout their journey in markets. -> Faith in yourself: One of the famous quotes by Ralph Waldo Emerson is “The best lightning rod for your protection is your own spine.” market strengthen that spine so that we as its student can withstand any kind of storm in our life. Before taking any trade based on your analysis requires self-belief on the early days people hesitate but later they rely on their analysis because the market has taught them self-belief. -> Crush your arrogance: Market is popular in crushing the arrogant guy along with this removing any trace of arrogance in his personality. The famous wording says “Close some doors today. Not because of pride, incapacity, or arrogance, but simply because they lead you nowhere.” market as a kind teacher keep a keen eye on her student for arrogance as she knows that as soon as arrogance arises person starts his fall. All of us had witnessed that whenever we start thinking that we have mastered markets and try to neglect discipline market slaps us badly to awaken us that we are still newbies and still had to learn a lot. According to me, these 5 are the most valuable learnings of markets but if you have any learning of market much valuable in your life please mention in comments. Also, comment which subjects teacher in your school life is as strict as the stock market, for me its 2nd language(Hindi) teacher. Finally great thanks to 'The Market' for these great teachings. The stock market gives success only to eligible ones so, either you be eligible or the market will make you fit for it in its own way.
NSE:NIFTYEducation
by Chaser30
15
Control emotions during tradeIt is very important to control your emotions during trading, human emotions are a big hurdle in trading, you can not maintain discipline if you can not having control on your emotions. Without discipline you can make money in market but you can't retain it. Here is 5 things you can adopt to improve your trading skill and control emotions. SET ALERTS : we use to watch market continuously and during watch we see so many trades which we should not take, it disturb our trade filtration and also affect out trading phycology, we should wait for our levels and what our set strategy giving trade not to enter early or fake trades, you should set alert according to your levels,chart pattern,breakout or breakdown, any of your trading strategy you are using, there is no need to watch screen constantly in this free time you can also paly any indoor game to keep you mind refreshing and active, once your price alert hit come up on screen then you can go with your trade. VOLATILE HOUR : some time we find trades in sideways or less movementing market and it face us stop loss, no movement or very small target, it's better to took any trade in volatile hours so that trade can exactly work according to your strategy try to avoid trades which are generating in less market movement. Generally Indian market movement is 9:15 to 9:30 very volatile 9:30 to 10:00 volatile market 10:00 to 11:30 stable market 12:00 to 2:00 correction/stable/new/global market 2:30 to 3:00 volatile 3:00 to 3:30 last volatility NEVER WATCH YOUR PROFIT & LOSS DURING TRADE : when we see running profit loss in dmat it automatically affect psychology of trade and we start convening our self for exit, same side in profit and and loss also some time we more think to hold that trade either to exit. we should took trade and either to see p&L we should watch only price and exactly exit according to our strategy do not exit too early do not exit too late if you took that trade according to your pattern, technical any strategy then you should also exit according to that strategy. watching price in compare of P&L helps a lot for long run. STOP AFTER THREE CONSECUTIVE WINS OR LOSSES : it is very important to stop at a point every day in trading, if you did 3 trades either continuously wining trade or loosing trade, at this point you should stop your trading for the day. market is not for one day it will open again next day with same things. do not excited in profit and also in loss, if it was bad day not a problem close your terminal come again next day with fresh mind do not influence your fresh trade with old one . TAKE BREAKS : taking break in trading is very important to keep your mind happy active and fresh every time, as just we do keep our personal and professional life separate, do not mass up one with other. take your self out on weekend do not think about your regular profit and loss take proper break that you need.
