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How to Journal as a Trader or Investor on Trading View ? Summary of this video There could be Two types of people Journaling, one who is daily journaling and one who is weekly journaling; both will do the job. You can make two notebooks for the same: Feelings-based Journal and Stats-based Journaling. Both serve different purposes. A feeling-based journal helps you to create a daily habit of writing some compulsory things like pre-market, vix, post-market, and setups, and ask why in terms of positions - if taken and if not taken, whereas to get into the habit of writing a feelings based journal also dig deep into some really important terms like cpi inflation, ppi of some significant economies which effects your markets. These things won't affect your trading, but such add-ons help you give a direction to your journaling power. A Stats-based journal contains different columns, as told in the video; feel free to add more of your favorite ones and change them as you wish, but every single trade should be respected in such a manner. Journal every single trade like this in terms of numbers. Remars is very important in this journal as it will guide your Fear and Greed. In conclusion, Finally, if you can do this for at least one month, you will see good results, but what exactly do you have to see? After one month, read your first-day feeling journal and the first two or three trade remarks. You will be amazed to see how silly mistakes you made in the past or how efficient you were back then and now you are making those mistakes; either will help you grow in mindset and profitability. It enables you to become a better trader by 1% daily. Feel free to put more ideas and thoughts below in the comment section. Good luck journaling
NSE:SBINEducation
by Averoy_Apoorv_Analysis
2
Rahul's Road to Recovery: Battling Overtrading"Rahul's Redemption: Overcoming the Pitfalls of Overtrading" Once upon a time, in the bustling city of Mumbai, there lived a man named Rahul. Passionate about trading, Rahul was determined to make a fortune in the stock market. However, as the saying goes, "Too much of a good thing can be bad," Rahul found himself entangled in the web of overtrading. Rahul's journey began with zeal and promise, but his desire for quick gains led him down a perilous path. He succumbed to the allure of constant market action, making trades impulsively and without a solid strategy. The euphoria of potential profits clouded his judgment, and soon, the losses began to accumulate. In the depths of despair, Rahul realized he needed help. He turned to a mentor, an experienced trader named Aman, who empathized with his predicament. Aman had walked a similar path in his early days and understood the challenges Rahul faced. The Turning Point: Aman became Rahul's guiding light. He emphasized the importance of discipline and the dangers of overtrading. Together, they analyzed Rahul's past mistakes, identifying the triggers that led to impulsive decisions. Problem and Solution for Overtrading: - Problem: Overtrading occurs when a trader executes excessive transactions, often driven by emotions or the need to be constantly active in the market. - Solution: 1. Establish a Trading Plan: Define clear entry and exit points, risk tolerance, and profit targets before entering a trade. 2. Set Realistic Goals: Avoid the temptation of unrealistic profit expectations. Focus on consistent, sustainable growth. 3. Use Stop-Loss Orders: Implementing stop-loss orders helps limit potential losses and prevents emotional decision-making. 4. Regularly Review Trades: Analyze past trades to identify patterns and learn from mistakes. Keep a trading journal for self-reflection. With Aman's guidance, Rahul began to put these solutions into practice. He committed to sticking to his trading plan, embracing patience, and avoiding the impulsive urge to trade excessively. The Moral of the Story: Rahul's journey teaches us that setbacks are a part of the trading game, but learning from mistakes and seeking guidance can lead to redemption. The moral of the story is that discipline, a well-defined strategy, and mentorship are invaluable tools for overcoming the pitfalls of overtrading. As days turned into weeks and weeks into months, Rahul's efforts bore fruit. His trading approach became more disciplined, and he started to see consistent profits. The story of Rahul's redemption serves as an inspiration for every trader navigating the turbulent waters of the stock market. Remember, in the world of trading, it's not about the frequency of trades; it's about making the right trades at the right time.
