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Ascending Triangle and it's meaning - understand using HALHow to identify an Ascending Triangle on chart and what does it mean? Let’s understand this with current chart of NSE:HAL (dated 21-Aug-2023). • Ascending Triangle is a bullish formation that generally gets formed during the uptrend and confirms the continuation of uptrend. • Ascending Triangle pattern indicates the accumulation and gives bullish buy indication before breakout. • NSE:HAL during its uptrend journey created break out from its uptrend channel on 7-Jun-2023. • However, post that it has gone sideways and started forming an Ascending Triangle. • Ascending triangle is created when price consolidates in the uptrend direction for some time by facing resistance at same level on the upper side of the triangle. Whereas the bottoms keep increasing. • Volume starts getting decreasing from the starting point of the triangle. • At one point, we will get Break Out from triangle with huge volume and uptrend will continue.
NSE:HALEducation
by vicky252
How To Trade In Option's By Big Bulls🤑💸✔✔💲🙏#HDFCBANK #BANKNIFTY #NIFTY50 #NIFTY #SENSEX #TATA Intraday trading involves buying and selling options within the same trading day, rather than holding them for an extended period. By adopting this approach, traders can make profits by capitalizing on the short-term price movements of the underlying asset.22-Apr-2023 Is option buying good for intraday? Trading intraday options can be a great way to benefit from short-term market fluctuations and make quick money. Before you dive headfirst into the fast-paced world of intraday options, it's important to have a sound strategy with an understanding of risks and rewards. The long black candlestick is 'the mother' and the small candlestick is 'the baby'. The smaller the second candlestick, the stronger is the reversal signal. The shadows of the second candlestick do not have to be contained within the first candle's body. Which candle is best for option trading? Here are the top 5 candlestick patterns that traders must know: Doji. The Doji pattern is formed when the Open Price and Close Prices are the same or almost the same, and there is Low and High Price, so the candle has nearly nobody with a lower and upper wick. ... Hanging Man. ... Hammer. ... Morning Star and Evening Star. Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. RBI Forex Reserve Grow is this Good or Bad ? 1st 140 Billion loss hua hai or ab 20 Billion Grow hua hai to hai to abi bhi loss mai Gover..t abi losss mai hai
NSE:NIFTYEducation
by ISL-TREND
7
Symmetrical Triangle Example using Adani EnterpriseNSE:ADANIENT has created a symmetrical triangle on the chart. Most of the time symmetrical triangle is created when stock is moving side ways (neither moving in up trend nor in down trend). Stock can move to any direction once it comes out of triangle hence it requires caution before placing trade. If stock breaks out (on upper side) than we may see up trend from that point. If stock breaks down (on lower side) than we may see down trend from that point.
NSE:ADANIENTEducation
by vicky252
U.S. Dollar Index (DXY)The US Dollar Index (also known as DXY or USDX) measures the value of the US dollar against a basket of foreign currencies. Therefore, it provides us with an insight into whether the dollar is strengthening or weakening compared to other major currencies. This index has a positive correlation with currency pairs where the dollar is the base currency. Conversely, there is an inverse correlation. The DXY or USDX measures the exchange rate of the US dollar against 6 currencies. The currency with the most weight in its composition is the euro. It is a key indicator in analyzing the value of the dollar to determine its trend. Additionally, it can be used to study the global macroeconomic situation, as well as to gauge the level of economic and financial uncertainty at a particular moment. (🇮🇳)
TVC:DXYEducation
by JRiquelmeTrading
Freedom From Trading MistakesHi Friends Good evening hope all are you fine, So first of all Wishing all of you a very Happy Independence Day, here I am doing a short writeup on Trading related mistakes very commonly did by me or a common trader on the occasion of Independence day from whom I want to be free now! So always I wondering that why I or common traders could not make it and after deep thinking on trading methods and trading psychology I found some mistakes from what I want to get rid of now sharing below. ⚡⚡⚡⚡ Don’t trade if your emotions aren’t aligning with what is on the screen. If we are not super happy about entering, and you don’t fully accept the loss, don’t take the trade and Don’t ‘force’ something to work because it won’t. Trade as if you are looking for buys and sells in your markup, This removes mental bias, and effectively emotion in trading. ⚡⚡⚡⚡ We focused too much on technical analysis. You know that trading is 90% psychology, 10% technical, yet you don't focus on it. Why is psychology so important, but people focus on technical analysis so much more? Because backtesting and focusing on the technical provide us with instant gratification. It feels good knowing what returns you would have gotten on that trade, over the past weeks, months, or even years. It's feels good to instantly know what you