Real-Time EICHERMOT with deep study of Triangle variety.What's the difference between a running triangle and, contracting triangle?
Trick is very simple. The wave "B" is beyond the origin of wave "A" we have diagram in a chart.
Respect to the triangle a few things to remember.
1) they can only form by themselves in wave "4" , wave "B" , wave "X" and rarely wave "2" . That being the case, triangles always proceed the final move within a sequence.
2) The final move of the triangle which is referred to as a triangle thrust that is either typically small or very large. Rarely is there a medium type move.
3) If you're very aggressive and you want to try and capture the final move. Okay, because that would give you maximum profit potential in this. That's not my training trading style because it is aggressive. When you do this, most people have a tendency to want to put a protective stop at the extreme at wave "C" but I do not recommend that, Actually recommend putting the stop at the extreme of wave "A".
Now you know, with respect to the wave principle, there's two types of wave form survey modalities, Motive waves and Corrective waves. Now with within the corrective wave family are specifically, we have zigzags, flats and triangles. We're going to be examining Triangles. And within the triangle family there's actually 3 subsets or three types of triangles:
1) Contracting triangle,
2) Barrier triangle and,
3) Expanding triangle
Now, any kind or types of Triangle, and its easily to identify because the trend lines. Connect line the extreme of waves "A" and "C" coverage & "B" and "D" coverage with trend-line. There's very minor variation the the Contracting Triangle and Running Triangle. For Running Triangle wave "B" exceed the origin point of wave "A" .
Next is Barrier Triangle and its forming rare or less and its easy to identify because of one trend-line which connect actually a Horizontal and another connecting trend-line will slop in the direction of larger trend.
Last type of triangle we're going to examine is going to be an Expanding Triangle. In this triangle is actually very very rare. This only this type of a triangle forms only 10% of the time or less than. The most distinguishing characteristic of the expanding triangle is that true lines which connect the extremes of wave A and C & B and D coverage is actually expand.
This is EICHERMOTOR weekly price chart, Scenario 1 which is under-construction for Symmetrical Triangle. The contracting for wave (B) of wave B. Here, the probability of wave ((D)) as complex.
We've been learning a lot about triangles and it is actually one of three corrective wave patterns , zigzag, flat and triangles family. There is actually 3 different types of triangles we have contracting triangle., barrier triangle and expanding triangle. Now a variation of the contracting triangle that we examine was also referred to as a running triangle. We've learned that triangles me only form by themselves in the wave "4", wave "B" and wave "X" positions in that triangles always follow or proceed. Excuse me to proceed the final move within a sequence. Sometimes the move The thrust following a triangle is very small. Sometimes it's very very big, so this is.
Now we're actually gonna do today is actually apply what we've learned about triangles to some relevant or a timely markets. The EICHERMOTOR chart is one right here. Whenever I look at triangle pattern characteristics which is covering trend-line. The wave ((b)) is not beyond the origin of wave ((a)) that why this is not "Running Triangle" but its a "Contracting Triangle".
Thrust Measurement Technique :
The simply taking the widest portion( horizontal green dash line ) of the triangle and measuring it in this instance upward from the extreme of wave ((d)) which is 3300 +. The wave ((d)) is very strong evidence whenever price cross about it and the wave ((e)) can be little exceed wave ((c)) or it can complete under the wave ((a)) and ((c)) connected trend-line. Personally I recommended protective stop at or below extreme wave ((a)) .
Daily price chart for closer look:
Trend-lines observation for turning point:
Fib. ratio of all sub-waves:
Thanks.
Community ideas
How to use "Channel Tool" on the Price Chart and its technique?On the price chart can be draw in parallel lines. For example, prices come right in front of you. If this is accurate and if I call the channel of the true value you draw. No, see if it is contained by parallel lines.
It is a reasonable price, the price of the action counter train is contained by the action parallel mind, so if the price action is not contained by the parallel lines by default.
For example, let's look at an impulsive structure. Here we have Waves 12345, just an excellent Elliot Wave Impulse move. Now let's look at it from the channeling technique.
The first thing we want to do Pull back when I call the "Base channel" and it will be this channel here. We start from the origin of wave 1 to the extreme of wave 2 and then take it to parallel to the extreme line of wave 1. The move at this point. We now believe in clarity that we are rallying in the third wave step.
Next channel. Whenever there is a lower boundary line on acceleration for the importance of acceleration channel I will call the "Acceleration Channel" which you draw from the extreme of wave 3 to the extreme of wave 3. The channel entered into its signals and confirmed that there were the wave 3 is complete. And, the wave 4 is under way.
