Dow theory - 3 kinds of trend1. Primary trend (9months to 2 years)
2. Secondary trend (6 weeks to 9 months)
3. Minor trend (few days to few weeks)
> Black line is the primary trend
> Green lines are an example of a secondary trend.
> Blue lines are minor trend.
Always trade with harmony of a primary trend.
Note : only for learning.
Trend
FALLING TREND LINE
Education
Falling trend line:
Rising trend line is the type of trend line which typically helps trader in identifying the exact bearish momentum (downward trend).
The rising trend line or descending trend line, be connected from highest price traded within the time range, and connect to the lower prices of the asset or security.
Traders may prepare for selling after retest of the falling trend line and stop above the trend line.
It helps minimizing risk and maximizing rewards when used appropriately.
RISING TREND - EXPLAINED
Education
Rising trend line:
Rising trend line is the type of trend line which helps a trader to identify the bullish moment or bullish range (Upward Trend).
The rising trend line or ascending trend line should be connected from the last lower of the asset value to the last highest value or price of an asset.
The rising trend line should have multiple prices touched to be considered as valid, (at least 2 price point touches).
Traders may anticipate trading pullback where confirmation come, they can use additional indicators to have clear understanding of right entry point and exit points.
How to Draw Trend lines In a ChartSteps To Follow -
1- Open The Chart In DTF (Daily Time Frame)
2- Switch To Line Graph To Capture CLOSING PRICE Of Stock
3- Now Take Trend Line From Your TOOLS and Construct A Trend Line (Joinig the CLOSING PRICE of Stock)
4- After Constructing The Trend Line ( SEE ALL POSSIBLE CLOSSING PRICES IN THE CHART )
5- Now Switch to CANDLESTICK CHART
6 Now see where your stock price moving ( IF IT IS AT GOOD TRADE ABLE LEVELS THEN INITIATE YOUR TRADE AS PER YOUR SETUP )
NSE:DYNAMATECH
Trading Style verses Trading TimeframeHi all 👋
We all know about three types of trading styles -- investment, swing trading and day trading.
Yet most traders remain confused when it comes to trading timeframes. Through this post I just want to eliminate this confusion once and for all.
Let us understand some basics....
✅ Anchor Chart
This is the chart used to determine the trend of the market. It conveys a trader whether the market is in uptrend, downtrend or sideways. It sets a bias for the trader. It also conveys us the information about the major support and resistance levels. These levels may provide excellent trading opportunities in future.
✅ Trading Chart
Now that we know the trend through the Anchor chart, we have to take our trading decisions. Anchor chart is too big to take trading decisions. Reason being your stop loss would be too wide if you trade on the basis of Anchor chart, so we have to shift to a lower timeframe. This time frame is usually 4-5 times lower than the Anchor chart time frame. This lower time frame helps a trader to pinpoint his entries and decide upon his stop-loss to avoid unacceptable losses. Also minor support and resistance levels are more clear on this chart.
✅It is your trading style which determines your trading timeframe. For more clarity, refer the chart above.
⏰ Bro tip
🚩Anchor chart helps you to trade in the direction of trend.
🚩When the trend is up on the anchor chart we should look for only buy set-ups on the trading time frame.
🚩When trend is down on anchor chart, we should look for only selling opportunities on trading time frame.
🚩When trend is side ways, buy at the support and sell at the resistance.
Hope this post will be useful for some traders and to the very least reduce the confusion regarding timeframes.
Thanks for reading
@Bravetotrade
Market Trends Market Trends
If you have been started to study the price action ,you may have heard of an " Market Trends" or "Type of Trends" or "Market Cycle" . Today we are going to take a small look at the each trend, along with few examples. Later we will publish the whole trend concept.
Please remember this is an educational post to help all of our members to understand concepts used in trading or investing.
Introduction
Type of Market Trend/Cycle
1) Uptrend/Advance Market (Bullish)
2) Downtrend/Declining Market (Bearish)
3) Accumulation at Top ( Range Market)
4) Distribution at Bottom (Range Market)
Few Examples Below
1) Uptrend/Advance Market (Bullish)
Usually in the Uptrend market, the price will not break the previous support level (Higher Low), It can retest but it will not break the previous support level. If support breaks then the trend will continues toward downside
During this trend phase investor/trader become more and more bullish .
