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Trend Analysis

Market Phases - Every trader must knowMarket Phases -Stock prices may appear random, but there are repeating price cycles, which are predominantly driven by the market participation. Below are the four types of market phases that occur. Phase 1: Accumulation - The accumulation phase is a stage of consolidation. There is no clear trend, and the stock is usually trading in a range. It's a span of time in which traders and institutions are slowly accumulating shares, but the market has not broke out yet. Trend traders finds difficulty to trade. Phase 2: Advancing - During the advancing phase, price breaks out of range (comes out of the accumulation phase) and begins a sustained uptrend. This stage is when the price begins moving up. The big money has established a position and retail investors are now invited to join in the profit party. This is the most profitable time to own the stock – an opportunity to let your profits run. Phase 3: Distribution - The distribution phase begins as the advancing phase ends and price enters another range period. The shares are being sold over a period of time—the opposite of accumulation. This time, the sellers want to maintain higher prices until the shares are sold. Phase 4: Declining - During the declining phase, price breaks out of the range (comes out of the distribution phase) and begins downtrend. This stage comes after distribution when price begins moving down. Now lets understand them one by one in detail :- 1.)Accumulation phase where trend traders find difficulty to trade Accumulation usually occurs after a fall in prices and looks like a consolidation period. Characteristics of accumulation phase: It usually occurs when prices have fallen over the last 6 months or more It can last anywhere from months to even years It looks like a long period of consolidation during a downtrend Price is contained within a range as bulls & bears are in equilibrium The ratio of up days to down days are pretty much equal The 200-day moving average tends to flatten out after a price decline Price tends to whip back and forth around the 200-day moving average Volatility tends to be low due to the lack of interest Examples of Accumulation - How To Trade Accumulation ?? 1.)Sell At Resistance 2.)Buy At Support Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns. Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance area. 2.)Advancing phase which trend traders love — Best trading strategy is to long the uptrend After price breaks out of the accumulation phase, it goes into an advancing phase (an uptrend) and consists of higher highs and lows. Characteristics of advancing phase: It usually occurs after price breaks out of accumulation phase It can last anywhere from months to even years Price forms a series of higher highs and higher lows Price is trading higher over time There are more up days than down days Short term moving averages are above long-term moving averages (e.g. 50 above 200-day ma) The 200-day moving average is pointing higher Price is above the 200-day moving average Volatility tends to be high at the late stage of advancing phase due to strong interest Examples of Advancing How To Trade Advancing ?? 1.)Breakout Trading - Where you above the highs 2.)Pullback Trading - Where you buy support which was earlier a resistance. This is called change in polarity. Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend. 3.)Distribution phase- - Distribution usually occurs after a rise in prices and looks like a consolidation period. Characteristics of distribution phase: It usually occurs when prices have risen over the last 6 months or more It can last anywhere from months to even years It looks like a long period of consolidation during an uptrend Price is contained within a range as bulls & bears are in equilibrium The ratio of up days to down days are pretty much equal The 200-day moving average tends to flatten out after a price decline Price tends to whip back and forth around the 200-day moving average Volatility tends to be high because it has captured the attention of most traders Examples of Distribution :- How To Trade Distribution ?? 1.)Sell On Resistance 2.)Buy On Support Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns. Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance are. 4.Declining phase - Best trading strategy is to short the downtrend After price breaks down of the distribution phase, it goes into a declining phase (a downtrend) and consists of lower highs and lows. This is the stage where traders who do not cut their loss become long-term investors. Characteristics of declining phase: It usually occurs after price breaks out of distribution phase It can last anywhere from months to even years Price forms a series of lower highs and lower lows Price is trading lower over time There are more down days than up days Short term moving averages are below long-term moving averages (e.g. 50 below 200-day ma) The 200-day moving average is pointing lower Price is below the 200-day moving average Volatility tends to be high due to panic and fear in the markets Examples of declining :- How To Trade Declining ?? 1.)Breakdown Trading - Where you sell below the lows 2.)Pullback Trading - Where you sell on rise after a breakdown. Supports turned into resistance. This is called change in polarity. Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend. Hope you all learnt from this post. Share with the community if you liked it. Regards Omahto
Editors' picks
NSE:NIFTYEducation
by Omahto
21
TRADING A GAME OF PROBABILITYTRADING A GAME OF PROBABILITY We know that market has random movements; the pattern behaved in the past cannot behave exactly the same next time so in a random market environment there are so many external factors that can affect the outcome of the trade, a trader cannot know all those factors. What you know is your EDGE (your strategy) which is certain in an uncertain market environment, If your edge has a positive outcome you can produce a consistent result in a random environment. HOW TO PRODUCE CONSISTENT RESULT IN A RANDOM ENVIRONMENT An event that has a probable outcome can produce consistent results if you have the odds in your favor and there is a large enough sample size. (a series of trades generated by your edge). You have to think in probabilities and take every single trade which meets the criteria of your system (your edge); you don’t know the outcome of any trade before taking the trades (you don’t know which trade is going to be a winner or loser) unless you know a way to travel in time so, you cannot select between the trades you have to play all. Every event is independent of the previous one. If your last 2 trades are loser doesn’t mean next will also be a loser, because markets are random and you can make consistent result if you have odds in your favor.