At that point, we draw a "Deceleration Channel" that defines the parameter of the wave 4.
if we go back and look at the base channel, what I found out using this technique is that the trend line that forms the base channel often provides support for the wave 4 and then ends at the break of the boundary line above it. Wait until the correct price channel is on the bearish channel. Then we look at 5 ways to develop an idea. If you have three waves it is very easy, you argue that you can usually only draw one price channel and that is the signal on the price move. If your check is a counter-turn price move if you watch 5 waves, you should be able to draw 3 clear channels on it. So 3 waves, one channel, 5 waves, 3 channels. Well, now that I look at this price chart, well, what do you have? There is a move upwards, which is contained in parallel lines. It's a counter-train move. Thus we can expect more than to withdraw completely. Now go to the downside.
Best of luck.
Regards,
Chitroda Dharmik.
Static and dynamic support and breakout explanationStatic dynamic support if coincide together then zone is high probable trading and investing zone
and same for static and dynamic breakout coincide together is also high probable trading and investing zone.
like the page if u love this depiction
Static and Dynamic supportThis chart is explaining static and dynamic support.
here horizonal base line is creating as static support
and 200 EMA is creating dynamic support
arrow upside mark below 200 EMA is showing dynamic support for price
arrow upside mark below horizontal line is showing horizontal support line
click like button if you like this support tutorial
Flag Pattern (Flag and Pole Pattern)A flag pattern is a trend continuation pattern, appropriately named after it’s visual similarity to a flag on a flagpole. Flag patterns can be bullish or bearish.
1. Flagpole: A line extending up from this break to the high of the flag/pennant forms the flagpole. The flagpole is the distance from the first resistance or support break to the high or low of the flag. The sharp advance (or decline) that forms the flagpole should break a trend line or resistance/support level.
2. Flag: A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up. The price action just needs to be contained within two parallel trend lines.
3. Break: For a bullish flag, a break above resistance signals that the previous advance has resumed. For a bearish flag, a break below support signals that the previous decline has resumed.
4. Volume: Volume should be heavy during the advance or decline that forms the flagpole. Volume contracts during the flag's formation and expands right after the resistance/support breakout.
5. Target: The length of the flagpole can be applied to the resistance break or support break of the flag to estimate the advance or decline.
about elliot wave All the rules of elliot wave
1. Wave 2 can never retrace 100% of wave 1
2. wave 3 can never be shortest
3. wave 4 can never get into the price territory of wave 1
if they do not match then you are not placing the waves correctly
Why is Closing Price important? Why do I prefer taking trades at 3:25 p.m.?
Most stock prices rise significantly after 3:25 or fall just before 3:25, forcing us to enter at a lower price. Second, we simply want to be as close to the closing price as possible because many intraday positions are squared off at 3:20 p.m. and the price remains somewhat volatile for the next 5 minutes. In my opinion, the most accurate price is at 3:25 pm, which is reflected in the stocks as well, as most of them close at or near the price at 3:25 pm.
Until trading resumes on the following trading day, the closing price is considered the most accurate valuation of a stock or other security. There is a widely held belief that amateurs always open the market and professionals always close it. Opening prices can be influenced by a variety of factors, including global news, gap ups and downs, economic news, and so on. Furthermore, there is always a larger player than you working in the markets alongside you. By "bigger players," I mean people with a lot of money, also known as institutional investors or "smart money." They trade between 9:15 a.m. and 3:30 p.m., the same time as you. They face the same risk when dealing with billions of shares as you do when dealing with a single share. At night, anything can happen. He is basing his holdings on the day's closing price. As a result, it is the most important price. They are certain that it will not result in a gap the following day.
The primary goal of looking at the closing price is to ignore intraday price movement because it allows us to avoid tracking the market for the entire day, make fewer but higher quality decisions, enforce discipline, and reduce the likelihood of false breakouts. There are numerous examples of the market trading in the positive all day but then dipping into the negative at the end. When such movements occur, it indicates that professional money is at work at the time. In most cases, they are probably better at predicting future events than most people, so they are relying on the closing price of their holdings.
When looking at breakouts, we do not consider it very significant if the stock crosses above a certain level and then returns to the previous level. There are numerous intraday breakouts occurring in the markets, and tracking them is, in my opinion, a futile exercise because it is difficult to predict whether they will hold or not.
