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How to find SL levels using BREAKOUT INDICATORLearn how to determine SL levels using BREAKOUT INDICATOR. This indicator not only helps in finding BREAKOUT trades but also helps you determine SL levels, target levels and much more. Combining with 44EMA you can take your trading to the next level. The best part is that it works on any script, be it cryptocurrencies, commodities or indices. Never take a SL during the first 15 minutes of market opening, as chances of reversal are high and market is very volatile during that time. Use alerts on Tradingview to know whenever SL hits.
NSE:TECHMEducation
by breakoutinvesting
422
Market Cycles – Market Phases and Different TypesTypes of Market Phases There are 4 clear market phases, and all markets go through these phases in a repeated way: All markets go through 4 clear phases in a repeated way: 1.Accumulation Phase This phase occurs after the market has bottomed and early adopters begin to buy, figuring the worst is over. At this phase, valuations are very attractive, and general market sentiment is still bearish. Overall market sentiment begins to switch from negative to neutral. The end of an accumulation phase is typically marked by a breakout where trade sentiment moves towards neutral and traders start sniffing an opportunity. 2. Mark up Phase The market has been stable for a while and is beginning to move higher. The early majority are getting on the bandwagon. Traders, seeing the market is putting in higher lows and higher highs, recognize market direction and sentiment have changed. Markup phase begins with a breakout and tends to continue till there is a major pullback. Markets start trending upwards and more investors jump on the bandwagon as greed and the fear of losing out take over. 3. Distribution Phase This part of the cycle is identified by a period in which the bullish sentiment of the previous phase turns into a mixed sentiment. Prices can often stay locked in a trading range that can last a few weeks or even months. The distribution phase is a very emotional time for the markets, as investors are gripped by periods of complete fear interspersed with hope and even greed as the market may at times appear to be taking off again. This phase is marred with consolidations, breakouts and pullbacks at small scales, identifying trends become difficult. 4. Mark-down Phase The fourth and final phase in the cycle is the most painful for those who still hold positions. Many hang on because their investment has fallen below what they paid for it refusing to let go in the vain hope of being rescued. Timing the market correctly is the first step to making profits with TA. You would want to build a system that helps identify an entry point when the market is in the ‘mark up’ phase. The system should then also help you also identify when to exit once the asset is moving from the distribution to the ‘mark down’ phase.
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NSE:NIFTYEducation
by UnknownUnicorn7241612
60
Chapter 4: Trading Fibonacci Levels & Extensions of Bull CycleUnit_of_Technical_Analysis: Weekly Cycles Chapter 4: Trading Fibonacci Levels & Extensions of the Bull Cycle Fibonacci levels Tools used: 1. Fibonacci Time Frame: Weekly Method: 1. We have got the Bull cycle of 2016-2020 here and we are measuring the moves on Fibonacci Retracement on 2012-2016 cycle. 2. We have got the Bull cycle of 2020-2023 here and we are measuring the moves on Fibonacci Retracement on 2016-2020 cycle. Cycles within the Cycles: 1. Case 1: Trading Fibonacci Levels & Extensions (2016-20 Bull Cycle) Dates: 19/12/11 – 2/03/15: We have considered the Fibonacci of Bull cycle with 4531.15 value on 19/12/11 as Level 0 and 9053.15 value on 02/03/15 as Level 1: On 29/2/16, we got a Bear cycle low of 6825.8 while the 0.5 level was 6792.15, so we got a near perfect 50% retracement on a Bear cycle. On 5/9/16, we got a High of 8968.7 which was below level 1: 9138.18, and after moving down took support on 26/12/16 around 7893.8 which was near 0.786 levels of 8152.28. Between, 13/3/17 – 24/4/17 market consolidated around Level 1: 9138.18 and then gave an upward breakout Again, we could see a consolidation around 1.272 level and finally market created a high around 1.618 levels. If you check carefully, all major Support, Resistance and range had been around 0.5, 0.786, 1, 1.272 & 1.618 levels. 