Silver DivergenceDivergence and Gold/Silver Ratio
Gold and silver are thought to move together, and often they do. There are periods where the Gold Trust (GLD) and Silver Trust (SLV) move in opposite directions and periods where one metal outperforms the other.
Gold is currently outperforming silver. Such discrepancies occur and are monitored by the gold/silver ratio. The gold/silver ratio shows how many ounces of silver it takes to buy an ounce of gold. Since 1975, the average is near 60; right now it stands near 80 ($1,187 divided by $14.99).
While gold outperformance, or silver's underperformance relative to gold, was very noticeable in early 2016, this has actually been going on for a long time. The outperformance has become even more pronounced since 2016. To start 2016, gold traded at $1,069 and silver at $13.80 -- the gold/silver ratio of 77.5. As of Oct. 2018, it's at 80. Gold prices have risen relative to silver prices quite steadily for years. This is mainly due to silver price weakness since peaking near $50 in 2011 (when silver outperformed gold).
Traders
Beginner to Advanced Trading
Every successful investor has one thing in common, they read as many investment books as they can. Trading in the share market requires a basic knowledge of all the aspects that can influence the prices of shares, and it can be gathered by reading books regularly.
Skills #1 and #2 – Research and Analysis. ...
Skill #3 – Adapting Your Market Analysis to Changing Market Conditions. ...
Skill #4 – Staying in the Game. ...
Skills #5 and #6 – Discipline and Patience. ...
Bonus Skill #7 – Record Keeping. ...
In the End.
What you need to become a successful trader?here we have discussed what are the important things that you will need to become a successful trader.
1. Techinical Analysis Skill: Understanding the chart behaviour;
Price
Volume
Support and resistance
Trendlines
2. Risk Capability
How much money you can afford to lose on a single order, and on a single day.
3. Peace of Mind
Are you having a thought that might disturb your trade making decision. You must
have a calm and peaceful mind for being a successful trader.
4. Trade Managment
Trade management is the skill that gives you the power to make intelligent
decisions based on the analysis of which point is the best point to enter and
exit from the trade.
Why BEAR-TRAP occurs? How to Avoid and Trade a BEAR-TRAP?What is a BEAR-TRAP?
--> BEAR-TRAP is a condition in the market where the Price gives a Breakdown below a Potential Support zone but quickly Reverses back above the Support without giving a follow up bearish candle.
Why a BEAR-TRAP occurs?
--> Big Players who are bullish on a specific stock would be wanting to buy a big quantity of shares at the best price , but there will be no enough sellers . Hence All Buy Orders of Big Players would not get filled. so what's the solution?
--> Big Players know that the Retailers have maximum of their StopLoss order's just below the Support.
--> Big Players will place Contra-Short Trades and will trigger the Stop-Loss Orders of the Retailers turning them into a Seller .Hence All Buy Orders of Big Players will get filled. .
--> New Breakdown Traders place Fresh Short-Sell Orders looking at the Breakdown and if its a F&O stock , Call-Sellers open new positions at ATM (At the money) Strikes. .
--> Now as All Buy Orders of Big Players got filled. . BIg players aggressively start moving the price up and trigger the Stop-Loss Orders of the New Breakdown Traders and Call-Sellers who entered looking at the Breakdown which ,again shoots up the price.
-->Hence All Bears are been Trapped.
How to avoid a BEAR-TRAP ?
--> Look at the Volumes on the Breakdown ! If the Volumes are Low , It is probably a Fake Breakdown! .
--> Wait for a follow up Bearish- Candle after the Breakdown Candle! i.e Take a entry only when the Low of the Breakdown-Candle breaks.
--> Check out if there is a significant Long-Unwinding if its a F&O stock.
How to trade a BEAR-TRAP ?
-->Check out for a Reversal Pattern soon after the Breakdown. Eg: Bullish Engulfing, Bullish Harami, Bullish Piercing .etc
--> This Reversal Candle Stick must close above the support.
-->Enter a Long Position above the high of this reversal candle .
Real Example!
--> NSE:POWERGRID was trading within a Rising Channel .
