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Trade Efficiently in Volatility with These IndicatorsWhen trading in the stock market, it’s crucial to consider not only whether the market is trending or consolidating but also how to handle volatility. Therefore, understanding volatility indicators is key to trading more effectively. Here we are going to discuss some top Volatility Indicators that will be useful for traders who want to analyze and negotiate the market’s turbulence more successfully. What are Volatility Indicators? Volatility Indicators are technical tools that help in analyzing the market, measuring the speed and the size of price changes in the security, commodity, or even a market index. They give traders an indication of when volatility is high or low and this can contribute to risk assessment and trading strategies. These indicators offer some insight into how much volatility the market might anticipate for future periods and they may be used to identify possible tops and bottoms in markets, enabling better decision-making by traders. How to Identify Volatility in the Market? Standard deviation is a popular tool for spotting market volatility. Traders and analysts use it to understand what’s driving the market. It measures how much a stock’s price typically deviates from its average over a certain period. Volatility can be low or high. Low volatility means a stock's value is steady and doesn’t change much. High volatility means the value fluctuates a lot in a short time. Volatile periods in the stock market can lead to significant price swings, making trading challenging. Extreme volatility often occurs when major news impacts the market. High volatility is typically seen during trending markets, while low volatility is more common during consolidation phases. High volatility is great for breakout strategies and scalping, while low volatility is better for relaxed trading approaches. Top 5 Volatility Indicators When analyzing the market, here are some of the key volatility indicators that traders can employ. 1. Bollinger Bands Bollinger bands are composed of three: high, low, and middle. The middle band is a 20-day or bar moving average, the upper band is +2 Standard Deviation and the lower band is -2 Standard Deviation away from the middle band. When market volatility increases, the bands expand, and when volatility decreases, the bands contract. Bollinger bands can be used to trade when prices break out either above or below either side of the upper or lower bands following a low volatility or consolidation phase. 2. Average True Range (ATR) The Average True Range (ATR) is another technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for that period. Originally developed for commodities, the indicator can also be used for stocks and indices. The ATR indicator is most commonly used with other market indicators to confirm market moves or to anticipate possible market changes that are not readily apparent. A higher ATR indicates higher volatility and may be a sign of market uncertainty, while a lower ATR indicates lower volatility and could suggest market complacency. It’s important to note that the ATR does not provide an indication of price direction, only volatility.g stop loss levels, and for predicting price movements. 3. Donchian Channel Donchian Channels are a popular tool for gauging market volatility. This indicator features three lines derived from moving average calculations. It consists of three bands: an upper band, a lower band, and a median band in between. The upper band represents the highest price of a security over a specified period, typically four weeks, while the lower band indicates the lowest price over the same timeframe. The space between the upper and lower bands forms the Donchian Channel. Traders often use this channel to identify trading opportunities—entering a buy trade when the price breaks above the upper band, and a short position when it falls below the lower band. 4. Keltner Channels Keltner Channels resemble Bollinger Bands but with a key difference. While Bollinger Bands place their boundary lines at standard deviations from the moving average, Keltner Channels use the Average True Range (ATR) to set the channel distance. The Keltner Channels consist of an upper band, a lower band, and a middle line which is typically a moving average. The distance from the middle line to the upper and lower bands is calculated by multiplying the ATR with a factor, usually 1.5 or 2. The channels expand during periods of high volatility and contract during periods of low volatility, similar to Bollinger Bands. Traders often use Keltner Channels to identify potential price breakouts and overbought or oversold conditions. 5. Cboe Volatility Index (VIX) The Cboe Volatility Index (VIX), often referred to as the “fear index”, is a real-time market index that represents the market’s expectation of 30-day forward-looking volatility. It is derived from the prices of S&P 500 index options with a series of expiration dates. It gives a measure of market risk and trader’s sentiments. It is also inversely related to market performance, meaning when the market is performing well, the VIX tends to drop and vice versa. Therefore, it’s widely used as a gauge of market volatility and often used in portfolio diversification to hedge against market downturns. Conclusion In volatile markets, using the right tools can make a big difference. By combining different strategies and focusing on key aspects of market movement, you can manage risk and spot opportunities even when things get unpredictable. Remember, a well-planned approach and use of these tools can help you navigate market swings more effectively and boost your trading success.