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BSE:SENSEXEducation
by iamrk7
3
The Jan to Dec of Technical Analysis - 1 strategy per month1. January - The Value at Play Before we start discussing the different technical chart patterns, we need to have some clarity on how buying and selling happens on stocks and options. Every trade has a buyer or seller. That means at a specific point in time, for a specific price there are 2 conflicting thoughts Someone who thinks the price is too cheap Someone who thinks the price is damn expensive The guy who thinks the stock/option is cheap is ready to buy and the guy who thinks it is expensive and it is a good time to sell. Just think, how is it that two people can have conflicting mindsets about the same instrument at the same time? I am 100% sure that both of them cannot be right, one of them is making a wrong decision. Over time - 5 minutes, 50 minutes, 5 hours, 50 hours, 5 days, 50 days, or 500 days - whatever the period be, that particular instrument will tick away from the quoted price - either move up or move down. This leads to the important question - what is the fair value? If you have an internal price gauging mechanism - you can quickly calculate if the price quoted is below or above the fair value. Wow, that looks exciting - can you give me the shortcut to calculate the fair price? Unfortunately, there is no holy grail that does it for you, over time you need to develop that tool or spreadsheet. Have you heard the saying, “Veterans are good stock pickers” - It is mainly because of their experience in the markets. They have developed the intuition to guess the fair value when they see the ticker tape without relying on a spreadsheet or calculator. The first rule is “Never buy anything at a premium and never sell anything at a discount”. This rule does not guarantee that you will not lose money - but it is a filter that weeds out poor decision-making. The question arises - how do I calculate the fair price of a stock or options strike? A good place to start would be to start reading “The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit (Little Books. Big Profits) by Aswath Damodaran” - you can even finish the book in 2 straight hours. It gives some insights into valuation techniques. Most valuation methods available in the markets are part of “Fundamental Analysis”, you might ask me - “What does that have to do with Technical Analysis?”. My answer is everything. Technical Analysis is the process of guessing the future price by looking at the historical data. But what the stock/option has to do with the price today is mostly due to fundamental reasons. A mix of fundamental + technical study is much better than pure fundamental or pure technical analysis. These days lot of people have turned to options trading as a side gig to make some extra money. Someone would have told them, that it is easy to make money in options trading. The biggest mistake they make would be to short-sell a strike too cheap and buy a strike too pricey. Option premiums do not move in a linear pattern and are totally different from the valuation techniques used to gauge the underlying. If you are able to calculate the fair value of a particular strike with some level of accuracy - then you can avoid selling it cheap and buying it pricey. More often than not, not taking a trade would be the best trade there is. If something is way above your price level, choose not to buy. If way below, choose not to sell. Have faith that a better opportunity will come and gather the courage to skip the trade. There are 2 option types - CALLS and PUTS. The option strikes above the current trading price are called CALLS and the strikes below the price are called PUTS. The premiums of these far-away strikes are not that easy to calculate or guess, mainly because the prices are derived by a few factors like price movements, time, level of uncertainty & the interest rates in the markets. This makes options trading like a double-edged sword. You get it right - it will reward you more than you can imagine. You get it wrong - it will take away what you have and more. I think hard guessing the fair value of a particular strike of a stock or index is 10 times more complicated than assessing the intrinsic value of that index/stock. This means if you took 15mts to find out the fair value of say “PQR” stock, you might take 150+ minutes to assess the price of a strike say 2600 CE when PQR is trading at 2500. The challenge here is that, once you calculate the fair price - the goal post would have shifted. A change in time will affect the strike prices as “time” is a variable that contributes to its value - so it is a moving target. Now tell me, what would you call someone when they say “Options trading is easy”, “You can make 100000 in 1 month with just Rs1000 capital”, “100% guaranteed success in options trading…” etc. The next thing to know is the difference between trading and investing. Both are tools intended to make money but the main difference is the “time” component. Investing is usually done with no particular “time” value in mind whereas trading is done for a specific “time period”. That is why you hear people say, I have bought “XYZ” stock for the long term - Even if it appreciates in price say 10% in 10 days, the investor may not sell it. Partly because they do not want to miss out on further gains after selling. On the other hand, trading is done with a specific time frame in mind. The trader is only worried about the prices during that window. What happens after that is none of this botheration. The fear of missing out seldom affects the trader because they know their next opportunity will come if they keep looking. Time has more relevance & weightage than you can possibly imagine. In fact, price is relative to time and it is not the other way around. You can physically measure this concept in options trading wherein strikes go to zero value on the expiry date. The major index options have weekly expiry and the stock options have monthly