NSE:BANKNIFTYEducation
by SANJAYPATIDAR_
2
HOW BIG PLAYERS FOOLS USon this chart you can clearly see a triangle pattern and a crucial support zone. This chart pattern is visible to all public what can you anticipate where the major stop losses would probably be place or when the buyers will panic. It is obvious around the support zone . The big players manages to make a small move in direction to the probable stop losses and a series of stop losses start to trigger then a sharp selling starts and what happen after that price reverse and most of the traders are out of the game they get frustrated seeing prices going into there favour after hitting their stop losses. In this situation the Stop loss are more predictable so the big players use this opportunity.
UEducation
by TRADEWITHFUN247
2
📚Learn More💰Earn More - Inverted Head and Shoulders in GBPUSD 📚 LEARN MORE 💰 EARN MORE Inverted Head and Shoulders Definition: A head and shoulders pattern is also a trend reversal formation. It is formed by a Valley (left shoulder), followed by a Lower Valley (head), and then another Higher Valley (right shoulder). A “Neckline” is drawn by connecting the highest points of the two Peaks. Neckline resistance does not need to be strictly horizontal. This illustrates that the downward trend is coming to an end. When a Head and Shoulders formation is seen in a downtrend, it signifies a major reversal. The pattern is confirmed once the price breaches the neckline resistance. In this example, we can easily see the head and shoulders pattern. How to Trade the Head and Shoulders Pattern: ENTRY: we put an entry order above the neckline. TARGET: We can also calculate a target by measuring the lowest point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline. ❤️ If you find this helpful and want more FREE forecasts in TradingView . . . . . Please show your support back, . . . . . . . . Hit the 👍 LIKE button, . . . . . . . . . . Drop some feedback below in the comment! ❤️ Your support is very much 🙏 appreciated! ❤️ 💎 Want us to help you become a better Forex / Crypto trader ? Now, It's your turn ! Be sure to leave a comment; let us know how you see this opportunity and forecast. Trade well, ❤️ ForecastCity English Support Team ❤️
Education
by ForecastCity_ME
The Ultimate Price Action Breakdown Strategy Preface Alright, the operation started after creating an extreme low at 120.20. Price has created an upward channel from the extreme low, where the equilibrium has occurred between bull and bear traders. Control line has given eleven touches, which shows the strong gravitation at the middle. Here, we can see four reversals on the upper band, and three reversal points occurred on the lower band. We have two opportunities: 1. Now, the price is on the H-line, and the breakout of the h line indicates the lower band touch. 2. Bull can buy at excess, or they can enter at reappearing in the value area for the target of the control line. Every beginner who wants to start trading with naked strategy (without indicator) can use this method because the price is the thing that will pay you. Let me explain to you important aspects of the breakdown strategy. Value area: A zone in which bulls and bears both are satisfied to stay within it. In this zone, supply and demand equally exist. Ascending Value area: Range-Bound Value area: Descending Value Area: Value area has two bands: Upper band: Upper band indicates demand-supply. In this chart, the price has taken four reversals from the upper band to maintain the equilibrium. The upper band put a stop to the bull power. Lower Band: The lower band indicates demand pressure. In this chart, the price has taken three reversals from the lower-band to maintain the equilibrium. The lower band put a stop to bear power. ------------------------------------------ No trading zone: In order to respond to either bull or bears initiative, the price creates an area. In which no trading activities have taken. It helps to find the weakness of any particular move. ------------------------------------------ H Line: After completing the last share move, the price creates the bulk trading activities, where bulls' power becomes dull. Breakout of the H-line indicates the cease of the particular move. ------------------------------------------ Excess: Excess is regret and fake-out. In simple words , price breaks the upper band and again re-enter into the parallel channel. Buying or selling at the excess is the perfect deal. An excess is a signal