will get out of your backtesting session. ⚡ ⚡ ⚡ ⚡ Never chase missed entries. Let’s say the market is in a nice healthy trend, making a series of higher highs and higher lows. And when you overlay the 20-day moving average over it, you notice the market bounce off the moving average quite a few times. You then get a buy signal near the moving average, but unfortunately, you missed the entry and are just watching the market go up without making any money from it. Now, when you look at the chart, the market is very far away from the 20-day moving average. So even though the market is currently in an uptrend, ideally you don’t want to be buying now because, from looking at your analysis, the market tends to pull back to the 20-day moving average. If you impulsively buy when the price is very far away from the 20-day moving average, when the price is overstretched and the market has been overbought, there’s a high probability the market will reverse or pullback, and you will most likely get stopped out. We all miss entries and opportunities; it is completely normal to do so, and sometimes the market can give you a second chance to enter by coming back to your original level. If it does not and you completely miss the move, do not dwell on it; dust it off and move on. The markets are not going anywhere, and plenty more opportunities will come your way. ⚡⚡⚡⚡Overtrading To avoid overtrading just we have to create a well Defined trading plan with setting the daily or weekly trade limits, so if you are observing that you are doing overtrading or compulsory trading just take a break make some strict rules and try to comeback with a committed risk management plan. ⚡⚡⚡⚡Respect your losses Don't try to argue with market if your trades are going in wrong direction always respect your stop loss and understand that is the most important part of your trade from which you can avoid the vanish of capital and trade capabilities because small losses always prevent from big losses to us. And somehow you should follow your targets too like a disciplined trader likewise if you are trading with 1:2 RR and after two consecutive stop loss if you will sit till target you will get back to your capital almost so never try to come out early believe your trading system. Key Takeaway-: Trading system is also like our health system which needs a checkup after sometime so that we can know the problems in time and get Freedom from it. Best Regards- Amit Rajan Happy Independence Day 2023 Jai Hind Jai Bharat
NSE:NIFTYEducation
by AMIT-RAJAN
8
Head and ShoulderDistinct and clear patterns are usually good for learning price action. Current H&S formed in bank nifty ticks all checkboxes. 1. It is formed after reasonable up trend. 2. Pattern appears clean. 3. Target is reaching a logical level of 200dma 4. Most of positive news are gone by and interest rate reduction is still 2~3 quarters delayed. This may not be total trend reversal but around 4% downside is possible. While such move may not be useful for swing traders, it can create good buying opportunity in your favorite banking stock.
NSE:BANKNIFTYEducation
by yndesai
Importance of Chart PatternsFor those looking to master the stock market, understanding chart patterns is essential. And if you have reached a point where you are out of trading ideas or stuck in a traders’ block, this article is just for you. Chart patterns are formed by the movement of prices over time, and these can be of two types: Continuous patterns which indicate that price movement will continue in the direction of the trend and Reversal patterns which indicate a potential change in the direction of the trend.  There is no universal pattern which can help you in every situation. Hence, it is important to know what each pattern indicates and how you can spot them in a price movement. In a series of these articles we will talk about all such important patterns that a trader must know about. In this article, we look at Head and Shoulders The head and shoulders pattern is a reliable reversal pattern that forms after an uptrend. The pattern is named for its resemblance to a head and two shoulders. The left and right shoulders are typically at or near the same price level, and the head is higher. When the price breaks below the neckline, it signals a bearish reversal. Look out for the following sequence: Left shoulder: A price rise followed by a peak, followed by a decline. Head: A price rise again forming a higher peak than the previous one. Right shoulder: A decline of price again, followed by a rise to form the right peak, which is lower than the head. For example : take a look at the chart pattern for TCS to understand how price movement took place from the month of August 2019 to February 2020 forming three peaks, in the sequence we just discussed.
NSE:TCSEducation
by PaytmMoney
2
Anchored vwap in day trading...All the anchored vwaps are dynamic support and resitance. There is no need to draw support resistabnce zones. But do not take any trade blindly. Please combine anchored vwap lables with price action. For more confirmation you can use intraday vwap indicator with three standard deviations. Or you can add order flow analysis also. According to my observation market is imbalance in between 19755.65 to 19736.1 . For day trading you can use 1 minute timeframe chart also.