As only a few people can spot a breakout in live markets, the closing price is the earliest option to enter a trade. 90% of traders will begin researching the stock after the market closes, putting you ahead of the competition and allowing you to capitalise on gap-up opportunities. It aids in determining whether or not the trend is sustainable.
As a result, as you'll see, most of the charts are plotted solely on the closing price, implying that people's attention is drawn once the price closes above a certain level.
CLASSIC ELLIOT WAVE PATTERN AND TRADE SETUP LOGICPost covid IDFC FIRST has been moving up in an impulsive manner.Impulsive move advance's price in 5 waves of which 1,3 and 5 are in the direction of primary trend and 2 and 4 are counter trending.
Elliot wave Patterns discussed in this chart and it's rules.
*Elliot wave impulse pattern and rules:
#Impulse pattern
1)Wave 2 doesnt retrace wave 1 completely.
2)Wave 3 cannot be shortest of wave 1,3,and 5
3)Wave 4 should not enter wave 1 price action zone or wave 2(incase wave 2 being an running flat correction ).
#leading diagonal
Leading Diagonal:It is variation of an impulse pattern where in we see 5 wave advance in the direction of primary trend but rule 3 of impulse pattern is not followed by wave 4 and wave 4 enter's wave 1 zone.Rest of the impulse rules remains same.It can have internal structure 5-3-5-3-5 or 3-3-3-3-3.
#Extention
Extention pattern is nothing but any motive wave sub-dividing itself in 5 sub-waves of smaller degree and extending either of the motive wave by at least 161%,in this case we can see this happening in wave 3.(a classic pattern)
*Elliot wave Corrective pattern and rules:
#Flat:
1)It is a 3 wave (A-B-C) pattern,in a counter trending direction.
2)It has internal structure of 3-3-5.
There are many variation of FLAT correction depending upon wave B and wave C's length.One of which is Flat with truncated C which is seen in this chart and discussed below.
Truncated Flat:It is a variation of elliot wave corrective pattern called a FLAT correction which has 3 sub-waves(A-B-C) of almost equal length in the opposite direction of primary trend having internal structure of 3-3-5.In truncated wave C FLAT,sub-wave C doesnt retrace sub-wave A entirely by 100%,indicating strength in primary trend.
#Triangle:
Triangle is corrective pattern with 5 leg's in the form of A,B,C,D,E.Triangles are generally seen in wave 4.It has internal structure of 3-3-3-3-3.There are 3 main variation of triangle pattern ,regular triangle,expanding triangle or neutral triangle.Over here we are seeing either expanding or a neutral triangle.But i am only specifying rules of neutral triangle over here reason for which is discussed in detail below in analysis part.
Neutral Triangle:
Here wave C is longest among wave A,C and E and hence instead of A-C we connect C-E trendline in triangle formation.Triangle's are tricky pattern to trade.In classic technical analysis a head and shoulder pattern top or bottom represents neutral triangle.
Following patterns are observed in this chart:
Wave-1)Leading Diagonal-we had 5 sub-wave where in wave 4 was over-lapping wave 2.
Wave-2 ) ABC FLAT with Truncated C,meaning wave C didn't achieved it's regular flat 100% wave A extention target,indicating strong momentum in wave 3,also wave 1 was only retraced by 38% which again indicates wave 3 will be extended.
Wave-3)Classic 261.8% extention of wave-1,nothing much to explain as it's a text book elliot pattern where in momentum is strongest.
Wave-4)Triangle(either neutral or expanding),again a typical elliot 4th wave pattern where we see prices correctiong in 5 leg's A,B,C,D,E each internally sub-dividing in 3 waves giving entire structure 3-3-3-3-3 internal structure.
Analysis:As of now we are in wave 4 in primary degree,making either of the above mentioned triangle.So far we have already seen 4 leg's of this triangle and wave E is going on.In this wave E we are done with wave A and B and currently wave C is going on.I am considering this wave E as a regular flat.
Reason behind wave -4 to end near 44 levels.
1)100% wave A extention target of wave C for regular flat correction in wave E of triangle is coming @ 44. 05 INR
2)We also have 61.8% retracement of entire primary wave 3 coming @ 44.95
3)Add to it we also have intermediate wave 4 low of primary wave 3 @ 43.50 odd levels
4)lastly we have raising trend-line connecting triangle's wave C low's and wave E's sub wave B(not shown) coming at 45 odd levels.
This are sufficient evidence for priamry wave-4 to end near 43-45 levels.