NSE:BANKNIFTY1!
by Dhan
GLENMARK- Squeeze Buy!GLENMARK Attached: Daily Chart as of 31st March, 2023 Bullish Opportunity in Glenmark is clear as Price has Not Only given a CLASSIC CUP & HANDLE BREAKOUT BUT IT is also accompanied by a Squeeze Buy Signal aka the Squeeze Release ! (Note: Squeeze is a volatility and momentum indicator introduced by John Carter, which capitalizes on the tendency for price to break out strongly after consolidating in a tight trading range. The volatility component of the Squeeze indicator measures price compression using Bollinger Bands and Keltner Channels. If the Bollinger Bands are completely enclosed within the Keltner Channels, that indicates a period of very low volatility. This state is known as the squeeze. When the Bollinger Bands expand and move back outside of the Keltner Channel, the squeeze is said to have “fired”: volatility increases and prices are likely to break out of that tight trading range in one direction or the other.) CMP= 464.7 Targets🎯: T1= 500 T2= 550 Stop Loss⚠️: below 445, which is Breakout Candle Low
NSE:GLENMARKLong
by T_Harth
SENSEX S/R for 20/2/24Support and Resistance Levels: Based on the price action, you have to identify two significant levels: the red line acting as resistance and the green line acting as support. Additionally, there have marked red and green shades to represent resistance and support zones, respectively. Support: The green line and green shade represent support levels. These levels are where the price tends to find buying interest, preventing it from falling further. Traders can consider these levels as potential buying opportunities. Resistance: The red line and red shade represent resistance levels. These levels are where the price tends to encounter selling pressure, preventing it from rising further. Traders can consider these levels as potential selling opportunities. Breakouts: If the price breaks above the resistance zone (red shade) convincingly, it may indicate a bullish breakout, and the price could move higher to the next resistance level. On the other hand, if the price breaks below the support zone (green shade) convincingly, it may indicate a bearish breakout, and the price could move lower to the next support level. Keltner Channel: The Keltner Channel is a technical indicator that uses an exponential moving average (EMA) to create an upper and lower channel around the price action. Traders can use this channel to identify potential long and short positions. Long Position: If the price is above the upper line of the Keltner Channel, it may indicate a potential long opportunity, as it suggests the price is trading above the average range and might continue in an upward trend. Short Position: If the price is below the lower line of the Keltner Channel, it may indicate a potential short opportunity, as it suggests the price is trading below the average range and might continue in a downward trend. Disclosure: I am not SEBI registered. I just wanted to let you know that the information provided here is for learning purposes only. Please consult your financial advisor before making any decisions. Tweets neither advice nor endorsement.
BSE:SENSEX
by zenthosh
FIN NIFTY S/R for 20/2/24Support and Resistance Levels: Based on the price action, you have to identify two significant levels: the red line acting as resistance and the green line acting as support. Additionally, there have marked red and green shades to represent resistance and support zones, respectively. Support: The green line and green shade represent support levels. These levels are where the price tends to find buying interest, preventing it from falling further. Traders can consider these levels as potential buying opportunities. Resistance: The red line and red shade represent resistance levels. These levels are where the price tends to encounter selling pressure, preventing it from rising further. Traders can consider these levels as potential selling opportunities. Breakouts: If the price breaks above the resistance zone (red shade) convincingly, it may indicate a bullish breakout, and the price could move higher to the next resistance level. On the other hand, if the price breaks below the support zone (green shade) convincingly, it may indicate a bearish breakout, and the price could move lower to the next support level. Keltner Channel: The Keltner Channel is a technical indicator that uses an exponential moving average (EMA) to create an upper and lower channel around the price action. Traders can use this channel to identify potential long and short positions. Long Position: If the price is above the upper line of the Keltner Channel, it may indicate a potential long opportunity, as it suggests the price is trading above the average range and might continue in an upward trend. Short Position: If the price is below the lower line of the Keltner Channel, it may indicate a potential short opportunity, as it suggests the price is trading below the average range and might continue in a downward trend. Disclosure: I am not SEBI registered. I just wanted to let you know that the information provided here is for learning purposes only. Please consult your financial advisor before making any decisions. Tweets neither advice nor endorsement.