NSE:NIFTY1!Education
by Subhrajit006
2
Support and Resistance- Flipping Roles⚡In simple terms, support is a level where demand overcomes supply, while resistance is a level where supply overcomes demand. In the market, different types of traders participate, and I have broadly categorized them into four groups based on their behavior. ⚡You may have heard that once a support level is broken, it tends to act as a resistance level, and vice versa. This phenomenon occurs because the roles of support and resistance flip, influenced by the psychology of traders at these levels. ⚡Let's illustrate this with an example. Consider Group A, a set of buyers who bought a stock at 80. The stock price rises to 100 but faces some resistance. At this point, Group B, consisting of short sellers, enters the market and starts selling the stock near 100, with their stop-loss orders placed just above 100. Thus there is supply present at this level. ⚡The price consolidates within a narrow range and eventually breaks out above 100. Group A is delighted as they bought at a good price, but Group B becomes unhappy. Some members of Group B exit the trade as their stop-loss orders get triggered, while others continue to hold in hope of a favorable outcome. ⚡Now, another group of traders, Group C, known as breakout traders, becomes active above 100. Their buy orders, combined with the buy-stop orders from Group B, add momentum to the upward movement, pushing the price up to 110. ⚡As the buying pressure eases, and short-term traders take profits, the market starts to pull back, eventually reaching the old resistance area around 100. ⚡Many pullback traders look for buying opportunities near this level. Additionally, members of Group B, who shorted at 100, realize their mistake and start buying to close their short positions at breakeven. Some of them also reverse their positions. Other buyers who were waiting on the sidelines also start entering the market. All these buy orders create a strong demand. ⚡Notice that once there was significant supply at 100 and now there is significant demand. If this demand is substantial enough, the price resumes its upward movement, illustrating how changes in market sentiment impact a participant's psychology and consequently affect the nature of support and resistance levels. ⚡The reverse is true for how a support level, once broken down, turns into a resistance level. ⚡I hope you found this tutorial helpful. Please stay tuned for more educational content in the future. Feel free to show your support by liking this post. Disclaimer: Practical knowledge
NSE:NIFTYEducation
by Bravetotrade
15
Chart pattern: ChannelA channel is a pattern used in the technical analysis of financial markets that defines the movement of the price of an asset between the upper and lower lines of the pattern (parallel lines). Channels can be bullish, bearish, or sideways. They are reversal patterns, meaning they indicate a signal for a change in trend. When it comes to trading them, there are different ways to do so. We can trade within the channel, aiming for the opposite end of the line we are situated on. Alternatively, we can trade the trend change. The trend change can be traded once the channel is broken, either within it or by waiting for the price to break the pattern. This latter option is riskier, but it can lead to greater profits as the trading begins at a point with a higher projected movement. (🇮🇳)
NASDAQ:AAPLEducation
by JRiquelmeTrading
7 Expert Risk Management Techniques for TradingRisk management refers to the techniques used to identify, evaluate, and mitigate the potential risks associated with trading and investing. Whether you are a day trader, swing trader, or scalper, effective risk management can help you minimize losses and protect your hard-earned money all while maximizing potential profits. Let's take a look at the top 7 risk management techniques for trading! 👌 Have a Trading Plan ⦿ Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. You should have a detailed trading plan in place before making any trades. A well-designed trading plan is an essential tool for effective risk management. ⦿ A trading plan acts as a roadmap, laying out a set of guidelines/rules that can help traders avoid impulsive decisions. It is crucial because it requires you to think deeply about your approach before you begin risking real money. Having a plan can help you stay calm under stress as your plan will have specific steps to take for anything the market throws at you. ⦿ It is essential to clearly define your trading goals and objectives. Are you aiming for short-term gains or long-term wealth generation? Are you focused on a specific asset class or trading strategy? Setting specific and measurable goals helps you stay focused and evaluate your progress. ⦿ Another important part is to describe the trading strategy you will employ to enter and exit trades. This includes the types of analysis you will employ (technical, fundamental, or a combination), indicators or patterns you will rely on, and any specific rules for trade execution. Determine your risk tolerance, set appropriate position sizing rules, and establish stop-loss levels to limit potential losses. The Risk/reward ratio ⦿ When you are planning to open a trade, you should analyze beforehand how much money you are risking in that particular trade and what the expected positive outcome is. Here is a useful chart with some examples to understand this concept: ⦿ As you can see from the data above, a trader with a higher RR (risk-reward ratio) and a low win rate can still be profitable. ⦿ Let’s examine this a little more by looking at a profitable example with a 20% success rate, a RR ratio of 1:5, and a capital of $500. In this example, you would have 1 winning trade with a profit of $500. The losses on the other 4 trades would be a total of $400. So the profit would be $100. ⦿ An unprofitable RR ratio would be to risk, for example, $500 with a success rate of 20% and a risk/reward ratio of 1:1. That is, only 1 out of 5 trades would be successful. So