2) Downtrend/Declining Market (Bearish)
Usually in the down trend market, the price will not break the previous resistance level (Lower High), It can retest but it will not break the previous resistance level. If resistance breaks then the trend will continues toward upside
During this trend phase investor/trader become more and more bearish .
3) Accumulation at Top ( Range Market)
It is First stage of market cycle.During this phase investor/smart investor will start accumulate the position in a bounded range. This trend phase indicates that a fight between the buyers and sellers,at the end buyers will take over the seller.
Breakout Characteristics - High Volume (Demand) and Bullish Candle
4) Distribution at Bottom (Range Market)
It is Third stage of market cycle.During this phase investor/smart investor will start distribute the position in a bounded range. This trend phase indicates that a fight between the buyers and sellers,at the end sellers will take over the buyers.
Breakout Characteristics - High Volume (Supply) and Bearish Candle
Thanks for reading!
Regression Channel Linear Regression Line:
The line that fits all the data points, in stocks is considered the line where the majority of the price action is distributed.
" R Square" value
It deviates in the range of 0 to 1, the closer the value to 1, the better it is
It defines the Best fit of data.
Upper Channel Line: A line that runs parallel to the Linear Regression Line and is usually one or two standard deviations above the Linear Regression Line.
Lower Channel Line: This line runs parallel to the Linear Regression Line and is usually one or two standard deviations below the Linear Regression Line.
The upper and lower channel lines contain between themselves either 68% of all prices (if 1 standard deviation is used) or 95% of all prices (if 2 standard deviations are used). When prices break outside of the channels, either: Buy or sell opportunities are present. Or the prior trend could be ending.
Linear Regression Channel Possible Buy Signal
When the price falls below the lower channel line, and a trader expects a continuation of the trend, then a trader might consider it as a buy signal.
Linear Regression Channel Possible Sell Signal
Selling opportunity lying might occur when prices break above the upper channel line, but a continuation of the trend is expected by the trader.
Trend Reversals
When a price closes outside of the Linear Regression Channel for periods, this is often interpreted as an early signal that the past price trend may be breaking and a significant reversal might be near.
BOLLINGER BAND SQUEEZEBollinger Bands
--------------------
We all are familiar with the much popular Bollinger bands (BB). It has two bands - Upper BB and Lower BB. These bands envelope the price of an instrument and are plotted at a standard deviation level above and below a simple moving average (sma) of the price (20 sma in most cases). BBs help in determining whether the price is high or low on a relative basis.
The Squeeze
-----------------
One of the most effective way to utilize BB in a trending environment is to trade the squeeze.
In order to understand squeeze you must know what is volatility.
Volatility is simply the rate at which the price of an instrument increases or decreases over a particular period.
In other words, If the price of an instrument is fluctuating up and down very fast in a short interval of time, hitting highs and lows, it is said to be highly volatile. On the other hand, If the price is moving up or down more slowly, or is relatively stable, it is said to have low volatility.
BB works on the basis of volatility. When the volatility is higher, the BB expands and when the volatility drops to historically lower levels, the BB squeezes. John Bollinger used an indicator known as 'Band width' to measure volatility.
According to John when Band width drops to its six month lows, it leads to squeeze.
Squeeze is seen when price trades in a narrow range, or consolidates as we call it very often. Under such conditions, the UB and LB come closer to each other or pinch together. It often reminds me of watering plants with a garden pipe. We pinch the pipe so as to control the flow and increase the range of sprinkles. Same is true for BB. The pinch or squeeze (low volatility environment) leads to expansion (high volatility environment). So low volatility leads to high volatility and vice versa.
Points to be noticed before trading squeeze:
First, the price must gyrate in a narrow range for some time;
Secondly, the Band Width should drop to its six month low value;
Thirdly, expansion in the direction of the primary trend will bring the odds in your favor. Following primary trend will also help avoiding fake moves against the trend.
Above Nifty chart is a good example of squeeze on the daily timeframe. The band width value reduce to 0.02 in July 2021 from 0.09 in 2021 June. Also observe the price movement and a small fake out against the primary trend at the end of July. Finally Nifty expanded in the primary direction.
I hope you enjoyed reading.
Keep liking for more posts.
Regards
Is it a comeback of this beast?What is RSI negative divergence?
Negative divergence happens when the price of a
security is in an uptrend and a major indicator
such as relative strength index (RSI) heads
downward.