Trade setup
1)For Conservative trader:
One can go long once the B-D trend-line of triangle get's broken which is coming at 50 odd levels with a initial stop-loss of wave 4 low's and expect wave 5 to be of equal length of wave 1 giving us price target of 61.Risk reward would be 1:2 expecting wave 4 ending @ 44-45 levels.
2)For Aggressive trader:
For some one who is aggressive can take long's once we get reversal candle in our target zone of 43-45 on daily chart meaning a morning star , hammer , bullish peircing, bullish engulfing candle sort of candle.Stop-loss would be same wave 4 low,however in this case we would be showing commitment before market commits itself but then one does get better risk-reward by entering early.Here also target will remain same of 61 but risk reward will be better compare to 1st scenario.
One can even add momentum indicator and a short-term moving average for further confirmation in order to take entry .
PS:Analysis shows classic text book elliot wave pattern and it's characteristics which is very rare to find on practical charts,hopefully this post help's someone who is learning elliot wave theory.We are also seeing alternation between wave 2 and wave 4 interms of price,pattern,time and retracement which is again a classic impulse characteristic.
Disclaimer:Analysis provided here is for educational purpose,trades should not be taken solely on its basis
How big players tradeJust identify big candle move in ur chart which is strong enough so this is kind of move is made by
Big player , draw the zone using open and close of basing candle and wait for price to retrace and show
The price rejection
The price rejection because bank deploy their limit orders
Keep learning
ADA reversal when?Hey everyone,
Here is a detailed analysis of Cardano . It has been in a downtrend since September first week. We might consider this downtrend as a correction if it takes support on the 0.786 level of Fibonacci . Let's get into the history of ADA and what happened in the past few weeks.
ADA retraced from the golden zone of Fibonacci of the previous wave and went for a new high at 3.097 USDT . Since then, it is in the downtrend. It has made some chart patterns too. Let’s look into it.
The Bearish Rectangle Formation
The rectangle figure is a trading pattern which can appear during bullish and bearish trends. The pattern consists of tops and bottoms, which are parallel to one another. The other key point to illustrate is that the highs and lows are all horizontal. I have shown the figure of the bearish rectangle at the top of the chart.
After recognizing the chart pattern, you have to wait for the breakout and pullback. The pullback candle should not close inside the rectangle. Once the pullback is done, you can see a massive downward movement. I have marked the pullback with a green eclipse.
We can set 2 profit targets for this pattern. First can be equal to the height of the rectangle and second can be equal to the length of the trend above the rectangle. I have marked the profit targets with the price range arrows .
Reversal When?
According to the trend-based Fib Time reversal , the trend might reverse around 26 December, if everything goes right. You can comment down if you wan to learn how to make it.
When to buy the dip?
According to me, you shall consider these 2 prices for the same:
1.46 to 1.55: It is the 0.786 level on Fibonacci with a major support and resistance zone.
1.02 to 1.21: This Is the zone between the previous low and the 2nd target of the bearish rectangle.
Does ADA have good fundamentals?
Ofcourse! Cardano’s purpose is somewhat same as Bitcoin’s purpose, but it is slightly faster in making payments. It works on blockchain, and it operates in 2 layers. The current market cap is around $50B and it was once ranked 3rd in the total market cap, which has now decreased to 6th. The social media following and team behind the project is also good.
Hope you like the idea. I might not be able to post the photos of analysis of different timeframes in the same idea, as I don’t have TradingView Premium. The reason for the same is that I’m a teenager and I’ve been trading the markets with the borrowed money from my parents. I can’t afford to buy the premium, hence I request TradingView to unlock some features for some traders like me.
Do check my previous education idea on cup and handle chart pattern through the link given below.
The Perfect Fibonacci Retracement ExampleHere is a stock with good cash flows and EPS.
RVNL made its previous all time high in January '21. Then, it went for a healthy correction at the end of the month. Getting retraced from the golden level of Fibonacci, then it consolidated till the 3rd quarter of the year. It skyrocketed to the new high at 44.80 in mid October.
In this situation, I drew the Fibonacci Retracement from the previous low to the previous high (in an uptrend). The previous low was at 20.60 on 22 December 2020 and the previous high was at 35.55 on 11 January 2021. After that, price went for a correction to 26.55 on 28 January 2021, got retraced. After the retracement, it consolidated between 26 to 34 till 18 October 2021, here price broke out of consolidation and went for a new high at 44.80, which was our desired target.