of reversal. The psychology behind the control line : Price is forming in the parallel channel, but bulls are not satisfied with the current trend. That's why bulls increase demand pressure to break the upper band of the value area. After breaking the upper band, bulls face some problems with profit booking. Now, bulls realize that the price is not going up. Bulls give up on the thought of trend change. Bears were watching this patiently. And after they realize that prices are too high, they increase supply pressure above the upper band of the channel. Now bulls are out of the market, and the seller has maintained the equilibrium & Vice versa. ------------------------------------------ Control line: The Control line is the gravitation point of any value area. We can draw by connecting the reversal points in the middle. The more the points are available, the higher the effectiveness. Please note that the price can not stay away from the control line of the value area. We can use it as a price target or breakout trade. Here, the price has given eleven touches on the control line. ------------------------------------------ Breakout or breakdown of the channel: Bulls and bears both disagree with the current price trend. Either bulls or breaks out the value area by giving consistent closing. It often happens after a complex correction or trend change. I will upload practical work on this idea. Kindly wait for the implementation. Thank you for your support. To be continued.....
Editors' picks
NSE:INDUSTOWEREducation
by forextidings
55
BANK NIFTY:TIME CYCLE ANALYSISCYCLE PRINCIPLES: 1. The Principle of Commonality – Markets(Index) and security price(stocks) movements have many elements in common. In particular they tend to have common high and low points that coincide with cycles. 2. The Principle of Cyclicality – Price movements correspond to a combination of waves that exhibit cyclic characteristics. 3. The Principle of Summation – Cycle waves of different degrees combine to affect price movement and do so by adding the waves together. 4. The Principle of Harmonicity – Cycle waves of different degrees are harmonized and are related by a small integer value.comaan harmoics are 2nd and 3rd or 1/2 and 1/3. 5. The Principle of Synchronicity – Cycle waves are phased and synchronized at price troughs. 6. The Principle of Proportionality – Waves in price movement have amplitude that is proportional to their wavelength. 7. The Principle of Nominality – A specific, nominal collection of harmonically related waves is common to all price movements. 8. The Principle of Variation – Variation in harmonicity, synchronicity, proportionality and nominality (previous 4 principles) is expected. FOLLOWING CYCLES ARE SHOWN HERE: Cycle with second harmonic has given mid cycle dip where as cycle with 3rd harmonic has given higher peak there by confirming presence of cycle through sine wave like price strucutre. 270 DAYS:WHITE(WORKING IN 3RD HARMONIC,meaning it is divided in 3 equal length cycle of 90 days each) 90 DAYS:PINK(WORKING IN 2ND HARMONIC,meaning it is divided in 2 equal length cycle of 45 days each) 45 DAYS:GREEN(WORKING IN 3RD HARMONIC,meaning it is divided in 2 equal length cycle of 15 days each) 15 DAYS:YELLOW(WORKING IN 2ND HARMONIC,NOT SHOWN HERE) Above mentioned things represents first 5 Principle of cycle theory,as we can see price movement having cyclic characteristics and higher degree cycle being divided in it's 2nd or 3rd harmonics,there by forming lows/troughs together.If we do summation of lower degree cycles then we get higher degree cycle which is representing principle of summation. OBSERVATIONS: #CURRENT PHASE OF CYCLE: 270 DAYS:BEARISH 90 DAYS:BEARISH 45 DAYS:BULLISH 15 DAYS:BULLISH #Briefings of 270 DAYS CYCLE: In the current 270 days cycle with 3rd harmonic,we have already seen 3/4th cycle high around 39360,there by suggesting us that 270 days cycle has completely turned bearish #Briefings of 90 DAYS CYCLE: Rise from 8th march in current 90 days cycle can be attributed 90 day cycle's 2nd harmonic cycle working in bullish phase,post mid-cycle dip @32155.Chances of this current rise to cross highest high of current 90 day cycle(39424) is very low as current 90 day cycle itself has turned negative or bearish #Briefings of 45 DAYS CYCLE: As it is working in it's 3rd harmonic meaning current 45 day cycle will have three 15 day's cycle or will be divided in three 15 days cycle.Currently 1st 15 day cycle is going on and it has reached it's halfway point meaning going ahead we can see one dip around 28-30 th march which will complete first 15 day cycle,from there we can again see prices pushing higher in order to make 45 day's mid-cycle high,this high can be higher then high registered in first 15 day cycle and around 22 april second 15 day cycle will end meaning a dip in price around 20-22 nd april,this will be followed by last 15 day cycle rise post where in we will see price unable to cross high posted in second 15 day cycle there by turning every cycle(15,45,90,270) negative. 