NSE:NIFTYEducation
by ProfitPicks
3
Learning is extremely crucial investinglearning is the process of learning merely by observing our surroundings life is too small to make every mistake and then learn from it. A smart person always learns from others mistakes. Importance of Vicarious learning in investing Profit booking: Behavioural scientists have often proposed that we feel the pain much more than pleasure. If we have had a bad experience of stocks in the past, then, we are pretty sensitive towards the pain. And, in that process, we may not prefer to sell bad performing stocks because we don’t want to incur any more losses. And, we may keep thinking about booking heavy profits from stocks while still holding on to bad stocks, but, is it going to work this way? So, vicarious learners learn that to incur good profits, it is important to critically evaluate bad performing stocks, and get rid of them at the earliest. Quality Check: When it comes to mutual fund investment, the idea of staying invested for long works out for better. But, for an individual investor the same does not work in case the stock pricing go wrong due to some damaging cause such as fraudulent activities of the management. So, here waiting to see things turnaround wont make much sense. Thus, vicarious learning in stock investment teaches you to believe in value investing by deeply analysing the companies on varied fronts rather than simply investing for the heck of it. Winning stocks: Many self-investors believe in keenly observing the winning stocks as they are still not able to decide whether they would want to invest in those stocks. Vicarious learning goes a long way in teaching investors to formulate a couple of strategies before blindly investing in winning stocks. Correcting errors: Vicarious learning teaches us to correct our errors by observing other expert investors. Instead of limiting the potential to invest, it is rather imperative to learn from mistakes and keep investing. Fears take over investors only when they refuse to learn from the mistakes they have made in the past. So, vicarious learning plays a major role in correcting errors and overcoming the fear of investment. Value investing: Vicarious learning teaches us a lot about not just investment but about approaching the life in a much better way. The legendary investors like Warren Buffet and Charlie Munger are the perfect examples of vicarious learners. They devised their own theories and strategies for investment with the valuable learnings they derived by being keen observers. And, now the entire world of investors has turned out to be vicarious learners trying to learn the investing psychology of Warren Buffet and Charlie Munger.
NSE:NIFTYEducation
by ProfitPicks
2
Accumulation and DistributionThis is how a typical accumulation and distribution phase works in stocks Usually, we are thought about how to trade moving average cross overs, but actual cinema runs behind the picture is that there is a whole lot of accumulation that goes on by big boys, and a typical breakout scenario is created by distributing which is reflected in chart patterns please go through public and others holdings to understand more, Retailers lack patience and capital and this is the only key for big players to accumulate for long periods
NSE:HGINFRAEducation
by Solivagant_Trader
Understanding patterns - PART 1Patterns have been in use for as long as technical analysis have existed and are working today also, traders all over the world try to find patterns in chart to anticipate the possibility of the next move for any Index or stock. Pattern have a reason for working this greatly because all the patterns have an underlying psychology behind it and all these are driven by none other than the human emotions that lie behind them. What are patterns? According to John J Murphy "Price patterns are pictures or formations, which appear on price charts of stocks or commodities, that can be classified into different categories, and have a predictive value." Putting it simply these are formations of candles which take a special shape when seen together and give you an idea of the future possible move of any script. Why do patterns work? Patterns work because they are the depiction of human emotions in the market and clearly shows what the traders in the market want a stock or commodity to do in a particular timeframe, now it must be odd and you may be thinking that how can a simple pattern or movement of the candles can tell you what is going inside the minds of people. Let me give you an idea so that you understand what is it that I mean by reading the minds of the traders using pattern and understanding what they want a particular stock or commodity to do. The chart that you see above is hindalco which is listed on NSE. To understand this let me tell you about the white lines you see, these are called trendlines and are made by connecting highs to highs or lows to lows to get an idea of the trend on current ongoing move or to make a pattern. The pattern you see above is called ascending triangle pattern and is a bullish structure that when gives a breakout the stock or commodity gives a run for the upside. Now the answer to the the question why ascending triangle pattern is bullish and how we get to anticipate the future movement lies in the human emotion or psychology that made this pattern in the market and it will also explain how you understand the human emotion in the market depicted as pattern. This ascending triangle pattern is made by joining two line which I have named as trendline 1/resistance & trendline 2/support. Trendline 1/Resistance shows us that the bears are not willing to let the price go beyond the levels of 470 and are shorting the stock near that price. Bears are wanting the stock to remain below the 470 price level. Trendline2/Support tells us that the bulls are buying the stock on higher prices again and again that's the reason the trendline is inclined, bulls are wanting the stock to go up. Now all of this tells us that right now bulls are more aggressive than the bears as bears are not willing to short below the price of 470 but bulls are ready to buy the stock at higher price and are the reason the price keeps surging up. There comes a time when both the lines meet and there is no buffer space left between buyers and sellers and the price can now only go in single direction now, so bulls being more aggressive breaks the resistance of 470 and the price moves above it. Now there are two things that are going to happen: 1. More buyers will come in to buy as the resistance is broken making the price rally even more. 2.Short positions will have to be covered for, which will yet again make the price move up. So that is how a mere pattern of a triangle joined by two line made you see the emotions of the traders inside the market and thus anticipate the future movement of price. Now this concept applies to all of the patterns there are in the market, some will be as simple as this one while others being more complex but all of these will make you a better trader letting you anticipate the movement. This was the end of Part one of this series in which I'll be trying to make you understand patterns and trade more effectively using them. The Next part will be the two main categories of pattern which will be in more depth and will actually help you anticipate the prices and add these pattern into your trading style. If you have read it far enough so please give it a like and do follow me for the next part which I'll try to drop on the next weekend.