you would make $100 in 1 winning trade but in the other 4, you would have lost a total of -$400. ⦿ As a trader, you need to find the perfect balance between how much money you’re willing to risk, the profits you’ll attempt to make, and the losses you’ll accept. This is not an easy task, but it is the foundation of risk management and the Long & Short Position Tools are essential. You can use our 'Long Position' and 'Short Position' drawing tools in the Forecasting and measurement tools to determine this ratio. Stop Loss/Take Profit orders ⦿ Stop Loss and Take Profit work differently depending on whether you are a day trader, swing trader, or long-term trader and the type of asset. ⦿ The most important thing is not to deviate from your strategy as long as you have a good trading strategy. For example, one of the biggest mistakes here is to change your stop loss thinking that the losses will recover... and often they never do. ⦿ The same thing happens with take profits, you may see that the asset is "going to the moon" and you decide to modify your take profit, but the thing about markets is that there are moments of overvaluation and then the price moves sharply against the last trend. ⦿ There is an alternative strategy to this, which is to use exit partials, that is closing half of your position in order to reduce the risk of your losses, or to take some profits during an outstanding run. Also remember that each asset has a different volatility, so while a stop loss of -3% is normal for a swing trading move in one asset, in other more volatile assets the stop loss would be -10%. You do not want to get caught in the middle of a regular price movement. ⦿ Finally, you can use a trailing stop, which essentially secures some profits while still having the potential to capture better performance. Trade with TP, SL, and Trailing Stop Selection of Assets and Time intervals ⦿ Choosing the right assets involves careful consideration of various factors such as accessibility, liquidity, volatility, correlation, and your preference in terms of time zones and expertise. Each asset possesses distinct characteristics and behaviors, and understanding these nuances is vital. It is essential to conduct thorough research and analysis to identify assets that align with your trading strategy and risk appetite. ⦿ Equally important is selecting the appropriate time intervals for your trading. Time intervals refer to the duration of your trades, which can span from short-term intraday trades to long-term investments. Each time interval has its own advantages and disadvantages, depending on your trading style and objectives. ⦿ Shorter time intervals, such as minutes or hours, are often associated with more frequent trades and higher volatility. Traders who prefer these intervals are typically looking to capitalize on short-term price fluctuations and execute quick trades. Conversely, longer time intervals, such as days, weeks, or months, prove more suitable for investors and swing traders aiming to capture broader market trends and significant price movements. ⦿ Take into account factors such as your time availability for trading, risk tolerance, and preferred analysis methods. Technical traders often utilize shorter time intervals, focusing on charts, indicators, and patterns, while fundamental investors may opt for longer intervals to account for macroeconomic trends and company fundamentals. For example, If you are a swing trader with a low knack for volatility, then you can trade in assets such as stocks or Gold and ditch highly volatile assets such as crypto. ⦿ Remember that there is no one-size-fits-all approach, and your choices should align with your trading style, goals, and risk management strategy. Here is a chart of Tesla from the perspective of a day trader, a swing trader, and an investor: Backtesting ⦿ Backtesting plays a crucial role in risk management by enabling traders to assess the effectiveness of their trading strategies using historical market data. It involves the application of predefined rules and indicators to past price data, allowing traders to simulate how their trading strategies would have performed in the past. ⦿ During the backtesting process, traders analyze various performance metrics of their strategies, such as profitability, risk-adjusted returns, drawdowns, and win rates. This analysis helps identify the strengths and weaknesses of the strategies, allowing traders to refine them and make necessary adjustments based on the insights gained from the backtesting results. ⦿ The primary objective of backtesting is to evaluate the profitability and feasibility of a trading strategy before implementing it in live market conditions. By utilizing historical data, traders can gain valuable insights into the potential risks and rewards associated with their strategies, enabling them to manage their risk accordingly. ⦿ However, it's important to note the limitations of backtesting. While historical data provides valuable information, it cannot guarantee future performance, as market conditions are subject to change. Market dynamics, liquidity, and unforeseen events can significantly impact the actual performance of a strategy. ⦿ There are plenty of ways to backtest a strategy. You can run a manual test using Bar Replay to trade historical market events or Paper Trading to trade real examples. Those with coding skills can create a strategy using Pine Script and run automated tests on TradingView. Here is an example of the Moving Averages Crossover strategy using Pine Script: Margin allocation We are not fortune tellers, so we cannot predict how assets will be affected by sudden major events. If the worst happens to us and we have all of our capital in a particular trade, the game is over. There are classic rules such as the maximum allocation percentage of 1% per trade (e.g. in a $20,000 portfolio this means that it cannot be risked +$200 per trade). This can vary depending on your trading strategy, but it will definitely help you manage the risk in your portfolio. Diversification and hedging ⦿ It is very important not to put all your eggs in one basket. Something you learn over the years in the financial markets is that the unexpected can always happen. Yes, you can make +1000% in one particular trade, but then you can lose everything in the next trade. ⦿ One way to avoid the cold sweats of panic is to diversify and hedge. Some stock traders buy commodities that are negatively correlated with stocks, others have a portfolio of +30 stocks from different sectors with bonds and hedge their stocks during downtrends, and others buy an ETF of the S&P 500 and the top 10 market cap cryptos. ⦿ There are unlimited possible combinations when diversifying your portfolio. At the end of the day, the most important thing to understand is that you need to protect your capital, and using the assets available to you a trader can hedge and/or diversify to avoid letting one trade ruin an entire portfolio. Thank you for reading this idea on risk management! We hope it helps new traders plan and prepare for the long run. If you're an expert trader, we hope this was a reminder about the basics. Join the conversation and leave your comments below with your favorite risk management technique! 🙌 - TradingView Team Be sure to follow us on Instagram , YouTube , and Telegram for more valuable content! 💘
Editors' picks
Education
by TradingView
10
What makes a Resistance Potential OneResistance and support are faces of a same coin the concept is same , if price reverses its direction after getting closer to a particular level or zone we call it resistance or support level or zone. When you start learning about it more you will find that it is the most basic approach to analyze a price action, then you mix it up with trend line which is again nothing but a tilted support and resistances, concept is same. Trading such levels & zone require an approach where you can benefit maximum from the upcoming move and the trade you take should have the potential to give you a good risk to reward ratio. If you see, resistance and support are everyday happenings , they occurs so much times that taking a bet on every setup will make our trading random ,so filtering those blurry , OK-ok, less potential setup is very very important . --------------------- Here I am giving you some of my observation over filtering such setups. First do not try to make support and resistance everywhere , try to avoid making inside a range , can only make such resistances and support if they form on a large time frame or over a long period. This will filter out your 40% setups. Second Let the support and resistance test 3 or more touches , when price behaves in an ideal way more than three times the level or zone become very crucial and price can tend to give you a big and sharp rally (see the direction still can be any side as it is not always breakdown it can also be a big reversal). Third See the overall trend and recent price pattern , better if the setup is in order to the overall trend, reversals should also be in sync with overall trend as in this USD/INR chart the overall trend is bullish & the pattern is a bullish flag which is again a bullish one. Fourth Volume formation when price reaches to a support or resistance if a spike in volume is there then you can say a big players is also betting on those levels or zones in big quantity (note : they betting in which direction you can't guess like that). You can take entry at breakout and make your stop loss at the support simple....
Education
by TRADEWITHFUN247
Option Buying In Intraday By Big BULL🤑#We Make Only Profit. #HDFCBANK #BANKNIFTY #NIFTY50 #NIFTY #SENSEX #TATA Intraday trading involves buying and selling options within the same trading day, rather than holding them for an extended period. By adopting this approach, traders can make profits by capitalizing on the short-term price movements of the underlying asset.22-Apr-2023 Is option buying good for intraday? Trading intraday options can be a great way to benefit from short-term market fluctuations and make quick money. Before you dive headfirst into the fast-paced world of intraday options, it's important to have a sound strategy with an understanding of risks and rewards. The long black candlestick is 'the mother' and the small candlestick is 'the baby'. The smaller the second candlestick, the stronger is the reversal signal. The shadows of the second candlestick do not have to be contained within the first candle's body. Which candle is best for option trading? Here are the top 5 candlestick patterns that traders must know: Doji. The Doji pattern is formed when the Open Price and Close Prices are the same or almost the same, and there is Low and High Price, so the candle has nearly nobody with a lower and upper wick. ... Hanging Man. ... Hammer. ... Morning Star and Evening Star. Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. RBI Forex Reserve Grow is this Good or Bad ? 1st 140 Billion loss hua hai or ab 20 Billion Grow hua hai to hai to abi bhi loss mai Gover..t abi losss mai hai
NSE:BANKNIFTYEducation
by ISL-TREND
Everyday Of The Week Is An Expiry Day | Impact Of 0 DTE Options After the latest circular from NSE, MidCPSelect Nifty which tracks a handpicked 25 stocks will have expiry date shifted from Wednesdays to Mondays. And BankNifty which tracks the top most banks in India will have expiries on Wednesdays instead of Thursdays. This change in status-quo has created a situation wherein we have a daily expiry. Much similar to the 0 DTE (zero day to expiry) by CBOE in the US. Many economists have published whitepapers on how this could impact the options trading industry, speculations, index movements. But we still have no clarity on how the future will unfold. You might already know how “options” as a financial instrument is a double edged sword due to the leverage it provides. Let me try to voice my version of what will happen! Stock markets have already caught the attention of the wanna be rich guys. Although options trading is a newer concept, stock market & betting has been here for more than 100 years. People