NSE:CNXFINANCE
by zenthosh
BANK NIFTY S/R for 20/2/24Support and Resistance Levels: Based on the price action, you have to identify two significant levels: the red line acting as resistance and the green line acting as support. Additionally, there have marked red and green shades to represent resistance and support zones, respectively. Support: The green line and green shade represent support levels. These levels are where the price tends to find buying interest, preventing it from falling further. Traders can consider these levels as potential buying opportunities. Resistance: The red line and red shade represent resistance levels. These levels are where the price tends to encounter selling pressure, preventing it from rising further. Traders can consider these levels as potential selling opportunities. Breakouts: If the price breaks above the resistance zone (red shade) convincingly, it may indicate a bullish breakout, and the price could move higher to the next resistance level. On the other hand, if the price breaks below the support zone (green shade) convincingly, it may indicate a bearish breakout, and the price could move lower to the next support level. Keltner Channel: The Keltner Channel is a technical indicator that uses an exponential moving average (EMA) to create an upper and lower channel around the price action. Traders can use this channel to identify potential long and short positions. Long Position: If the price is above the upper line of the Keltner Channel, it may indicate a potential long opportunity, as it suggests the price is trading above the average range and might continue in an upward trend. Short Position: If the price is below the lower line of the Keltner Channel, it may indicate a potential short opportunity, as it suggests the price is trading below the average range and might continue in a downward trend. Disclosure: I am not SEBI registered. I just wanted to let you know that the information provided here is for learning purposes only. Please consult your financial advisor before making any decisions. Tweets neither advice nor endorsement.
NSE:BANKNIFTY
by zenthosh
NIFTY S/R for 20/2/24Support and Resistance Levels: Based on the price action, you have to identify two significant levels: the red line acting as resistance and the green line acting as support. Additionally, there have marked red and green shades to represent resistance and support zones, respectively. Support: The green line and green shade represent support levels. These levels are where the price tends to find buying interest, preventing it from falling further. Traders can consider these levels as potential buying opportunities. Resistance: The red line and red shade represent resistance levels. These levels are where the price tends to encounter selling pressure, preventing it from rising further. Traders can consider these levels as potential selling opportunities. Breakouts: If the price breaks above the resistance zone (red shade) convincingly, it may indicate a bullish breakout, and the price could move higher to the next resistance level. On the other hand, if the price breaks below the support zone (green shade) convincingly, it may indicate a bearish breakout, and the price could move lower to the next support level. Keltner Channel: The Keltner Channel is a technical indicator that uses an exponential moving average (EMA) to create an upper and lower channel around the price action. Traders can use this channel to identify potential long and short positions. Long Position: If the price is above the upper line of the Keltner Channel, it may indicate a potential long opportunity, as it suggests the price is trading above the average range and might continue in an upward trend. Short Position: If the price is below the lower line of the Keltner Channel, it may indicate a potential short opportunity, as it suggests the price is trading below the average range and might continue in a downward trend. Disclosure: I am not SEBI registered. I just wanted to let you know that the information provided here is for learning purposes only. Please consult your financial advisor before making any decisions. Tweets neither advice nor endorsement.
NSE:NIFTY
by zenthosh
Adani Total Gas Ltd: Bollinger band squeeze inside Keltner ChIn Daily chart stock is getting Bollinger band squeezed inside Keltner Channels. I marked recent history in the chart to verify this pattern and If stock gives closing above BB then it is most probably going to give at least 25% profit as per trend ATGL following. so, Target would be anywhere near 25% and SL can be lower band or mean of BB. Note: I'm new to technical analysis , do your own Math. I'm open to new ideas and flaws in my analysis, so please do comment and collaborate. Disclaimer: This is for demonstration and educational purpose only. This is not buying or selling recommendations. I am not SEBI registered. Please consult your financial adviser before taking any trade.
NSE:ATGLLong
by hrprtsnghsht
1
Fantom Elliot Wave TheoryFantom looking bullish on the weekly chart price retraced back to the 32.8% fibonachi retracement. I believe we are at the finishing of wave 4 out of the 5 wave Elliot wave theory. Looking back in August 2020 we top out and retrace exactly at the 38.2% fibonachi retracement, if history repeat we are likely bottom. After all we are still in a daily uptrend. We would like to see the weekly candle ending 25/7/2021 at around currently price which will print a dragonfly doji candle (bullish candle). RSI on the weekly seem to coincide with the bottom of August 2020. Also it looks like we touch the bottom of the keltner channel as support on the weekly also which also coincide with the August 2020 lows. Happy Trading.
Long
by filllintheblank
1