expiry. So a particular strike will go from “X” value to “0” value in a week. Also important to note that during this lifecycle the strike could swing between X to 4X to 100X to 0.5X to 0.2X and end at 0 after the expiry. The prices of a strike are much more volatile than their underlying - this is the main reason options trading is a double-edged sword. Generally, people do not respect time. Most of them respect money more than time. The decisions they make are usually to save money even if it means to waste time. If you are into stock markets - that should change. Even though your purpose is to make money - you should give the due credit to the “time factor”. Let me explain with an example. A trader buys 100 qty of ABC at 1500 intending to sell it at 1600 once the results are out. If on the results day the prices drop to 1400 - that trader will say “Let me not book the loss, I will hold it for some more time for the prices to recover”. In this particular instance, the trader is not ready to book the loss but hoping that his money will recover. Most long-term investors are traders who forget to close their trades. A trader has to have a 180-degree opposite mindset of an investor because we are playing with limited resources. If your money is blocked on a particular trade for a period longer than your calculation - then it is 100% true that you will not be able to take another trade when there is an opportunity. No trader in the world has unlimited resources and unlimited leverage but all of them have got the exact same amount of time per day. If you know how to manage the time - the money will find a way. This comes to the final segment of this chapter - “Value at Play”. It means the amount of money adjusted for the time factor to the reward it brings in. You might be familiar with the word “Value at Risk” (VaR). Value at Play is something similar but not measured in the same way. .... to be continued...
TVC:SPXEducation
by viswaram
How TradingView is redefining the chart-analytics spaceIf you are a stock or options trader, you might not have taken the trade without analyzing the charts. Gone are those days when traders punch orders just by looking at the prices. All professional traders prefer to take the shot after viewing the chart and that too after analyzing multiple timeframes. There is one player who has made a heck of a difference in this space, it's TradingView (TV). When I started trading in 2010, I used the broker’s chart platform - it was okay, but I did not know what was missing. Later I switched to a new gen broker and for a while, I was stuck with the ChartIQ platform which the broker provided free of cost. I had heard TradingView’s name then, and also visited their website and compared the plans. I thought, who in their senses would opt for a paid plan of TV when the broker is providing it free of cost? I said to myself - I would never pay for it. Back then I had 5 to 7 indicators on my chart - MACD, Bollinger bands, RSI, EMAs, ADX-DMI, SuperTrend to name a few and my chart was pretty complicated. Just like a handwritten prescription by the doctor, I could not even read what came out from my chart. And predictably the streak of loss-making trades continued. Time passed and maybe I got mature enough to realize that the indicators were not the issue, my interpretation was. The first thing I did was to switch to the free plan of TV. Since it had a limitation of 3 indicators per plan - I had to narrow down my selection of indicators. I was left with 2 EMAs and 1 ADX-DMI that I could use with the free plan. And that restriction became a blessing, my charts were not crowded anymore & the price stood out loud and clear. My loss-making days ended there and I possibly matured as a trader. I did not switch to TV’s paid plan then - because I had no special need for it. That restriction of 3 indicators was what worked for me, a blessing in disguise. Early this year, I switched to one of their platinum brokers - Dhan . This was to get my webhooks experimentation going and it required me to upgrade to a paid plan of TV. Even though I was hesitant, I took that leap of faith and upgraded. Seems like that was the 2nd best decision that I took this year, after switching the broker. Few additional things come to you when you take a paid plan. I got access to add more watchlists and segregate them by themes. One of my recently added watchlists contains more than 249 stocks which I analyze over the weekends. These companies are with Mcap less than 3000 crores and I secretly believe 10 of them could become multibaggers over the next decade. Weeding them out is a pain though. There are 2 features TV provides even on their free plan. Publish Idea Minds Publish Idea - This is where you share your chart, analysis, or idea with the public. You need not be a professional chartist to do it - you can start at an amateur level. As your work inspires others and helps them in their trading, you start gaining their respect. Few of them may even follow you and subscribe to your ideas. You get to choose the directional bias too. If you are long on a scrip, you can mark the “long” green colored button on the last page. If you are bearish, you could select the “short” red button. Minds - TV Minds is a new feature that they introduced, it is like a room where you post commentary while trading. Other traders who are watching the same chart as yours can view, and comment on your mind and it can get pretty interactive. Once posted, it will appear on your public page under the “minds” navigation. I love both these features as they immediately notify your followers via email too. TV minds give the exact feeling of entering a trading room. You get to interact with the experts, take their opinions, and debate a bit. I am not quite sure if these can be done via their mobile app, I use it on their desktop version. And it may take a while for real deep penetration as the majority of traders in India are on a mobile device. What is the feature you liked about TradingView the most?