generally buy stocks in the anticipation that they could sell it back at a higher cost and thereby profiting. Most often these buys are not because they like the underlying company or have done the research of the firm but just to get rich quick. Options trading is the next level of betting from stock trading. Options instruments CALL & PUTS give the ability of the buyer to handle a higher number of shares of the firm for a fraction of the total cost (for a limited time). That limited time is the catch here. Every option instrument will expire on a predetermined date called expiry day. Whereas the stocks have no expiry dates. What this means is that if you have purchased CALL OPTIONS you expect the stock to move up real quick before the expiry, if it doesn’t you lose the premium paid. Whereas in stocks you have the privilege to hold the shares as long as you like. The reason options were introduced was to hedge the owner of the shares against its short term fluctuations. For eg: If I own 100 shares of XYZ and I wish to hold this for the next 10 years, but a recent report says XYZ company has lost one of its licenses & the shares could tank. What I could do is buy PUT options of the firm so that my downside is protected for the short term. When I decide to buy the PUT options someone has to take the counter position. It could be the market maker or a speculator. The market maker, if he decides to sell that PUT option to me, has a net long exposure, which means he makes money only if the stocks stay as they are or move up. Technically no market maker likes to have a directional exposure, so he will immediately take another few trades to become delta neutral. Or it could be a speculator who is just there to make money. This guy may not have a stock holding against the position he has taken. Most likely this person has the belief that stock XYZ is moving up. Stocks still have a monthly expiry, which gives ample time for the buyer/seller of the option instrument to change or modify their long/short exposure according to the price action/news flow. Whereas Indices are now set with weekly & monthly expiries. Earlier both Nifty50 and BankNifty expired on the same day ~ Thursday. So the speculation was either mostly on that one day or via overnight positions built up towards the expiry. With the new changes 6 separate indices are set to expire on separate days of the week, which means a speculator has the opportunity to gamble into a long or short exposure every single day of the week. We now know the speculator is only interested in making money provided his views/research is accurate. Honestly I still dont believe any retail trader is a match for the institutions with their supercomputers, mathematical modeling or the kind of talent they attract. So if someone has to lose money in this process, it has to be the lowest hanging fruit. Since there are daily expiries, the retail trader is enticed into an opportunity to make easy money. The good thing is that overnight is not there, but this trader has to be knowledgeable enough on what he is getting into. Both the size & count of betting will increase & its going to be a harvest for the Government, Brokers & Professional Traders. After a while it is going to be like any gambling sport or a lottery business. Market makers will be glad to offer a wider bid/ask spread and profit, usually the end trader is not aware of this slippage. Since the volume of trades are going to explode, there is a risk of risk-oversight. Let me try to explain. Case1: Markets prefer to stay range bound — this is the best case for all the participants. Most often the day ends just like the day begins & there are no hefty options adjustments, roll up or roll down. The premiums in the strikes will be normal (usually low) Since the swings are normal, option strikes do not create unwanted build up of open interest (volumes will be as usual) This scenario is safe for all the participants even though there is an equal amount of money to be won or lost. Case2: If the markets start to pick a direction — it is going to have a spiraling effect which cannot be quantified by any mathematical modeling If the markets are moving against a net sell position, the trader will start covering to reduce loss. This will create a spike in open interest of that strike & nearby strikes. Once the volumes begin to spike, more speculators will jump in creating premium mispricing. When the option premium mis-pricing exists, arbitrageurs will enter the game. Market makers will be glad to write options & counter balance it by going long or short in the underlying. This algo or HFT will further escalate the directional move. This 2nd category will create a self perpetuating trap if left unchecked. The high frequency traders are usually computerized and do not stop if they see the directional movement picking up speed. These machines feed on this distress & usually suck the soul out of the retail traders. Well it’s not a fault, but the machines are engineered that way. The indices would fall or rise for no real reason and could wipe out a select portion of traders due to their unlimited loss options exposure. And the next day this index could revert to normal as this fall/rise was just due to speculation & nothing to do with fundamentals. A black monday or a flash crash could be normal and more frequent. And there are 2 instances where this could even translate into deeper wounds. The same component stocks, almost in the same weightage are participating in adjacent expiries. FinNifty on Tuesdays & BankNifty on Wednesdays Nifty50 on Thursdays & Sensex on Fridays. So if we had a big movement on a Tuesday, it could even set the stage for further acceleration on Wednesday as the same underlying component stocks were impacted. Having said all these, I am sure there would be many think tanks who would have thought through all these & implemented some safety nets to protect the vulnerable subset of people. If the case1 scenario plays out it should be a hunting ground even for a commoner like you & me to make some money!