13th May is the day when entire current 270 day cycle is ending meaning in 2nd-3rd week of may we can see bank nifty forming important low. Analysis: Scenario-1:Bearish/Road-blocks ahead for prices to move higher from current levels 1)FLD(136 days) @ 36436. 2)61.8% retracement from high to low of previous 45 day cycle @ 36647. 3)Ichimoku cloud @ 36428. 4)Falling OI in futures contract from last 6 days. 5)Higher degree cycle(270 and 90) has already turned negative indicating lower probability of making new high till 13th may. 6)We have seen prices breaching previous 90 day cycle low in current 90 day cycle again indicating selling pressure. Personal view: As bigger cycle has turned negative buying from current levels should be avoided and long positions should be protected with stop-loss as per once risk appetite.I feel post 12th April(2nd ,15 day cycle peak zone starts of current 45 day cycle)we can see decent selling pressure in Bank nifty as post 12th April all the major cycle's will turn negative. Disclaimer:Analysis/views shown here are only for educational purpose.Trading position should not be taken on its basis.
NSE:BANKNIFTYEducation
by UNDERDOG-29
25
NIFTY:TIME CYCLE INVERSIONConcept of Time Cycle: #A cycle is something that influences the price movement of a financial market to move up towards a peak, and then to move down towards a trough (or low point). #It repeats that action on a fairly regular basis or exist in continuous time. #There are multiple cycles which influence the price movement of any financial market.The multiple cycles that influence price movements combine in a very particular way. #This multiple cycle low's are synchronized as low are made on the back of "fear/panic" and psychologically human tends to experience fear in mass hence different cycle lows are concentrated where as high's of different cycles are scattered as high's are driven by "GREED" which is rather more subjective. #J.M.HURST inventor of cycle theory has given a nominal model which states comman cycle's that are found in financial markets. #Due to multiple cycle going on at the same time,we can see variation in it's wave length(Cycle period). Observation over here: Since January 2021 we are seeing Nifty following 20-days time cycle there by making important pivot low's near vertical line showing cycle period day on most of the occasions till January 2022. Since January 2022 we are seeing inversion happening in the time cycle meaning instead of catching or making important pivot low near cycle period day we are seeing market making important pivot high post which we have seen significant market fall on last 2 occasion of cycle period day. Next cycle period day is on 17/03/2022.Hence going by this logic we can expect current up move to continue till 17/03/2022 post which we can see fall. Although this time in the current up move we have seen price breaking upper channel rasistance and has also managed to close above it and also above its previous pivot closing high of 16793(16800) in today's trading session,which in itself is bullish sign suggesting next target of 17050-80 on the upside,however from here risk reward is not favorable for taking long trade. Although channel rasistance is broken,from last 2 cycle we are seeing Nifty making pivot high's post which we have seen nifty falling and continuing on this logic post 17/03/2022 we can see fall in Nifty till at least previous pivot low of 15670 in order to confirm double bottom. Trade Setup 1)Need reversal candle near cycle period,price being at gap(17050-80) or previous price action zone(17340-400). 2)Next day market should trade below reversal candle low for atleast first hour in order to initiate trade. Stop-loss should be reversal candle high for short trade and target would be 15670. Disclaimer:This are just my views on the index,no position should be squared off or initiated on its basis.Posting this for my future reference.