NSE:NIFTYEducation
by viswaram
DATA TRADING PART 2 BY PROFESSION'S 👑👑Royal Trend👑 what is data trading ? DATA-Trading is like a GPS system while you navigate the treacherous Ups and Downs of the markets. DATA is your guide to gain knowledge and make better decisions in the markets. Topic Trading Things Topic - Option Trade and Trading 💸💸💸💸👑🤑 #If u Buy stock without stop loss that mean U are weak in Physiology #Train Your self To take small trade with Stop-loss How to make Big Profit💸 With Small Account In this video we try to Identify Trend and Entry By Big Bull👑🤑🤑💸💸 How market really work with number's How important is option chain analysis? The option chain analysis data provides a very comprehensive view for all the available options for any particular underlying asset. This helps in understanding and selecting the correct option for trading or investment purpose. Difference between technical analysis and option trading Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. why we learn option chain? Option chain is a chart that will give in-depth information related to all stock contracts available for Nifty stocks. The best thing about the option chain is that it provides valuable information about the current security value and how it will affect it in the long term. What is the purpose of option chain? It can be used in creating an option strategy at several strike prices. It can be used to analyse and draw noteworthy insights about the stock and its probable movements. It helps the traders in evaluating the liquidity and the depth of the option contract. Technical trader ​Technical trading is a broader style that is not necessarily limited to trading. Generally, a technician uses historical patterns of trading data to predict what might happen to stocks in the future. This is the same method practiced by economists and meteorologists: looking to the past for insight into the future. NOTE #We Are Not Promote Anything #This channel Purpose to share market ideas. Thanks for Watching🙏
NSE:BANKNIFTYEducation
by Optionclub
How to make Big Profit💸 With Small Account👑🤑💸By Big Bulls💸👑Royal Trend👑 Topic Trading Things How to make Big Profit💸 With Small Account In this video we try to Identify Trend and Entry By Big Bull👑🤑🤑💸💸 How market really work with number's How important is option chain analysis? The option chain analysis data provides a very comprehensive view for all the available options for any particular underlying asset. This helps in understanding and selecting the correct option for trading or investment purpose. Difference between technical analysis and option trading Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. why we learn option chain? Option chain is a chart that will give in-depth information related to all stock contracts available for Nifty stocks. The best thing about the option chain is that it provides valuable information about the current security value and how it will affect it in the long term. What is the purpose of option chain? It can be used in creating an option strategy at several strike prices. It can be used to analyse and draw noteworthy insights about the stock and its probable movements. It helps the traders in evaluating the liquidity and the depth of the option contract. Technical trader ​Technical trading is a broader style that is not necessarily limited to trading. Generally, a technician uses historical patterns of trading data to predict what might happen to stocks in the future. This is the same method practiced by economists and meteorologists: looking to the past for insight into the future. NOTE #We Are Not Promote Anything #This channel Purpose to share market ideas. Thanks for Watching🙏
NSE:HDFCBANKEducation
by Optionclub
1
Reversal Chart Pattern: WedgeWhat this chart pattern shows us is a loss of trend strength and a deceleration in price movement. The most achievable projection for setting our take profit will be the maximum width of the pattern, which occurs at the beginning of it. Alternatively, you can take the level that marks the start of the correction as a profit-taking point. As for the stop-loss level, it will depend on the type of entry made in the trade, whether it's a high-risk entry or a reduced-risk entry. (Like any other pattern or indicator, this one provides a signal of a possible market move. Therefore, the greater the number of confluences, the higher the probability that the observed scenario will occur). 💼💹 (🇮🇳)
Education
by JRiquelmeTrading
How to Trade in Options By Big Bull👑👑Royal Trade👑 Hello Guys in This Video We share How to Trade in Option's Market. Difference between technical analysis and option trading Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. why we learn option chain? Option chain is a chart that will give in-depth information related to all stock contracts available for Nifty stocks. The best thing about the option chain is that it provides valuable information about the current security value and how it will affect it in the long term. What is the purpose of option chain? It can be used in creating an option strategy at several strike prices. It can be used to analyse and draw noteworthy insights about the stock and its probable movements. It helps the traders in evaluating the liquidity and the depth of the option contract. How important is option chain analysis? The option chain analysis data provides a very comprehensive view for all the available options for any particular underlying asset. This helps in understanding and selecting the correct option for trading or investment purpose. NOTE #We Are Not Promote Anything #This channel Purpose to share market ideas. Thanks for Watching🙏
