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123 Reversal Pattern Trading23 reversal setup is a basic on-chart formation, that warns about upcoming trend reversal. Setup The 123-chart pattern is a three-wave formation, where every move reaches a pivot point. This is where the name of the pattern comes from, the 1-2-3 pivot points. 123 pattern works in both directions. In the first case, a bullish trend turns into a bearish one. And the second picture presents the opposite, a bearish trend turns into a bullish one. The structure of 123 chart pattern The pattern appears after three price movements, which form three pivot points and a confirmation level. Pivot point 1. This is a turning point that the price formed during the trend. If a price breaks the previous trendline after it formed pivot point 1, the pattern will be more reliable. Pivot point 2. The next turning point is very likely to form outside of the previous trendline or channel. This is a good indication that the trend might be ready to end and reverse. Pivot point 3. Pivot point 3 is crucial for 123 reversal chart patterns. The point must not exceed the pivot point 1 (in the worst case it might be on the same level) for the pattern to be valid. Confirmation level The confirmation level is our entry point in the market. It is located at the same level as pivot point 2. When price breaks through this level open the trade. Target level To set the target trader needs to connect 1 and 3 pivot points with a line. The size of your 123 pattern equals the vertical distance between Line 2 (which is a horizontal line at the level of 2 pivot point) and the midpoint of Line 1. 123 chart pattern stop loss setup It is highly important to use stop loss when trading the 123 chart pattern. The stop loss should be set under pivot point 3 in the bullish trend reversal, and above in the bearish one. In the condition of high market volatility, the price might get pushed beyond the 2 pivot point for a while. That’s why it will be a good idea to set stop-loss slightly beyond the 3 pivot point, as this will prevent stop loss from being activated. The target level of 123 continuation pattern The target of the “continuation 123 pattern” measures the same way as usual. The only exception is that in this case, you should take pivot point 3 as a starting one of your target.
NSE:RELIANCEEducation
by SPTradingDesk
Gap up / gap down intraday strategy with simple entry / exitI get queries from a lot of people who don't want to study technical analysis much. They're just focused on getting a predefined trading strategy, which they can use effectively in the market without looking much at the charts . So, in this video, I share a strategy which has been given really good results and it works a lot of times and I believe the probability of this particular strategy is close to around 65 to 70%. It has simple entry and exit rules, and you can only apply this particular strategy when the market opens gap up or gap down. See, whenever the market opens gap up or gap down, there is high volatile period of the market during the beginning half an hour or an hour. And in that period of time,if you place a trade, then you have a good probability if market moves as per expectation. As you can see these days, nifty and back nifty have been creating gap up and gap down opening almost on a daily basis. In this case, the first rule is that if the market opens gap up by more than half a percent. So for example, if bank nifty opens gap up by more then 200 points. , then only you can apply this strategy. And on the other hand, if nifty opens gap up or gap down by more than 50 or 60 points, then only you should think of applying this particular strategy. Small gaps do not count in this strategy. So if bank nifty gaps down or gaps up by only 50- 60 points, then avoid this strategy altogether. See, whenever the market is opening gap up or gap down, there are two possibilities. The market might continue the current trend. For example, if the market opens gap up, the chances are that the market might move higher, or the other possibility is that the market might go sideways the whole day. So ,in this case, whenever you see the market opening gap up or gap down by more than half a percent, just have to follow this simple procedure. Just plot the 15 minute chart with a 20 exponential moving average. Why 20 exponential moving average because the market usually gets good support and resistance around the 20 moving average. You can expect the market to stall around the moving average for a lot of times if you take a trade. So ,you just have to plot the 15 minute chart, and if the market gaps up or gaps down, you just have to watch the first 15 minute candle. So if the market opens gap up and it forms a bullish candle. Then , what you can do is you can sell puts if price breaks the first 15M candle high. You can sell puts with the stop loss at the low of the candle. If the market comes below the low of the candlestick the first 15 minute bar, then you exit your position and book the loss. Why sell puts? The idea behind selling puts is that during the first 15-30 minutes, the volatility is on a very higher side during that period. And if at that point of time you start to sell options, then with the passage of time, as the market starts to move sideways, the volatility reduces. And, what occurs is a concept called IV Crush. The volatility starts to reduce very quickly and that will give you a benefit if you sell a put, even if the market goes sideways. So for example, the market formed a very big bullish candle, and the criteria is if it crosses the high of the candle ,sell puts . So, the whole day, if the market is moving sideways/upwards , the volatility crush will start to happen. And with the passage of time, you'll start to see the benefit of the IV Crush and the time decay. So this is a very handy strategy which you can apply. Always remember, keep the stop loss below of the first 15M candle. It's a very effective technique, and it's based upon gap openings. And ,the first 15 minutes usually tell us who is on the stronger side, who's winning , buyers or sellers. So make sure the gap is big and whatever bar is being formed in the first 15 minutes. If the bar is bullish, you sell a put If the price crosses the high of that candle stick, and stop plus below the low of that candlestick. It's an effective rule based strategy and you can back test it on nifty and bank nifty. And you can also check its reliability, its effectiveness, you can also add this particular strategy in your tool kit. So I hope this strategy will provide some sort of value to you in your trading. And if you find the video helpful, don't forget to like this and share it and also comment your thoughts. Thank you very much and take care.