Understanding Fibonacci Levels
The theory of getting the 61.8 number is pretty amazing. If we start from 0 and 1 and keep adding the prior number to get a sequence like:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233...
Now, in this sequence, if we divide any number by its next number, we will always get 0.618, and if we divide 0.618 by 2, we will get 0.382. The 0.5 level is not officially a Fibonacci level, but it is a major level.
So, we come up with a conclusion that 0.618 is the golden ratio, and the golden zone is between 0.5 to 0.618 (between the red lines). This zone is the main point where the price reverses back. Fun fact is, you can also find the work of golden ratio of Fibonacci in the nature too. Read more about it on Google.
What should be the target after getting retraced?
The target should be always between -0.382 to -0.618 levels (market with black box). And, for further more targets, one should learn Fibonacci Extension.
Remember, that targets does not get hit just after getting retraced. After the retracement, price always consolidates before shooting up or down, in the direction of the Fibonacci made or in the direction of the trend. In this scenario, we are in a bullish trend.
XanderCrypto Day trading Indicator v2.3Overview: This is a day trading Indictor works using support & resistance and market trend, it is designed for all type of markets (crypto, forex, stock etc.) and works on all commonly used timeframes (preferably on 1H, 4H Candles).
How it works:
Core logic behind this indicator is to finding the Support and Resistance , we find the Lower High (LH) and Higher Low (HL) to find the from where the price reversed(bounced back) and also we use a custom logic for figuring out the peak price in the last few candles (based on the input "Strength" ). Based on the multiple previous Support and Resistance (HH, HL, LL LH) we calculate a price level, this price level is used a major a factor for entering the trade. Once we have the price level we check if the current price crosses that price level, if it crossed then we consider that as a long/short entry (based on whether it crosses resistance or support line that we calculated). Once we have pre long/short signals we further filter it based on the market trend to prevent too early/late signals, this trend is calculated based on the value from the input field "Factor". Along with this if we don't see a clear trend we do the filtering by checking how many support or resistance level the price has bounced off.
Stop Loss and Take Profit: We csn calculate the SL value by checking the previous support level for LONG trade and previous resistance level for SHORT trades. Take profit are calculated in 1:1 ratio as of now.
Available Inputs:
STR : Define the strength of the support resistance that we calculate. The lower value means less number of candles used for calculating the support & resistance and vice versa
Noise Reduction : Specify what level of trend to use. Using higher value will result script looking using the larger trend (zoomed out trend) and using lesser value will result in using the short trends
Note: For most of the charts you don’t need to change the default values. However, feel free to try it out.
How to use:
Add the script to the chart and once the indicator is load it will display the "long" and "short" entry points.
How to get access:
Send a DM to us for getting access to the script.
Introduction to Technical Analysis - Handbook for a laymanHi all, today we are going to study about basics and usage of technical analysis. I have prepared this wholesome post so that you guys are able to understand what technical analysis is all about. I have shortened the sentences to readable points, hence, don't mind the grammar.
Learning objectives:
After studying this post the student should be able to understand:
1. The basis of technical analysis
2. Top-down analysis in TA
3. Assumptions on which TA is based on
What is Technical Analysis?
1. Art and science of forecasting future prices based on an examination of the past price movements.
2. Based on analyzing demand-supply in any tradable instrument.
3. Analyze prices, volumes, open interest, various patterns, and indicators to it in order to assess the future price movements.
4. It can be applied to any time frame.
5. TA ignores fundamentals (like financial and non-financial aspects of the company) and focuses on actual price movements.
6. TA is not astrology for predicting futures prices.
The Basis of Technical Analysis
What makes the Technical Analysis an effective tool to analyse the price behaviour, is explained by following theories given by Charles Dow:
1. Price discounts everything
“Each price represents a momentary consensus of value of all market participants – large commercial interests and small speculators, fundamental researchers, technicians and gamblers- at the moment of transaction” – Dr Alexander Elder
The current price fully reflects all the possible material information which could affect the price.
The market price reflects the sum knowledge of all participants, including traders, investors, portfolio managers, buy-side analysts, sell-side analysts, market strategist, technical analysts, fundamental analysts and many others.
Technical analysis looks at the price and what it has done in the past and assumes it will perform similarly in future under similar circumstances.
2. Price movements are not totally random
If prices were always random, it would be extremely difficult to make money using technical analysis.
Technical analysis is a trend following system. Most technicians acknowledge that hundreds of years of price charts have shown us one basic truth – prices move in trends.