2. Case 2: Trading Fibonacci Levels & Extensions (2020-23 Bull Cycle) Similar to case 1 if we consider the 2020-23 Bull cycle, we can find some movement around same levels If you consider the Dates: 29/2/16 – 20/01/20: We have considered the Fibonacci of Bull cycle with 6841.18 value on 29/2/16 as Level 0 and 12430.59 value on 20/01/20 as Level 1: On 24/3/20, we got a Bear cycle low of 7511.1 while the 0.236 level was 8160.26, so we got a near perfect 0.236 retracement on a Bear cycle. On 8/8/20, we got a support around 0.5 level of the range Between 20/7/20 – 28/9/20 we got a consolidation around 0.786 level i.e. 11234.38 On 9/11/20,we got a breakout above 1 level i.e. 12430.59 Between, 28/12/20 – 1/2/21 market consolidated around Level 1.272: 13950.8, Again, we could see a consolidation around 1.618 level between 7/6/21 – 31-7/21 The current consolidation happened around 2 level If you check carefully, all major Support, Resistance and range had been around 0.5, 0.786, 1, 1.272 & 1.618 levels. Observations: If you check the weekly chart on Bull-Bear Cycle with Fibo Levels and Extension, we find Support-Resistance and Reversals around important levels like, 0.236, 0.5, 0.786, 1, 1.272, 1.618, 2, 2.618 levels Conclusions: 1. Fibonacci retracement can be best used across multiple time frame
NSE:NIFTYEducation
by chetanpathare
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
Unit_of_Technical_Analysis: Chapter 3: Bull CycleUnit_of_Technical_Analysis: Chapter 3: Bull Cycle: how to identify prior phase, The Bull Cycle, How to trade the Bull cycle. Tools used: 1. Fibonacci 2. Relative Strength Index (RSI) (36) 3. Moving Average Convergence Divergence (MACD) (18, 36, 9) 4. Moving Average (MA) (36) Time Frame: Daily Method: 1. Bullish Divergence & Falling Wedge (or Consolidation/Accumulation) for identification of uptrend along with Fibonacci 2. Bullish Divergence for Uptrend along with Fibonacci + Trendline Breakout Cycles within the Cycles: 1. Phase 1: Bullish Divergence Dates: 13/03/20 – 24/03/20: Pre-Phase of Bull Cycle We have seen in previous chapter that there was a bullish divergence at the end of 2008-09 Bull- Bear Cycle. Again it’s not necessary that we see a clear visible Divergence for a long period of 4-5 months like during 2008-09 cycle. It can also be for a short period like for 3-5 days also. In 2020, we continue with our Bear trend, and then from 2/01/20 to 12/03/20, we identify a Bullish divergence in Daily Chart. On 13/03/20 RSI(36) is 25.56 while on 19/03/20 RSI(36) is 22.69, and on 23/03/20 RSI(36) is 24.16 over a period of this 12-14 days, we identify a sharp increase in RSI (of around 3-4 points in terms of units), while the price is still creating Lower Highs (LH) & Lower Lows (LL) patterns these difference of Price moving downwards while Indicators moving in upward direction is called as Bullish Divergence. Falling Wedge: The price typically follows a pattern where it is moving downwards but with small and limited lows then the previous (swings) ones, the length of the swings are reduced which can be identified from the falling wedge. (Falling Wedge: an inclined line less than 45degree, where the price touches the bottomline of the wedge and starts moving upwards again) These Indicators/ Oscillators only give us Signals, while we can start getting confirmation from Fibonacci retracement, where price starts creating Higher High (LH) & Higher Lows (LL) after the 1st Range formation (check 1st Fibo with low of 7511.1 on 24/03/20 and High of 9038.9 on 27/2/20), we get a 50% retracement. The best part is to terminate your short calls if we don’t move and sustain below these 50% retracement. There are other methods too like trailing your SL to previous Highs, or Fibonacci retracements. Bullish Divergence in Daily charts are strong and should be taken very seriously, if we are in Short calls we should keep on trailing our SL to previous Highs/ trail SL after the High or wait for completion of Range, then trail your SL to High, and further trail SL to 0.5 level or 0.236 level of range thereafter. Idea is to keep maximum profits in your pocket and get ourselves prepared for the Bull Trend. 2. Phase 2: Start of Bull Phase Dates: 24/03/20 – 18/05/20: Start of Bull Cycle: At the start of Bull Cycle, Price, RSI & MACD are moving in same upward direction, i.e. with every upward movement in price, RSI & MACD are also moving upwards. We can see continuous Higher High (HH), Higher Low (HL) patterns in the Bull Market. The confirmation of getting into Long Bull call signal is important. Signal: RSI & MACD are moving in upward direction in tandem with Price after the Low of Bear cycle Confirmation to get into Long Calls for Bull Trend: The best part is to get into buying streak in Long calls is when we start moving above the 50% retracement in Daily. We apply the same method as seen in Chapter 1 & 2, we draw a range from Low of 7511.1 (Level 0) on 