NSE:RELIANCEEducation
by Optionclub
EURUSD Journal entryNote : I am Learning student of ICT trading journal help you to build your basic foundation so if you are learning ICT concepts so you have to do this every single day.. may this example help you (All credit go to ICT only i am his student) So if you are forex trader annotate your DXY \ EURUSD \ GBPUSD chart every day with Your Daily | H1 | M15 chart for next 3 months to build your understanding about how price flow move Note :: Always have narrative and short term bias in your mind for more detail Watch ICT Month 5 , 6 , 7 , 12 And video of ICT from Core content (what to focus on)
Education
by IBT_A
How To Trade in Option's Market By 👑Royal Trade👑 👑Royal Trade👑 Hello Guys in This Video We share How to Trade in Option's Market. Difference between technical analysis and option trading Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. why we learn option chain? Option chain is a chart that will give in-depth information related to all stock contracts available for Nifty stocks. The best thing about the option chain is that it provides valuable information about the current security value and how it will affect it in the long term. What is the purpose of option chain? It can be used in creating an option strategy at several strike prices. It can be used to analyse and draw noteworthy insights about the stock and its probable movements. It helps the traders in evaluating the liquidity and the depth of the option contract. How important is option chain analysis? The option chain analysis data provides a very comprehensive view for all the available options for any particular underlying asset. This helps in understanding and selecting the correct option for trading or investment purpose. NOTE #We Are Not Promote Anything #This channel Purpose to share market ideas. Thanks for Watching🙏
NSE:BANKNIFTYEducation
by Optionclub
2
Support and Resistance- Flipping Roles⚡In simple terms, support is a level where demand overcomes supply, while resistance is a level where supply overcomes demand. In the market, different types of traders participate, and I have broadly categorized them into four groups based on their behavior. ⚡You may have heard that once a support level is broken, it tends to act as a resistance level, and vice versa. This phenomenon occurs because the roles of support and resistance flip, influenced by the psychology of traders at these levels. ⚡Let's illustrate this with an example. Consider Group A, a set of buyers who bought a stock at 80. The stock price rises to 100 but faces some resistance. At this point, Group B, consisting of short sellers, enters the market and starts selling the stock near 100, with their stop-loss orders placed just above 100. Thus there is supply present at this level. ⚡The price consolidates within a narrow range and eventually breaks out above 100. Group A is delighted as they bought at a good price, but Group B becomes unhappy. Some members of Group B exit the trade as their stop-loss orders get triggered, while others continue to hold in hope of a favorable outcome. ⚡Now, another group of traders, Group C, known as breakout traders, becomes active above 100. Their buy orders, combined with the buy-stop orders from Group B, add momentum to the upward movement, pushing the price up to 110. ⚡As the buying pressure eases, and short-term traders take profits, the market starts to pull back, eventually reaching the old resistance area around 100. ⚡Many pullback traders look for buying opportunities near this level. Additionally, members of Group B, who shorted at 100, realize their mistake and start buying to close their short positions at breakeven. Some of them also reverse their positions. Other buyers who were waiting on the sidelines also start entering the market. All these buy orders create a strong demand. ⚡Notice that once there was significant supply at 100 and now there is significant demand. If this demand is substantial enough, the price resumes its upward movement, illustrating how changes in market sentiment impact a participant's psychology and consequently affect the nature of support and resistance levels. ⚡The reverse is true for how a support level, once broken down, turns into a resistance level. ⚡I hope you found this tutorial helpful. Please stay tuned for more educational content in the future. Feel free to show your support by liking this post. Disclaimer: Practical knowledge
NSE:NIFTYEducation
by Bravetotrade
15
Candlestick pattern: 1 Hour RetraceThe 1 Hour Retrace pattern is a candlestick formation with great potential for success and strength. This pattern originates after a false breakout of the level in which the price is contained, for example, in a channel. The beginning of this pattern occurs when one of the candles breaks outside the levels that contain the price and, subsequently, the next candle forcefully returns inside the pattern, closing within it. This indicates a false breakout and that the new price direction was incorrect. The stronger the candle on the return, the higher the probability that the price will swing back to the previous levels before the false breakout.