A technician believes that it is possible to identify a trend, invest or trade based on the trend and make money as the trend unfolds.
TA can be applied to many different time frames, and so it is possible to spot both short-term and long-term trends.
3. What is more important than why
“A technical analyst knows the price of everything, but the value of nothing”.
Technical analysts are mainly concerned with two things:
1. The current price
2. The history of the price movement
All of you will agree that the value of any asset is only what someone is willing to pay for it. Who needs to know why? By focusing just on price and nothing else, technical analysis represents a direct approach.
The price is the final result of the fight between the forces of supply and demand.
The objective of analysis is to forecast the direction of the future price.
Fundamentalists are concerned with “why the price is what it is”. Technicians believe it is best to concentrate on what and never mind why. Why did the price go up? Simple, more buyers (demand) than sellers (supply).
The principles of technical analysis are universally applicable. The principles of support, resistance, trend, trading range and other aspects can be applied to any chart.
TA can be used for any time horizon; for any marketable instrument like stocks, futures and commodities, fixed-income securities, forex, etc.
Top-down analysis in Technical analysis
Consider the overall market, most probably the index. If the broader market were considered to be in bullish mode, analysis would proceed to a selection of sector charts.
Those sectors that show the most promise would be selected for individual stock analysis.
Once the sector list is narrowed to 3-5 industry groups, individual stock selection can begin.
With a selection of 10-20 stock charts from each industry, a selection of 3-5 most promising stocks in each group can be made.
After the stock selection, start with higher time frame charts and move down to the lower time frames.
Technical Analysis: The basic assumptions
The field of technical analysis is based on three assumptions:
1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.
The market discounts everything
Technical analysis is criticised for considering only prices and ignoring the fundamental analysis of the company, economy etc.
TA assumes that, at any given time, a stock’s price reflects everything that has or could affect the company - including fundamental factors.
The market is driven by mass psychology and fluctuates with human emotions. Emotions may respond rapidly to extreme events, but normally change gradually over time.
It is believed that the company’s fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately.
This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.
Price move in trends
“Trade with the trend” is the basic logic behind TA.
Once a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Analysts frame strategies based on this assumption only.
Trend is your friend. Don’t betray your friend.
History tends to repeat itself
People have been using charts and patterns for several decades to demonstrate patterns in price movements that often repeat themselves.
The repetitive nature of price movements is attributed to market psychology.
Market participants tend to provide a consistent reaction to similar market stimuli over time. Big Green candle = Buy, Big Red candle = Sell.
So, this is it for this post. It should clear all the basic doubts about TA. If it doesn't, post the queries in the comments and I will try to help you out.
I spend a lot of time creating these educational posts, illustrations, charts, and PDFs. Please be appreciative of that and leave a like and comment if you found these helpful. It will help me to know that people are actually reading these posts. Also, if you need a PDF of this post with all the charts and illustrations, check out the links below this post.
Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
NSE Certified Technical & Fundamental Analyst
Cup and Handle PatternA Cup and Handle pattern is a bullish continuation pattern that resembles a teacup on a candle chart followed by a breakout. The cup part of the pattern is where the price gradually changes its direction from bearish to bullish. The handle part is when the price pullback slightly before roars higher and continues the previous trend. Cup and handle is used to understand the reinforcement of the trend and explains in case you want to double your position or sustain the position for a longer time period. This pattern can take between 30 to 60 candles to form on any given time resolution.
1. Cup: The cup should be “U” shaped and resemble a bowl or rounding bottom. Generally, cups with longer and more “U” shaped bottoms, the stronger the signal. The cup should not be too deep. The depth of the cup should retrace 1/3 or less of the previous advance. Volume should dry up on the decline and remain lower than average in the base of the bowl.
2. Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. The smaller the retracement, the more bullish the formation and significant the breakout. Sometimes this handle resembles a flag.
If the right side of the handle breaks above the peak formed between the cup and the handle, it confirms that the pattern is complete and that the uptrend will resume. There should be a substantial increase in volume on the breakout above the handle's resistance. The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.
Get the major levels through Pitchfork like a Pro!Hey everyone,
My previous education idea on Fibonacci Retracement got some good response. Today, I’m back with another education idea, explaining an awesome tool called ‘Pitchfork’.
Alan Andrew, the creator of Pitchfork tool, got inspiration from Roger Babson’s action reaction lines for the idea of this epic Pitchfork tool. Likewise, Roger also got inspired from Newton’s third law of Gravity, which is action-reaction theory. So, the main root for the idea of this pitchfork tool is Sir Isaac Newton.