Editors' picks
NSE:NIFTYEducation
by UNDERDOG-29
34
ARE YOU ALSO STRUGGLING WITH YOUR NEW TRADING CAREER ? If you are also struggling with your new trading career then don’t just worry, it’s not like if you are only one who is struggling, as all the new comers goes through this same phase, and those who keeps believing in them and keeps the grind on eventually pass this stage and become a successful trader in the end. In this post we will discuss about what one should do if he is not able to make money in the market So, let’s start with the basics that everyone should follow in their initial phase of trading to become profitable. 1) SAVE YOUR MONEY : - There a great saying i once heard that in stock market , "First you will lose money then you will learn how not to lose your money and you will start making money ".If you are new then forget about how to make money, else keep focus on how not lose your money . Because once you have learned how not to lose your then money will just eventually start flowing into your account. So, work on protecting your capital. 2) UNDERSTANDING YOUR TRADING STYLE : - there are three types of trades one can execute in the market, and these are INTRADAY, SWING, POSTIONAL/INVESTMENT. The main difference between these trades is their holding time, assuming that you already know about these, I will proceed our discussion on why knowing your trading style is important. If you are taking intraday trades only and failing everyday then you should restart your trading journey as a Swing trader. As swing trades don’t require some immediate actions like entry and exit which is required in intraday, so you can give more time to your analysis and plan perfect entry and exit levels . And once you start feeling confident about your analysis then you can shift to intraday again back in future. Believe me this will help you a lot, at least it did the work for me. But if still want to take only intraday trades, don’t worry I will cover that up in next point. 3) PRACTICE MAKES A MAN PERFECT :-I don’t know if Practice doesn’t make a man perfector not but surely it removes the imperfections from a man. To become a better intraday trader what you have do is to take as many trades as you can but keep the quantity fixed to 1-2 and risk to reward to 1:2. Go to smaller time frame draw your support and resistance levels and execute trades accordingly, don’t worry about the small profit as it will come once you finish your training. Your goal should be of executing 500-1000 trade in next few months and see the by yourself in the end. 4) LEARN FROM YOUR MISTAKES : - whenever your trade fails, reanalyze that stock that try to figure out what was the mistake and write down your mistakes in your trading journal, it will help you to overcome your common and frequent mistakes and, in the end, you start avoiding these mistakes. 5) DEVELOP READING HABBITS : - If you have learned some few strategies from YouTube and trying to execute trades on the basis of those strategies then I will suggest you to read books about technical analysis. I am mentioning few books and sources that can help you, a) Japanese candlesticks by Steve Nison b) Trading in the zone by Mark Douglas c) Encyclopedia of chart patterns by Thomas Bulkowski d) The art and science of Technical Analysis by Adam Grimes e) Zerodha varsity is also a good source for free and systematic course of Technical Analysis and Fundamental Analysis and much more. I am sure if work on these points you will become a successful trader one day for sure. I wish you a happy trading journey, best of luck for your future.
NSE:BANKNIFTYEducation
by himanxu_yadav
How to be successful by following the foot prints of Big Banks.A Very simple way to identify the foot prints of Big banks / Institutions / Big players in trading. Why to follow the big banks ? Because they are the market leaders who decide the direction of a market, and also they never loose their position most of the time. So who will be successful ? following big players or the one who follow retailers? So hope you can find the answer - the one following the big banks / or institutions. This can be achieved by finding the Valid Supply and Demand Zones and taking trade at those Zones only. More info is given in below comments
NSE:NIFTYEducation
by VishnuDeepan
High Probability Candlestick Pattern 1: Three Line StrikeAs you read from image description that's pretty much all there is to learn on this pattern. Thomas Bulkowski in his book "Encyclopaedia of Candlestick Charts" mentions that this pattern predicts higher prices with an 83% accuracy rate. Do you Remember Nirmala Sitaraman Candle? Yes that's three line strike which was formed after budget was announced on 1st Feb 2021 Adding Another Example here of Reliance Note: Candlestick patterns alone are not reliable sometime, so combine them with some indicators like RSI to spot positive divergence on same or lower time frame OR MACD crossover and histogram positive as shown in below example DISCLAIMER: There is no guarantee of profits or no exceptions from losses. The stock and its levels discussed are solely the personal views of my research. You are advised to rely on your judgement while investing/Trading decisions. Seek help of your financial advisor before investing/trading. Investment Warnings: We would like to draw your attention to the following important investment warnings. -Investment is subject to market risks. -The value of shares and investments and the income derived from them can go down as well as up. -Investors may not get back the amount they invested - losing one's shirt is a real risk. -Past performance is not a guide to future performance. -I may or may not trade this analysis --------------------------(((((LIKE)))))-------------------------------
Editors' picks
NSE:NIFTYEducation
by Niftydirection
18
Top 5 Price Action Secrets from my trading experienceIn this post I'm going to share some Price Action observations that can level up your trading game. 🚀 1) Whenever a stock breaks out on a monthly or weekly timeframe after years of resistance, the stock has the potential to deliver returns of more than 40% in the following weeks. In the chart below SASTASUNDR after a breakout from 10 year resistance gave more than 300% returns in 6 months. 2) Even in falling markets, when a stock consolidates it is a signal of strength, and it has a significant potential to make a huge move once the market has corrected. 3) If an industry sector and the overall market are both consolidating at the same time, and only a few stocks are attempting to break out, the likelihood of their failure increases dramatically. 4) When the market begins to rebound, the strongest stocks will generate higher returns and set new highs. 5) If a stock is accumulating or remaining close to its primary resistance or support, its chances of achieving BO/BD are significantly increased.