BITSTAMP:ETHUSDEducation
by JRiquelmeTrading
Candlestick pattern: Bullish Triple FormationThe 'Bullish Triple Formation' is a pattern in which two large bullish candles appear, separated by three small bearish candles. These three bearish candles make new lows and are contained within the body of the first large bullish candle. This pattern occurs in an uptrend and is interpreted as a correction of the trend after an upward impulse, indicating a potential continuation of the bullish movement thereafter. It's important to note that this pattern may have variations, as instead of three candles correcting the first large bullish candle, there can be two or more than three. The reliability of this pattern is high; however, it is still a single signal that should be accompanied by others to increase the probability of success in our analysis.
NASDAQ:TSLAEducation
by JRiquelmeTrading
Metrics: Expected Value (EV)Expected Value (EV) is a statistical concept that indicates whether our trading system or strategy will yield positive, negative, or neutral results in the medium or long term. It is based on previous results. As we know, past performance does not guarantee future results, but it helps us get an idea of how it might work and allows us to base our decisions on objective terms. The formula for calculating Expected Value (EV) is as follows: Expected Value (EV) = (Win Rate * Average Win) - (Loss Rate * Average Loss) When interpreting the result, it indicates whether you will gain or lose in the medium or long term per unit of currency at risk. An example: A trader achieves an expected value of 0.5 with their trading operations. This means that every time they risk 1€ in the market, they gain 0.5€ in profit.
BITSTAMP:BTCUSDEducation
by JRiquelmeTrading
Candlestick pattern: Confirmed HammerA Hammer candlestick is a single-candle reversal pattern that indicates a potential change in the trend direction. These candles are typically characterized by a high or low that is significantly distant from the closing price, with the shadow being at least twice the size of the body. Like any candlestick pattern or analysis tool, its reliability increases with the presence of more confluences or signals. Therefore, in this case, we choose to trade this pattern when the confirmation criteria are met. However, in practice, there may be other factors to consider that could influence the decision to enter or not enter a trade. Additionally, there is another type of confirmation for this pattern. The most secure confirmation (but with less projection) would be to wait for the candle following the Hammer to close above it (in the case of a reversal to the upside). This would indicate that the rejection of continuing the current trend is genuine and that a change in direction is more likely.
PEPPERSTONE:CRYPTO30Education
by JRiquelmeTrading
#How to Trade in Option Market 💲🤑💲💸💰#We Make Only Profit. #HDFCBANK #BANKNIFTY #NIFTY50 #NIFTY #SENSEX #TATA Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. what is option ? Options are a type of derivative product that allow investors to speculate on or hedge against the volatility of an underlying stock. Options are divided into call options, which allow buyers to profit if the price of the stock increases, and put options, in which the buyer profits if the price of the stock declines. RBI Forex Reserve Grow is this Good or Bad ? 1st 140 Billion loss hua hai or ab 20 Billion Grow hua hai to hai to abi bhi loss mai Gover..t abi losss mai hai laken wo Backup bhi ready kr rhe hai take 2023 kese wjh se krab bhi jaye to economy pe zada Farak na pade..