The pitchfork looks like the gardening/agricultural tool used for picking and throwing loose material. There is a usage of median as its primary support or resistance level. There are 4 types of pitchforks, i.e., Original, Schiff, Modified Schiff and Inside. We will discuss only about Original Pitchfork today, which is used in trending markets. The other types of Pitchforks are used in consolidation or reversal or trending markets too. Comment below if you want to learn about the other types of Pitchforks too.
There are few trending ways of trading the breakout of Pitchfork, i.e, Price Failure Rule, Divergence, Mini-Median Line and many more. We will not focus on them right now. Do let me know if you want to try them too.
How do I trade the Pitchfork levels?
Currently I’m using the Original Pitchfork (for the trending market) with the median levels: 0.5, 1, 1.5, 2. The main median line is red.
0.5 and 1.5 lines are dashed. 1 and 2 are important median lines.
Let’s start with the strategy.
We shall start from higher timeframe first. I’m using daily timeframe.
Here is how to draw it: I started to draw the Pitchfork from the first low (marked with ‘A’) of the current trend, then you shall click on the next high (marked with ‘B’), then the next low (marked with ‘C’).
Do not forget to turn on the magnet, because every pip matters while drawing the Pitchfork.
Now, you will get the levels to trade. We shall go to the lower timeframes now and check if it is in the same trend till the 15mins timeframe. You have to look for few confirmations on 1 and 4 hourly timeframes before taking the trade. These confirmations may be any candlestick pattern and try confirming with any good oscillator too.
Remember, in the starting of a bullish market, you should always long your first 3 or 4 swing trades.
Here are some of the observations:
Prices will touch these median lines before making any move in 80% of the cases. There are 20% chances that prices might not touch the median levels due to sentiments.
After touching any median line, price might want to reverse or pass by the median line.
For confirming the reversal, you should look for any candlestick pattern and there should be overbought or oversold situation on your oscillator too. Do not take the trade if any one of them is not present on both 1 hourly and 4 hourly timeframes. The target will be the next median line upcoming in the direction of your trade. (For swing trade)
For passing by a median line, price will take a pull back on the 15 minutes timeframe after passing by a median line, in most of the cases. It will always make a wick or some engulfing or doji candles there. These candles are the confirmation that you can trail your SL or get into the trade.
Trust me, it is not as easy it looks on the higher timeframe. The main game is taking entry on the lower timeframes. Try back testing this strategy before using it.
Always use proper risk management. Trade Safe!
Institutional money - Volume speaks a lot!Apl Apollo is one of the leading companies in Indian Steel sector.
I had some previous posts on it as well, which played out well for me.
The key aspect is to put urself in those big shoes and think like an Institution.
The key problem if you are an institution and want to buy a sizeable portion in a share is LIQUIDITY.
How will you get enough sellers to buy shares from?
Notice how on 11th Nov at 902 level,
One MF house Sold its position in APL Apollo while another Bought it.
One created Liquidity for the other.
Similarly on 20th December, Two MF houses did the same routine.
To understand how this impacts Volume, we need to understand what VOLUME is!
VOLUME of a day is simply the number of TRADES that took place on that day.
It doesn't mean that there are more buyers or more sellers, simply that N number of buyers and sellers did a trade.
Now MF Houses do this in a very large amount, and this drives up the volume.
If you have been in the market long enough, you would have definitely noticed that
Price tends to return back to the Institutional Buying Level after a short Impulse -
The Retailers usually buy in the rise and then when share prices fall down to original levels, they exit their positions to avoid further losses or simply put, their stop losses get triggered. This creates LIQUIDITY for the Institutions to fill their partial positions at the same price after offloading them to retailers previously at the top.
In this particular case,
There are a number of green flags.
Share Price bounced from EMA 100 - which has been a strong support all along.
RSI 30 - the usual bounce level and MACD Divergence decreasing
Prices are again above EMA 50 which has been a key level in rising trends for this share.
In previous 4 occasions when this happened, the share went on to make a Higher High.
I am expecting some upside here as well.
This is not an Investment Advice. Only for Educational Purposes.
Thanks for reading!