24/3/20 to High of 9038.9 (Level 1) on 27/03/20 and wait for a retracement upto the 0.5 level or range, we can get into smaller time frame and look for intraday/15 minutes price action where we get a signal on Fibonacci for an Entry or get an Entry once the market starts moving above 0.5 level with small SL we can enter into a trade as per price action. (We will work on detailing again in coming Chapters with smaller time frames, currently we moved from chapter 1: monthly time frame to Chapter 2, 3 & 4 Daily Time frame) (On 1/4/20 & 2/4/20 price closed below 50% level and on 7/4/20, it started moving above and also closed above 50% level of the range). After moving above 50% level, price further moves above 0.786/ 1 levels and hits a target of 1.272/ 1.618. This completes formation of the 1st leg {(0-1 range), (reversal to 0.236/0.5 levels) & (extension to 1.272/1.618) of daily chart in total is the 1st leg as called as Unit of Technical analysis}. Market may give a 50% retracement after completion of this 1st leg Always remember that after completion of 1st leg, market gives a 50% retracement or a small reversal, these short reversals at regular levels signifies a strong uptrend. These small reversals are again as per Unit of Technical Analysis pattern. The Downward trendline of Bear Cycle is also broken during the Bull phase yet another confirmation of Bull Trend. Trendline: From the market high of 20/2/20 to next lower high of 5/3/20, the line joining these 2 points will be our 1st trendline, please remember, there can be slight change in trendline or formation of new trendline after a period of time. The trendline breakout is generally followed by back-testing (after breakout with good bullish candle/s): (marked with highlighted portion in yellow) a. 17/4/20 & 20/4/20 breakout from Trendline b. 21/4/20 backtesting of Trendline c. 22/04/20 further upmove of bullish uptrend and again breaking the previous high of 20/4/20 and market started moving up again. (That’s how the fight between Bulls & Bears goes on) subsequently we keep on creating Higher High (HH), Higher Low (HL) pattern and the uptrend continues. 3. Phase 3: Bull Trend continuation Continuation of Uptrend The uptrend is continued by forming new Higher Highs (HH) and Higher lows (HL), After completion of the 1st leg, market had given a 50% retracement (Refer Fibo 2 on right) Important thing is to look for patterns creating an uptrend, followed by Bullish Divergence and most important Price moving and sustaining above 50% level. If price doesn’t sustain the 50% level/ 0.236 level, we are in reversal. These is the most important aspect that we saw in Chapter 1, where Bull Cycle follows a pattern of creating a Range from Low (0) to High (1) and Price taking a support at 50% levels (0.5 level of the range) or 0.236 level of the range. There can be small reversals seen during the cycles, these maybe followed as per Fibonacci levels (will be covered in Chapter 4: Trading Fibonacci Levels of the Bull cycle) or ever as per Gann 90/120 days cycle for High’s and lows, here knowing the start point is very crucial. Even if we can make out from the chart later on that, the price was the lowest on 24/03/20 of 7511.1, the real test is studying the market after 24/03/20 and finding out when we can expect a reversal and catch the trend during the time period. After the market has completed a downtrend, that marks the start of Bull Phase. (Remember, during live trading, we are not sure what will happen next but trade on the basis of price action, signals, indicators and probabilities) We can also refer to 2008-09 bull trend formation in Chapter 2, which will again give an idea of the consolidation formed during the Bull cycle. Subsequently, we see channel breakout, backtesting and price making further HH-HL pattern. Observations: The price movement during the Bull phase is systematic and moves in phases as described above, Identification of uptrend can be best identified with Bullish divergence and confirmation with price action in the form of Fibonacci Retracement and vive-versa for Bullish Divergence. For continuation of trend, Price, MA, RSI & MACD are moving is tandem. Conclusions: 1. Fibonacci retracement can be best used along with RSI & MACD. 2. We can identify signals when small Fibonacci (in 15/30/hourly charts) gives retracement @ 0.236/0.5 levels and Long Buy signal for Weekly/ Monthly calls with 50% Fibonacci levels are described above. 3. Reversal patterns can be best identified with Fibonacci when Higher-High :Higher-Low patterns are formed. Notes: What is Bullish Divergence & Falling Wedge, Moving Average, there are various YouTube videos available.