NSE:HDFCBANKEducation
by ISL-TREND
5
Stock HeatmapHave you ever heard of a stock heatmap? 📈 It's an innovative and visually appealing tool used in the world of finance to analyze and interpret market data. Let's explore what it is and how it can be useful in your trading journey. 🌡️ What is a Stock Heatmap? A stock heatmap is a graphical representation of a large set of stocks or securities, where each individual stock is color-coded based on its performance or specific metrics. It provides a visual snapshot of the entire market or a specific sector, helping traders quickly identify trends, strengths, and weaknesses. 🔍 Utilizing Heatmaps 1️⃣ Market Analysis: Heatmaps allow you to assess the overall market sentiment and identify which stocks are performing well and which ones are underperforming. 2️⃣ Sector Analysis: By using sector-specific heatmaps, you can easily spot strong sectors and weak sectors, helping you make informed decisions about sector rotation strategies. 3️⃣ Stock Selection: Heatmaps can assist in narrowing down potential trading opportunities by highlighting stocks with significant price movements, volume surges, or specific technical indicators. 4️⃣ Risk Management: Heatmaps help you assess the risk-reward profile of different stocks, enabling you to prioritize stocks that align with your risk tolerance and investment goals. Remember, a stock heatmap should be used as a complementary tool alongside other fundamental and technical analysis techniques. It provides a dynamic and intuitive way to visualize market data, aiding in decision-making and identifying potential trading opportunities.
SP:SPXEducation
by JRiquelmeTrading
Metrics: DrawdownDrawdown is the metric used to measure the decline in a performance curve relative to a previous peak. It represents the distance between a maximum point in the capital curve and its subsequent minimum. This indicator can be visualized in relative terms (%) or absolute terms (€, $...). In my opinion, I always recommend using relative data as it makes the analysis more intuitive. From this concept arises the maximum drawdown of a strategy, which indicates the maximum percentage loss between a peak and a trough over a specific period of time. This period can range from the last month to the entire historical series, known as the drawdown from origin. Therefore, drawdown is used in the risk assessment of a system, both on its own and in combination with other related measures that provide a higher degree of information.
BITSTAMP:BTCUSDEducation
by JRiquelmeTrading
VIX vs S&P500The VIX index (officially known as the Chicago Board Options Exchange Market Volatility Index), developed by CBOE in 1993, is calculated based on the implied volatility of call and put options on the S&P500; index (SPX) over a 30-day period. The theory behind the volatility index is that if investors believe the market is going to decline, they will hedge their portfolios by buying puts (the right to sell an asset at a predetermined price before a specific expiration date). Conversely, if traders are bullish, they may not want to hedge against potential downturns. This index shows a negative correlation with the S&P500.; When there is high volatility, the VIX reaches high values and is often accompanied by declines in the S&P500;, indicating fear and pessimism in the market. These events often lead to significant movements in the stock markets. Conversely, when the VIX is at lows, there is confidence in the market and movements are smoother. Relevant VIX levels: VIX<20: Investor confidence. Often coincides with bullish periods for the S&P500.; 2030: Increased investor pessimism or fear. High volatility and the potential for significant downward corrections in the prices of the S&P500; and major stock indices.
TVC:VIXEducation
by JRiquelmeTrading
Candlestick pattern: Shooting starShooting Star is a bearish candlestick reversal pattern. It signifies the end of an uptrend and the potential start of a downtrend. Its opposite is the Morning Star. When analyzing this pattern, we should observe if the confirming candle closes within the lower third of the range formed. This condition acts as a filter when deciding whether to initiate a trade or not. This filter makes sense because a stronger confirming candle indicates greater rejection of the uptrend continuation, thus increasing the likelihood of the pattern's success and the formation of a new downtrend. On the other hand, if the confirming candle does not close below two-thirds of the range formed, it could indicate weakness in the direction of the trend and decrease the probability of the start of a new downtrend.
NASDAQ:AAPLEducation
by JRiquelmeTrading
Correlation between different assetsCorrelation is a measure that establishes the degree of relationship between different assets. It is measured on a scale of +100% to -100%. In the case of a +100% correlation (perfect positive correlation), both assets move in an identical manner in the market. Conversely, if the correlation is -100% (perfect negative correlation), we are talking about two assets that move in an exactly opposite manner. Correlation is a crucial measure to consider because not being aware of the correlations between assets could inadvertently increase our risk. For example, if we open a sell position in NDJPY and another with the same lot size in NZDUSD based on an analysis conducted on the 4H timeframe, we would be multiplying our risk by 2 due to the high correlation between both assets in that timeframe (88%). The correct way to handle this situation may be to either reduce the risk of both trades by half or only trade the pair with a clearer scenario in your analysis.
BITSTAMP:BTCUSDEducation
by JRiquelmeTrading