NSE:NIFTYEducation
by viswaram
Firefighting a Short Iron Condor Strategy on Nifty50 on Expiry DThis is a strategy you use when you feel the markets will not rise or fall below a predetermined level within the upcoming week. Approx 9 out of 10 times markets remain range bound and the other single time it breaks out or breaks down. This strategy is when you have a feeling that markets will remain range bound and will not break out or break down. We will be using Sensibull to analyze each of the strategies. If you have a zerodha demat account — their strategy builder tool is 100% free. We have created a short iron condor by placing a 4 legged option strategy. We have used the Nifty50 index that has a weekly expiry on 03 Aug 2023. The split up of the legs are · Buy 19350 PE for 13.65 · Sell 19500 PE for 37 · Sell 19800 CE for 39 · Buy 19950 CE for 13 Today is 28th July Friday and we have 4 more days to expiry ie. Monday 31st Jul, Tuesday 1st Aug, Wednesday 2nd Aug and Thursday 3rd Aug. The maximum profit you can get out of this trade is Rs2468 and the max loss is Rs5033. When you hold this trade till expiry, you can be 100% sure that your losses will never exceed Rs5033 — that is the first guarantee you can count on for fixed loss strategies. You will benefit if Nifty50 ends between 19451 and 19849 on 03 Aug 2023. Current price of Nifty50 is 19646. Which means we have 19646–19451 = 195pts protection downside and 19849–19646 = 203pts protection upside. To take this trade the capital required is Rs47194 which can be funded via cash in ledger or pledging Gsecs or GOI bonds. Mutual funds, stocks and ETF could be pledged as well, but brokers require 50% of all funds to come from cash or cash equivalent holdings. Firefighting Strategies on Iron Condor This is where the topic gets interesting. You are already aware by now that the max loss you need to defend is Rs5033 over the next 4 days but most importantly on 03 Aug expiry day. When to Fire fight? Firefighting is really required only if Nifty falls below 19451 or surge pasts 19849. Even if daily swings of this magnitude happens, its quite common for Nifty50 to revert to mean. So our firefighting strategies can be deployed for a short duration of few minutes or intraday. All the firefighting strategies has to deployed on EXPIRY DAY only i.e. every Thursday. I do not suggest or recommend to do it on any other day as the risks of not closing a fire-fighting trade may cause your capital to get wiped out. High Risk Firefighting The firefighting strategies require naked option buying or selling so its best recommended that you do it after studying the risks associated. Most importantly these tactics has to be done within the day and should not be taken overnight which may otherwise wipe out your capital. Most importantly these tactics has to be done within the day and should not be taken overnight which may otherwise wipe out your capital. I have intentionally repeated that sentence with bold so that it gets your undivided attention. How to Firefight? There are only 2 loss making possibilities here 1. Nifty50 is above our upper breakeven of 19849 2. Nifty50 is below our lower breakeven of 19451 Let us assume that Nifty is trading at 19400 now which means it is below our lower breakeven as per (2). From here Nifty50 has only 3 possibilities on 03 Aug Expiry Day a) Stays below 19451 b) Climbs back above 19451 but not cross 19849 c) Goes above 19849 Conditions (a) & © is unfavorable for us, whereas condition (b) is an ideal case for us. If condition (a) i.e. Nifty Stays below 19451 happens we have the freedom to sell CALL options above 20000 all the way till 21500 intraday. Image below shows the option chain of Nifty50 and the strikes highlighted in red are CALL options above 20000. If we select to short sell any of these strikes — there are only 2 possibilities that could happen 1. Nifty will scale back up the lower breakeven of 19459 — then these CALL options will appreciate in value and we will incur a loss if we hang on. The idea is that we got Nifty50 back above our lower breakeven so that it profits us — so it makes sense to exit the firefighting position. 2. Nifty closes below 19459 which means the CALL options we sold becomes worthless (ie goes to 0) and we pocket all the premiums paid Reiterating again that the firefighting has to be done only on expiry day where you have 100% visibility that the OTM CALL options are going to zero. On any day Nifty50 could make even a 0.5% move and drive up the options premium so high that you end up losing more. Similarly if Nifty50 is above 19849 we need to short sell PUTS below 19300 and grab those premiums to offset the max loss of Rs5033. How much premiums you should grab? The idea here is not to use the option selling strategy for income rather to cover your max loss. The max profits you can target should match the max losses you will hit in the original strategy. Also do not be adamant that you need to recover 100% of the losses, even if you are able to reclaim only 50% — it’s still a WIN. When to Exit the Short Selling Position? As soon as Nifty is back in the favorable range, we should prioritize exiting the short selling position as the fire is doused. If you hang on to the short selling position anymore — you may get barbequed/incinerated.