NSE:RELIANCEEducation
by Kapil-Mittal
11
A simple trading strategy with ways to improve the winning edgeThere are lot of trading strategies which can be easily available. Whatever strategy you use, If you know how to increase the trading edge, and when to avoid the trade will help you to make money. I have taken a simple trading strategy known to most traders, but here I am going to explain how to take the trade which has more winning possibility. Strategy : Previous day high break out. Go long above 1st 15 mins candle high. Time frame : 15 mins Entry condition : 1st candle should close above the previous day high. Target : 1 : 2 or close at 3 or 3.15 pm if stop is not hit. Trail : Shift stop to entry once you get 1 : 1 profit Stop : Low of the 1st candle. Entry : Above the high of 1st candle. In this chart I have marked the previous day high. Now we will see about how to increase the trading edge or winning edge. On feb 25, the 1st candle volume was normal which indicates participants were not that much enthusiastic about the movement. Volume was not supporting and we did not get big movement as throughout the day volume did not pick up. 1st candle volume gave an indication that the trade was not having high edge. On Feb 28th, the 1st candle had good volume, but the candle was having selling pressure. So we take the trade after seeing the next candles formation. Here the candles were showing buyers interest in the stock. This trade was having good trading edge. On March 1st, 1st candle broke the previous day high & closed above it. Volume was good, but the high low difference was big. Position sizing will help but it most of the time we won’t get 1:2 rewards. This trade was not having high edge. On March 3rd volume was good, but it was a bear candle and closed below previous day high. So no trade. In this example, price broke the previous day high for 4 days. As per our strategy we got 3 trade set ups, but only one trade has high trading edge. This is how you can improve you winning rate in a trade. In this UPL chart, 1st candle broke previous day high, had good volume, but high/low difference was big and it did not give 1:2 profit. In this Bsoft chart, price close above the previous day high but the candle is having selling pressure and no trade in it. Whenever you decide to trade on a strategy, back test at least 100 trades to check the winning chances. Always place stop once you enter a trade. Market is having fast direction change nowadays and you should be prepared to handle it.
Editors' picks
NSE:TATASTEELEducation
by vanathi
81
Bank Nifty:Plan of Action & What FOLLOWED( +18.52% OR +7298 pts)We witnessed an awesome planned fall in Bank Nifty, hope you all enjoyed and made money with the idea. Lets look at the Plan of Bank Nifty & Nifty My Favourite Bank Nifty first & Nifty Lets dig deep into the structure & my thought process behind it First thing First "KEEP IT SIMPLE BABY'' Model 1 (ABC(Elliott ABC)/Pole & Flag/ABCD Harmonic Pattern) what ever you call it, its the simplest of the pattern to recognise & trade Elliott Wave (ZigZag) - ZigZag is a 3 waves ''Corrective'' structure in bigger 5 wave "Impulse" - Subdivision is 5-3-5 - Wave B can be any corrective structure ie zigzag-flat-triangle Fibonacci Relationship between waves are - Wave C = 61.8%, 100%, 127.2% or max 161.8%(need to be careful while labeling wave C as wave 3 is 161.8% of wave 1) - Wave B = 50%, 61.8%, 78.6% or 86% Pole & Flag - Basically Flag is a pattern which forms after market has moved some distance - Flag is a consolidation pattern used to participate in the previous move, that can be up or down - Basic & Logic of the flag is as simple as, any consolidation which is in-between parallel channel - Trade can be initiated on break of parallel channel - Fibonacci relation for the flag can be specified in 2 reversal points(Profit Taking Zone) 1) 61.8% projection of first leg, which should end in the range of 'CENTER LINE REVERSAL'' of parallel channel 2) 100% projection of first leg, in this case, price reverse from bottom of the parallel channel Harmonic Pattern( Bullish ABCD) In Harmonic Pattern (Bullish ABCD) it is labelled as ABCD, instead of ABC of Elliott wave and all the harmonic patterns are derived form understanding ABCD structure, Fibonacci