Editors' picks
NSE:BANKNIFTYEducation
by piyushrawtani
26
How to create high quality trade ideas?Hey everyone! 👋 This week, we will be taking a look at the ingredients that go into creating and posting high-quality trade ideas. While many think that a good trade idea begins and ends with finding a high probability chart setup in a liquid, volatile asset, the *best* trade ideas often combine multiple disciplines - which could include macroeconomic analysis, fundamental analysis, technical analysis, or some combination therein - into one cohesive unit. Getting in the habit of incorporating all of these factors into your thought process can lead to much higher quality setups, whether or not you choose to share them with the community. Let’s jump in! There are a couple of questions that you should ask yourself when trying to come up with high-quality ideas, and they boil down to the familiar five: Who, What, Where, When, and Why. Let's start with Who. WHO: Who is this trade idea meant for? When posting a trade idea, don’t assume that the idea is one-size-fits-all. The most obvious way TradingView helps in this regard is by categorizing posts by asset class, so FX traders are looking mostly at FX ideas, and crypto investors aren’t constantly exposed to commodity futures spreads. However, there are more subtle ways this happens as well. Different traders and investors often have different styles of trading, and so even within a single asset class, a long-term investment idea may not be applicable to a short-term trader. When creating a trade idea, it may make sense to identify to readers (and yourself) who this idea is for, and within what strategy it might best fit. WHAT: Most ideas do a great job at answering this question! It’s very simple: at its core, what does this idea want to do? Whether that idea boils down to shorting the stock market or building a long/short cryptocurrency spread, make sure that your idea clearly identifies what the core thrust of the trade is. WHY: This is the crux of any good trade idea. Why should someone commit capital and risk money according to your vision? It is common for traders, especially new traders, to think that answering this question comes down to building up a confluence of price patterns, indicators, and chart drawings until they line up and it is all systems go. In some cases, this serves as a reasonable answer to the “why” question - especially when assets have strong momentum. However, oftentimes this approach may not go deep enough. What if the long technical setup on your chart is in a stock where the company’s business outlook is worsening? What if the descending triangle you’re looking at trading occurs within a larger bull market? This is where incorporating multiple disciplines, whether it’s fundamental analysis or macroeconomic understanding, can improve the quality of your trade ideas. Understanding some of the context surrounding the asset you’re trading can serve to layer probability in your favor. Here’s the bottom line: the current price in any market is a reflection of the consensus view of the future. It’s important to illustrate *why* that pricing might be materially incorrect. WHERE / WHEN: It’s important to illustrate why *right now* is the right time to act on the idea, and this is where technicals can come in very handy. Broadly speaking, fundamental data on most assets only comes out once every couple of weeks, if that. It’s even longer between fundamental data releases for stocks. Because of this, utilizing price patterns, indicators, candlestick charting, and other technical analysis can be extremely helpful in defining risk, pinpointing entries, and trading more efficiently overall. This is also where clean charting comes in. It’s important to identify how trader positioning, supply and demand zones, and other factors (that technicals help illustrate) affect the timing and risk of the idea. In addition, when publishing an idea on TradingView, the chart is one of the most visible and prevalent ways of communicating this information. Making these items clearly defined can significantly improve the quality of a trading idea and ensure clear communication of the important information. So there you have it - the key questions that are at the core of any good trading idea! We look forward to seeing how this framework is incorporated into future posts. Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter and Instagram for more awesome content! 💘
Editors' picks
TVC:USOILEducation
by TradingView
4
Triangle Chart Patterns , Descending Chart PatternDescending chart pattern is a type of Triangle chart patterns . Descending chart pattern is formed when price is taking a support and forming continuous lower heights. Adequate buy or short area would be after the price gives a breakout . Descending pattern you can short or buy as well . Wait for the price to give a breakout and enter in which ever direction the breakout is given . Please Share , Follow and Like if this content was useful and you gained some knowledge.
NSE:BAJAJHLDNGEducation
by Deepak_dc93
2
Adani Gas hits the JACKPOT... Locked in 10% UPPER CIRCUIT...!!!Adani Gas CMP 105.80 On a day like today when Nifty is struggling, Adani Gas is up 10% What this reflects is 1 Every chart can have its own story.... & 2 We always hear "No one can time the market..." .Sure... There is no denying... Adani Gas took 6 days to break free... But when it did today... The result is infront of us. so if you are following levels identified with the help of Technical Analysis, you can surely be in a better position to manage your risk and when time comes you can certainly make the most of it.... Time, Patience and Discipline is all that Technical Analysis asks from us. Think about it... Charts do try to tell us a lot... Question is Are you willing to listen, learn and make the most from it..??? Take care and happy trading...!!! Do hit the LIKE button...!!!
AEducation
by indiamarketoutlook