NSE:NIFTYEducation
by viswaram
Candlestick pattern: 1 Hour RetraceThe 1 Hour Retrace pattern is a candlestick formation with great potential for success and strength. This pattern originates after a false breakout of the level in which the price is contained, for example, in a channel. The beginning of this pattern occurs when one of the candles breaks outside the levels that contain the price and, subsequently, the next candle forcefully returns inside the pattern, closing within it. This indicates a false breakout and that the new price direction was incorrect. The stronger the candle on the return, the higher the probability that the price will swing back to the previous levels before the false breakout.
BITSTAMP:ETHUSDEducation
by JRiquelmeTrading
Candlestick pattern: Bullish Triple FormationThe 'Bullish Triple Formation' is a pattern in which two large bullish candles appear, separated by three small bearish candles. These three bearish candles make new lows and are contained within the body of the first large bullish candle. This pattern occurs in an uptrend and is interpreted as a correction of the trend after an upward impulse, indicating a potential continuation of the bullish movement thereafter. It's important to note that this pattern may have variations, as instead of three candles correcting the first large bullish candle, there can be two or more than three. The reliability of this pattern is high; however, it is still a single signal that should be accompanied by others to increase the probability of success in our analysis.
NASDAQ:TSLAEducation
by JRiquelmeTrading
Metrics: Expected Value (EV)Expected Value (EV) is a statistical concept that indicates whether our trading system or strategy will yield positive, negative, or neutral results in the medium or long term. It is based on previous results. As we know, past performance does not guarantee future results, but it helps us get an idea of how it might work and allows us to base our decisions on objective terms. The formula for calculating Expected Value (EV) is as follows: Expected Value (EV) = (Win Rate * Average Win) - (Loss Rate * Average Loss) When interpreting the result, it indicates whether you will gain or lose in the medium or long term per unit of currency at risk. An example: A trader achieves an expected value of 0.5 with their trading operations. This means that every time they risk 1€ in the market, they gain 0.5€ in profit.
BITSTAMP:BTCUSDEducation
by JRiquelmeTrading
Candlestick pattern: Confirmed HammerA Hammer candlestick is a single-candle reversal pattern that indicates a potential change in the trend direction. These candles are typically characterized by a high or low that is significantly distant from the closing price, with the shadow being at least twice the size of the body. Like any candlestick pattern or analysis tool, its reliability increases with the presence of more confluences or signals. Therefore, in this case, we choose to trade this pattern when the confirmation criteria are met. However, in practice, there may be other factors to consider that could influence the decision to enter or not enter a trade. Additionally, there is another type of confirmation for this pattern. The most secure confirmation (but with less projection) would be to wait for the candle following the Hammer to close above it (in the case of a reversal to the upside). This would indicate that the rejection of continuing the current trend is genuine and that a change in direction is more likely.
PEPPERSTONE:CRYPTO30Education
by JRiquelmeTrading
Option's Trading With CandleStick Pattern's🤑💲💰💸❤#We Make Only Profit. #HDFCBANK #BANKNIFTY #NIFTY50 #NIFTY #SENSEX #TATA The long black candlestick is 'the mother' and the small candlestick is 'the baby'. The smaller the second candlestick, the stronger is the reversal signal. The shadows of the second candlestick do not have to be contained within the first candle's body. Which candle is best for option trading? Here are the top 5 candlestick patterns that traders must know: Doji. The Doji pattern is formed when the Open Price and Close Prices are the same or almost the same, and there is Low and High Price, so the candle has nearly nobody with a lower and upper wick. ... Hanging Man. ... Hammer. ... Morning Star and Evening Star. Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. RBI Forex Reserve Grow is this Good or Bad ? 1st 140 Billion loss hua hai or ab 20 Billion Grow hua hai to hai to abi bhi loss mai Gover..t abi losss mai hai
NSE:BANKNIFTYEducation
by ISL-TREND
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