NSE:NIFTYEducation
by chetanpathare
2
How good are staggered Investments?HOW GOOD ARE STAGGERED INVESTMENTS? BACKGROUND We all know the catchy word “SIP” which stands for Systematic Investment Plan. This may well be the most frequently used word in the Mutual Fund business and for savings as well as investments in general. And there is nothing wrong about it as a large retail investor base would not be able to invest in various avenues of investment in a lump sum manner unless they receive a bumper or out of the ordinary windfall gains. INTENT The intent of this post is to introduce the readers to a variant of the SIP which I recently experimented with in the months of Nov - Dec 2021. As mentioned in the earlier para, I received an out of the ordinary large amount in Nov 2021 and I was exploring the avenues for placing it such that I do not risk more and yet am able to get a modest return. The aim was to protect the capital and not earn index beating returns. WHAT DID I DO During the course of my weekly analysis, I analyze the Nifty 50 and Bank Nifty scrips in particular using monthly, weekly, and daily timeframes and also several other scrips that form part of my watchlist. While doing so, I realized that there were several scrips that were at a good distance from their swing high which in many cases were the ATH levels when Nifty had hit 18604. The retracements were very significant so I thought why not make small investments in some of the scrips that I had identified. At that time, I also decided to experiment with staggered or phase-wise but not SIP type of investments in these shares. Beginning 8-11-21, I started the process of such investments and between then and now, I have made 6 such investments. I ensured that I did not blindly add to the losers but had a basis in my mind for the positional trades. During Nov 2021, Nifty made a low of 16782 and during Dec 2021, Nifty made a low of 16410. On 5-1-22, at the time of writing this post, Nifty is at 17837. This is a good 1427 points above the Dec 21 lows and is now up 8.7% which is a great ROI in 2 months. However, I just reviewed the status of these investments and they have at an aggregate level gone up by 6.36%. The highest ROI so far is in Mirza Intl @ 68.88%. The lowest ROI so far is in Tata Consumer @ -10.83%. CONCLUSION Obviously, I have no issues with the highest ROI scrip. Neither do I have an issue with the lowest ROI scrip as I have not added to the losing scrip even at lower levels as I did not want to increase the exposure. My expectations from these unexpected tranches of investments are not much so I am quite happy to receive a 6% gain as of now. I have not beaten the Nifty ETF but that was never the objective. Many of the scrips where I have invested in the “staggered basket” are those where I would not have ordinarily invested as my universe of investible scrips is limited. So this has helped me know the unknowns as well and that scrip has given the highest ROI! I am still sitting on some funds out of this lump sum so I can add to the position at any available opportunity even though the indices are at much higher level than what they were in the previous months. I can move the entire amount out of equity and place them in a Debt Fund and bring it back in when the market / scrips are at attractive levels. This is the approach that I would prefer the most though I am undecided on the course of action for now. My live experiment with the “staggered” form of investing in my view has been a good one so far and I am satisfied with the outcome. In fact, it is one of the ways to spread the risk and learn to identify good scrips at attractive price levels using technical and or fundamental analysis since the view is positional to long term. I hope the above helps you know how I prefer to trade the markets and keep exploring the opportunities available in the market to make incremental returns. This post has been shared for educational and informational purposes only. I welcome your thoughts and insights in case you have also experimented with such/similar way of trading/investing. Happy Trading/Investing, Umesh 5-1-22 Not SEBI Regd.
NSE:NIFTYEducation
by AVENUESOFINVESTMENT
Real Time example - TRIPLE ZIGZAG (Bullish)Let's talk about each waves of Triple Zigzag: Wave W (5-3-5) impulsive: ((a)) = ((b)) at 17709 which is close actual low 17613. Its a sharp zigzag. Wave 1X corrective: Wave ((b)) 3-3-5, Running Correction which is little complex. Wave Y (5-3-5) sharp: ((a)) = 0.786 ((b)) at 16824 which, is very near actual low as 16782 Our first question is, What is the Zigzag? In chart, a, b and c is zigzag which very easy to understand by picture. Its really easy to understand this wave counting if you read just below basic rules and Characteristics of Zigzags. The main question, What is going on in nifty? This Triple Zigzag is bullish pattern. Really market is follow this pattern? - Wait and Watch... Characteristics of Zigzags: — labeled a-b-c — subdivide 5-3-5 — typically occur in wave 2 position — ‘b’ wave does not approach ‘a’ wave origin — ‘c’ wave ends beyond ‘a’ wave extreme — belong to ‘sharp' Rules: - Wave A always subdivides into an impulse or leading diagonal. -Wave A always subdivides into an impulse or leading diagonal. - Wave B always subdivides into a zigzag, flat, triangle or combination. - Wave C always subdivides into an impulse or diagonal triangle. We can use channel for zigzag. The Wave C often ends upon reaching the extreme of the channel.
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NSE:NIFTYEducation
by Trade-Technique
30
Trading Research - INFY (Triangle) Sell SetupNOTE: SHORT SELLER MIGHT HAVE MUCH RISK BECAUSE OF GAP UP WAS OPENED ON 16 DEC. 2021 INFY 4hrs continuation chart with 5 waves up and side wave trend. Possible also upside move instead of WYZ flat pattern but if we just look at WYZ flat pattern scenario 1725 and 1692. Look for equality, I come to exactly 1660 where wave Y equals W. One of the waves within triangle, usually we see wave E triangle that why I assume here ABCDE triangle of wave ((E)). In-front of you chart of INFY, its a short term chart and with low 1311 & high 1848. This is how I view the basic of wave count, roughly. This is easy technique to identify the waves and count them correctly.
NSE:INFYEducation
by Trade-Technique
16