Relationship of all legs BC= 61.8%-78.6% of AB CD=127.2%-161.8% of BC CD=AB CD=127.2%-161.8% of AB Now lets come back to Bank Nifty Plan As per the above study, we can easily identify Impulse and Corrections Points were considered while planning - the rally following 20 Dec 21:1300 hrs was not Impulsive in nature - Price was struggling to rise above 61.8%-78.6% fib retracement resistance level & hovering in the range - 12 Jan-02 Feb-10 Feb formed ''TRIPPLE TOP" with narrow range of 1.38% - for the said pattern we witnessed a breakdown on 24 Feb 22 on opening candle Now the some important points to consider from ''Elliott Wave Principles'' - Wave B structure As per Elliott Wave, Wave B can be a ZigZag, Flat or triangle(TO KEEP IT SIMPLE - not to go in complex corrections) Possibilities of Correction Case 1(Zigzag) Case 2(Flat) Case 3(Triangle) Now from the above two patterns we can eliminate which doesn't fits the pattern Case 1(flag) eliminated we are not left with case 2 & 3 or say Possibiltiy 2 & 3 As per possibility 2 (flat) we get As per possibility 3 (Triangle) we get Both of the labeling stated Bank Nifty & Nifty are heading lower We will wind up this, you can keep sharing & liking the effort of the author so that I can come up with more in future Wish You Happy & safe trading Views are for ‘’EDUCATIONAL PURPOSE ONLY’’ trade at your own risk. "Always Respect Risk" Happy Trading Jai Hind -
Editors' picks
NSE:BANKNIFTYEducation
by DhirajSinghBais
18
My reasons and Your reasons behind losses while trading.Why do people take losses in trading? The reasons or mistakes behind a trader make losses. I suggest you these reasons should not be repeated. If you might have also come to cross from this reason and got losses, you can type in comment number of specific reason what you have faced. In case, you also have another reason except in this post, please or kindly specify it in comment section . We will discuss it for a solution. 1). Stop following the right/perfect "trade-setup strategy" even if you are earning from it. For instance, you're going good in "breakout setup" but not following consistently, change suddenly/started to follow another pattern the setup. 2). Not enough Technical Knowledge. New traders just learn from YouTube or another resource about basic charting reading & indicators, such as MACD, chart pattern, trendline, etc. directly jump in practical trading with using full margin and later convert to loss. They believe trading is very easy but it's theoretically. In the practical, you need experience & practice a lot to earn. 3). Believing blindly on Other's Tips. A lot of traders pay high prices for tips/research/analysis and follow them blindly without applying margin management rules. As a result, they wipe out. I am not saying to ignore/avoid other research or analysis but you should apply margin management rules and also do paper trading on their research. 4). Try to cover loss, Expecting huge profit. When traders take a loss, they think to recover the loss by taking entry huge quantities to recover from little pips/points and fall into a huge loss. After taking a position with the perfect trade-setup, some traders expect more profit than the per-defined target. Later, they convert into loss because of changing setup. 5). You take risks that you can't afford to lose. Taking Unlimited Risk means, neither protective stop nor mental stop. Some people keep a 1:1 stop-loss and target ratio. Don't do this: "Holding losers trades while selling winners trades". 6). Lack of Emotion Control. Not following your own per-defined setup, for example, changing stop-loss or not exiting and expecting to recover, sometimes not booking profit and expecting more profit and finally convert into a loss. In more clear words, change your set-up frequently while real-time trading. Don't believe in Exit or Marry with Beliefs/Hopes(Hope is not a strategy). Believe in recover loss without any specific reasons and finally had to take a huge loss. I have seen in many new traders, they let Loose Grow and take a small profit. Avoid the words ‘hope”, “wish” or ‘feel’ when talking about a trade-setup. Believing that price cannot move higher/lower.
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by Trade-Technique
121