Price has fallen almost 25% from all
time high levels, it has given breakout
from the falling trend if sustained can
make a new all time high but first
price has to clear ₹ 206 levels.
How to trade with DQT, 29th Dec 2020 in NIFTYDQT is one of my indicators,
which you can find here
This is an Educational Video regarding trading Setups with the Help of this indicator,
Overview
Right from my college days I was very curious about how digital signal processing can be applied to the markets in a quantitative fashion. From my experiences in the hedge fund industry, I can relate that there is no such thing as a 100% profitable system, but there are things such as a well balanced system, which gives you a view of the market to take profitable decisions with the flow of the market because ultimately market is the king maker.
So it must be your goal to be profitable, In order to do so, you will have to have a backup of a well designed rule based system which should be profitable in the long run (as you have backtested it)!
So in Trading Alchemy!
Having a good backtested system is just the start of the project of getting into the profitable zone.
Because trading stuffs with money making money requires a lot more of effort !
What will it require ?
A good trading style!
You must figure out your own approach to trade over a profitable system, because its not just buying and selling of the stuffs. Rater it is a risk management game,
No-body knows the exact future, but being human makes us speculate.
You must be able to figure out,
1. When to take the Loss
2. When to Dilute the positions with No Profit No Loss! (Most Important Thing to Learn)
** DQTS provides you a rule based framework beforehand to take trade or support your decisions .
What is Decrypto Quantitative Trading System { DQTS }!
It is a system which I built in my thesis project regarding a fund assignment, It comprises of :
1. A Volume Float Indicator, which helps us map out the Volumetric Support and Resistance of the Market more can be found in my script (in.tradingview.com)
2. A Trend Follower, with polarised fractals.
3. Entry, Re-entry, Exit and Reverse Entry Strategy
4. Game theory based fuzzy logic to filter the noises
Who is this system for ?
It can be used by all set of people, may they be beginners, intermediates or advanced . The main goal of DQTS is to help you see the market in an intuitive format, its your responsibility to trade it in your style,
How to use this System ?
As I said earlier, a Trading system is just a beginning of the road to profitability, DQTS is a backtested system which works fine for all the markets, having an acceptable real life risk to reward ration 2.77 and an averaged profit factor of 1.5.
As you all know all things cannot be coded, there are some limitations in the system, but main purpose of DQTS is a good start point.
DQTS provides traders with a base to start the design of their own custom strategy on top of it, it is fairly amalgamative with other confirming indicators.
What timeframe should it be used ?
1min ... 5 mins , 10 mins, 15 mins, 1H ...... 1D
What If you want to learn how to use DQTS?
Private message me for that, I will be happy to help you guys.
India VIXAs expected it has declined to 50 from its highs. It has very strong support between 47-50. Sustaining below these levels could take it all the way back to 30-20, which in turn would be good for equities as a falling vix gets stability which leads to a calm recovery in terms of both PRICE & TIME, so what is being perceived a quick bear rally could turn out to be a much more stable bounce back attempt. On the other hand, a reversal from here sees resistance near 65 and then a major one at 75. Anything above that would lead to mayhem once again.
TATASTEEL movement on chart Trend analysis is a way of prediction however strategies are well proven and tested way of reacting to market. There are some people who predict the market with better accuracy and there are some people who are involved in re-acting the market. It takes practice, risk management and confidence to make a trade in your favor.
Price Action Lesson 7: Conditions of a Perfect Shooting StarConditions of a Perfect Shooting Star:
. Body is short.
. The height of the candlestick (the difference between high and low price) is tall enough and it's more than the Daily ATR(264). The taller the Candlestick is, the stronger the Shooting Star .
. The upper shadow (also known as upper wick or tail is the distance between the high price and the close or open price, whichever is higher) should be very tall, over than 75 percent of the Daily ATR(264) is better.
. The lower shadow (also called bottom wick or tail is the distance between the low price and the close or open price, whichever is lower) is nonexistent or very short. It should be less than 25 percent of the Daily ATR(264).
. The Shooting Star with the bearish body is stronger than the one with the bullish body.
. The picture shows a perfect Shooting Star candlestick .
As seen, the height of the candlestick is tall, but the body is very short. Also, the upper shadow is very tall and the lower shadow is very short.
. The close price is lower than open price, therefore the body of this Shooting Star is bearish , and the strength is very high.