Big players trapWhen ever you trade support or resistance or trendline
Alway trade after a false break
This is only for education purpose donot trade
RISK MANAGEMENT & POSITION SIZINGTo become successful in trading its not that what your system win rate or risk reward is ;rather its the Risk management. Every professional trader manage their risk and not trade with random position sizing. They're very strict for the same. Most of the new traders either don't know what the term is or they don't take it seriously. But it's the most crucial part of trading. Without knowing and applying this no one can be profitable in this business in the long run. Quite complicated, right? Don't worry I'm gonna explain with example.
Solution: if you manage your position sizing, risk will be managed automatically. So how to do this? Very simple. Let's assume you have 1,00,000 capital(For Only swing trades).
1. Don't take any trade just randomly. For example, you identified 5 breakout stocks and invested 20k, 10k, 50k, and so on in each without calculating the risk. In this case those all stocks may have different % of risk or SL. So YOU CAN'T WIN!
2. Define your risk per trade = 0.5% to 1%( Don't take risk more than 1% strictly) i.e 500 to 1k per trade.
3. Now, How to calculate the position size per trade for 1,00,000 capital.
Ex- Let's assume you want to go long(buy) a stock that's price is ₹50.
Position size = loss per trade (1%of 1lac) ÷ stoploss price ( lets take ₹5)
= ₹1000 ÷ ₹5 = 200quantity.
Therefore as per your risk defined, you can buy 200 quantity of that perticular stock.
3. Strictly buy only those stocks which have high probability of at least 1:3 risk-reward.
Conclusion:
If you take 10 trades in a row and win rate is only 30%. Means you take loss in 7 trades and win in 3 of them. What will be your P&L? Let's see...
Total Loss= 7×1,000= 7,000
Total Profit= 3× 3,000= 9,000
Therefore, Net Profit = 9,000- 7,000= 2,000. Great!
If your win rate is just 50%
Means you win 5 trades and lose in 5 trades.
Total Profit = 5×3,000=15,000
Total Loss = 5 × 1,000 = 5.000
Therefore, Net Profit = 15,000 - 5,000 = 10,000
Awesome! Right?
Remember you can have more than 50% win rate.
Now how to make the process very easy and bit automated. Its very simple...
1) Go to the tools section..
2) Choose the 'LONG POSITION' tool (RR tool)
3) Apply it at the entry price.
4) Go to the settings of the RR tool
5) Edit the risk% to 1% and save it.
6)Now it'll automatically calculate the position sizing whenever you apply it on any chart. You can see it when you click on it in the middle @ entry price line.
Example- you can see I've applied this tool in this chart too for your reference. I use this tool in every chart.
If you have any questions write in the comments section.
If you like don't forget to hit the like button.
3RD WAVE SETUPELLIOT 3RD WAVE SETUP
What is Wave 3 of Elliott cycle?
Image result for 3rd wave setup in algo trading
The third wave of the Elliot wave theory is the most visually standing out wave. After the consolidation of the second wave, third wave breaks out. The third wave is a 161.8% Fibonacci extension of the first wave. As it is an impulse wave it is always in the direction of an underlying trend
HOW TO TRADE WITH BIG BOYS Whenever you open your chart and you want to trade with bank and financial institutions so
Simple find big and strong candle which is only created by big players so see the chart carefully
And identify where the big boys want to take the price and just follow them
Trade on your risk
HOW BIG PLAYERS PLAY THE GAME Whenever you see strong and big bold candle it is a clear indication of big players
Because this kind of move can't be made by small money so if you want to find bank
And financial institutions move you don't need to see data and news just see the charts
This big move retrace because of some PROFIT booking by big players
The dragonfly doji is because all big player place their buy limit order so you will also enter into the market after
Doji and play with big players
Keep learning from ur stoploss
Understanding Trend Change~See the price action underneath the red trendline area- what is the setup there? Every time a pull back to upside is created, it creates a NEW LOWER LOW (see the black arrow path created)
~Now see the price action above the green trendline area- what is the setup there? Every time a pull back to downside is created, it creates a NEW HIGHER HIGH (see the black arrow path created)
This is the basic difference between uptrend & downtrend!
Kiss Principle-1Trading with Horizontal LinesKiss(Keep it simple and straight)
In the chart I have drawn simply horizontal line on previous lows and highs where share price touched Max candles
These Lines will be our TGTS (Entry and Exit Levels)
Guys you have to just wait for 15 min candle break out with if you want to hold for week
For intraday trader wait for 5 min candle breakout
It has broken the level of 1485, next target will be 1456 and 1417 in next 2-3 days.
on buy side 1490 targets will be 1514 and 1550.
Happy Trading to all