--> POWERGRID gave a Rising Channel Breakdown below 196 and gave a daily closing at 191. Perfect breakdown right?
-->Breakdown Traders entered here keeping their Stoploss above the POC or just above Psycological level 200. and Call Sellers would have Shorted the POWERGRID 200 CE STRIKE .
--> Check out the volumes on breakdown! Its very very low signifying its a Fake Breakdown.
--> POWERGRID on the following day made a Bullish Above Stomach Candlestick pattern and gave a closing above the support level 196.
-->Perfect Buy would be on 1HR Closing above the support level 196 on the next day.
-->Boom! Price made an Impulsive Movement after it triggered all the StopLoss Orders placed at Psycological level 200 by the Breakdown Traders and also due to the Short Covering at 200 CE STRIKE .
--> Wasn't it a perfect BEAR-TRAP Trade?
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A SYMMETRICAL TRIANGLE TRAP VARIATIONTriangles are one of the best continuation patterns. They are normally seen in the middle of a trend as the price halts and rebuild energy to resume in the direction of prevailing trend.
In this particular variation shown on the chart, the price breaks against the trend. It would look like as if the pattern is about to fail but the breakdown ends up in a trap. It traps most short sellers on the wrong side of the market at 6. The price then shoots up with strong momentum leaving no choice for the short sellers than to cover their positions. So instead of only breakout buyers at 7, the variation will also trigger buy orders of trapped short traders. Due to large number of buy orders at 7 the price shoots up pretty fast without any major pullbacks.
Its always good to keep such a strong weapons in your quiver and strike whenever the opportunity knocks.
It needs to be pointed here that the pattern will lose its worth as the price drifts closer to the Apex. As a rule of thumb, If the price is beyond 3/4th the length of the triangle, as shown on the chart, the pattern should be traded with caution. If the price has drifted up to the Apex, then ignore the pattern and move on to a next one.
The target for the triangle should be the height of the triangle from 1 to 2. This length measured above 7 will give us the target.
Ex. If the distance between 1 to 2 is 50 points and the breakout 7 happens at say 550, then target will be 550+50 = 600 (just an example). This is a conservative approach. Some trades would like to hold it and trail their stop loss until they get stopped out. It all depends upon one's trading style.
I hope the post would catch your interest.
Do like and comment for more educational ideas in future.
Regards
JJSingh
what type of trader🕵️♀️ are you ?✨SCALPING TRADER :>
The main advantage of scalping is the ability to gain profit from small price changes within the shortest time frame possible, which is often amplified by a larger position size. This is an intra-day type of trading which means that positions are closed before the end of the trading day or session
✨DAY TRADER :>
A day trader buys and subsequently sells financial instruments within the same trading day, which means all the positions that he creates are closed on the same trading day. Due to the short-term nature of day trading, there is less risk involved in it as there’s no risk of something happening overnight to cause a big loss.
✨SWING TRADER :>
Swing Trading is a strategy that focuses on taking smaller gains in short term trends and cutting losses quicker. The gains might be smaller, but done consistently over time they can compound into excellent annual returns. Swing Trading positions are usually held a few days to a couple of weeks, but can be held longer.
disclaimer - personal view
4 MOST COMMON TRADING PERSONALITIES 1.The Quick and Silent Sniper-
The sniper is a trader who has a lot of patience, who sits quietly and waits. At their side are the predefined perfect conditions for entry and exit. The sniper waits and waits for specific levels.
*2. The Scalper-
This type of trader is very aggressive.
They find themselves in many intermediate levels in the range of the rally cycle and often try to exploit and take advantage of many trades, expecting to make low profits.
*3. The Artillery* Barrager -
Bust out the big and loud guns for these guys.
These are traders who go with trial and error and just put as much out there as possible. They go on a specific level and then try multiple entries around key levels until it works.
*4. The Hobo ( or Trainhopper )-*
Imagine you’re in the wild west at a train station. A train just began to leave when you see someone run up alongside it with their bags slung over their shoulder.
The train speeds up, but they manage to toss their belongings in an open door. They pick up speed and haul themselves in as well.
disclaimer - shared whats read and learnt