NSE:VOLTASEducation
by this_is_shoaib
When To sell Stocks #Learning #StockMarket #StockIdeaswhen to sell a stock🧵 1) Repeated Corporate Governance issues - Exit a stock if there is news of repeated CG issues popping up every now and then. It takes a mountain to change a bad management. Better opportunities always exists. 2) If the financial performance of the company is declining - keep a watch on this over quarters to see if the performance in profits and sales is consistently going down. Attend AGM, Concalls to understand the reasons for same. 3) If the working capital days is increasing - keep a check on receivables days. A higher receivables days QoQ over a period, shows that working capital cycle is strained. 4) If borrowings increase - Check on if the borrowings have gone up due to capex or as a working capital effect. If for capex, check if company has ability to repay the same in a down cycle. Too much of leverage usually kills a business. 5) Key employees leaving the company in short interval of time - Often KMP like CFO, Compliance offer, VP, Director leave the company when they see something fishy in operations or when mgmt does not give heed to repeated red flag/warning. 6) When 5 yr Cash flow to operations(CFO)/EBITDA is less than 40% - There is no benchmark % for this but in my experience if the mgmt is not able to convert the profits into cash over a 5 yr period, it is better to exit the company. 7) When dividends are paid from borrowings - There are companies who often pay dividends from borrowings just to show they are shareholder friendly. Such companies usually bleed internally in their operations and over a point go bankrupt. 8) If Altman Z Score ratio (not applicable for financial companies) is <1.8 (in actual have it below 1.6). It uses profitability, leverage, liquidity, solvency and activity to predict whether a company has a high probability of becoming insolvent. Combine this with other factors 9) When the stock price reaches a point which no longer reflects the underlying business - This can be tricky as many a time stock price reflects sentiments of a proposed capex or potential opportunities for M&A/demerger been considered. Hence have sufficient Margin of Safety. 10) Hype & Hope story - Too much media attention can often lead to a hype created in guise of hope for a business turnaround which often leads to collapse once the frenzy fizzles out. Stay away or book profits from such moves. 11) When you feel like converting your trading position to investment position - Again having seen many (including myself at some point) convert trading position to investment, it has always lead to sunk investment. A trading stock hardly creates wealth in my experience. 12) Unrelated diversification by company - Example of Satyam is well known. Similarly when Avanti feeds acquired football team Blackburn rovers. Same with VRL logistics promoter announcing foray into airlines. Such unrelated diversification shows poor capital allocation. 13) When the investment gives you sleepless nights - Exit the investment at first go, if such investment keeps you awake all night.! If you have invested on a basis of thesis, stick on to such investment as long as rationale is playing out. 14) The company market share is falling - This might be due to competitor's entry into product lines or quality of product deteriorating. If the mgmt is not able to pull up its socks quickly, it might lose out a significant market share in no time with cascading effects. 15) When the company doesn't utilise the funds it was supposed to as per IPO - This applies usually for new IPO companies in first few yrs of Ops. If funds are utilised otherwise than for purpose it was raised for, Exit.! First signs of funds taken out of company by promoters. 16) Often investors sell stocks on basis of PE or on back of stock up in quick time. Many investors miss the journey of holding on to stocks for long time due to these factors. A company with high PE can continue to remain high for quite a long period of time without any correction. 17) At times, many of the above factors have to be combined to take a overall view. Likewise, better opportunities do come up as well for switch of stocks/industry bets. PF allocation as well matters along with diversification. Stick to your style of investing. 18) Selling stock is as important as buying one. Be invested as long as your rationale for investment and thesis is in place. Develop the urge of not selling stock when price is down but business continues to grow. Sooner or later, you will be REWARDED for your perseverance.!
NSE:NIFTYEducation
by Jordan_n-