Get started

X-indicator

option chain in tradingAn option chain lists all option contracts, including put and call option for given security. However, several traders focus on net change,' 'bid,' 'last price,' and 'ask,' columns to assess current market conditions. Option chain is also called the option matrix. How does an option chain work? An option chain displays available call and put options for a specific underlying asset, with their strike prices, premiums, and open interest. It provides a snapshot of market sentiment and potential price movements.
NSE:HDFCBANKEducation
by SkyTradingZone
Trade DEAD CAT Bounce like a PROThe financial markets are full of complexities, and one pattern that traders often encounter in bear markets is the “Dead Cat Bounce.” It’s a term that sounds peculiar, but understanding it can save traders from making costly mistakes. In this article, we’ll delve into what a Dead Cat Bounce is, why it occurs, and how traders can spot it to make more informed decisions. What Is a Dead Cat Bounce? A Dead Cat Bounce refers to a temporary, short-term recovery in the price of an asset after a significant drop. It occurs during a longer-term downtrend, often catching traders off guard with a brief upward movement, only to be followed by a continuation of the decline. The term originates from the idea that even a dead cat will bounce if dropped from a great height, suggesting that while the asset may briefly recover, the fundamental downward trend remains intact. Why Does a Dead Cat Bounce Happen? Dead cat bounces typically occur for the following reasons: 1. Short-Term Overreaction: After a steep decline, markets may overreact to negative news or events. Traders and investors who feel the asset is oversold might see it as an opportunity to buy, pushing the price up temporarily. 2. Short Covering: In the case of heavily shorted stocks, a sudden uptick can occur when short-sellers decide to close their positions, which creates a temporary surge in buying activity. This is a brief recovery before the downtrend resumes. 3. Market Sentiment Shift: During bear markets, there are often moments of optimism driven by technical factors or speculative reasons. However, these moments rarely last as negative sentiment and poor fundamentals bring the price back down. 4. Technical Factors: Sometimes, a dead cat bounce occurs due to technical factors, such as support levels or moving averages being briefly tested. Traders might see these as buying signals, but the bounce often lacks fundamental backing. How to Spot a Dead Cat Bounce? Identifying a dead cat bounce can be tricky, especially when emotions and fear of missing out (FOMO) come into play. Here are a few ways to spot it: 1. Look for a Sudden, Short-Term Reversal: A dead cat bounce often happens quickly after a sharp decline. If a price surge seems too abrupt and lacks any substantial news or catalyst, it could be a sign of a false recovery. 2. Check Volume: Volume can be a useful indicator. If the price rises with low or declining volume, it may indicate a lack of conviction behind the move. In contrast, a legitimate recovery typically sees rising volume as new buyers step in. 3. Examine Market Sentiment: Bearish sentiment is usually still present during a dead cat bounce. Pay attention to broader market trends and news to assess if the bounce is just a temporary reaction or if there’s a legitimate shift in sentiment. 4. Use Trend Indicators: Indicators like moving averages or the Relative Strength Index (RSI) can help identify the overall trend. If the bounce occurs beneath a long-term downtrend line or fails to break key resistance levels, it’s likely a dead cat bounce. 5. Watch for a Quick Reversal: After the bounce, if the price quickly reverses back to its previous low or even drops further, it confirms the dead cat bounce pattern. How to Trade a Dead Cat Bounce? Trading a dead cat bounce can be risky, but there are strategies that traders use to capitalize on it: 1. Shorting the Bounce: One of the most common strategies is shorting the bounce. Traders who expect the price to drop again can enter short positions once the bounce starts to lose momentum. 2. Set Tight Stop-Loss Orders: Since dead cat bounces are often short-lived, it’s crucial to use tight stop-loss orders to minimize risk if the trade goes against you. 3. Don’t Chase the Bounce: Many traders make the mistake of buying into the bounce, expecting it to continue. Instead, wait for confirmation that the price is likely to resume its downward trajectory before entering a position. 4. Look for Confirmation in Multiple Time Frames: Examine the bounce on multiple time frames to see if there are any signs that the price might continue to trend downwards. A dead cat bounce is usually a short-term occurrence, so confirming it with a larger timeframe trend analysis is important. Conclusion A dead cat bounce is a natural part of the market cycle, especially in bear markets, but recognizing it early can make a huge difference in how traders manage their positions. While it may seem tempting to buy during the brief price recovery, it’s important to remember that these bounces are often short-lived and can quickly be followed by further declines. Traders who can spot dead cat bounces and respond with a disciplined strategy, such as shorting the bounce or avoiding overreaction, can protect themselves from unnecessary losses. By understanding why these bounces happen and how to spot them, you’ll be better equipped to navigate volatile markets and improve your trading decisions. Happy trading, and always stay vigilant!
NSE:NIFTYEducation
by keshevdugar
trading optionOptions are a type of contract that gives the buyer the right to buy or sell a security at a specified price at some point in the future. An option holder is essentially paying a premium for the right to buy or sell the security within a certain time frame. Options trading is the practice of buying or selling options contracts. These contracts are agreements that give the holder the choice to buy or sell a collection of underlying securities at a set price by a specific date. Investors can, but don't have to, own the underlying security to purchase or sell an option
NSE:HDFCBANKEducation
by SkyTradingZone
3
Option Chain part 2 An option chain lists all option contracts, including put and call option for given security. However, several traders focus on net change,' 'bid,' 'last price,' and 'ask,' columns to assess current market conditions. Option chain is also called the option matrix. How does an option chain work? An option chain displays available call and put options for a specific underlying asset, with their strike prices, premiums, and open interest. It provides a snapshot of market sentiment and potential price movements.
NSE:UNIONBANKEducation
by SkyTradingZone
3
option and database in trading An option chain is a comprehensive list that shows you all available option contracts for a given stock. These are sorted by their expiration date, which is the last day you can trade or use the option, and strike price, which is the price at which you can buy (call) or sell (put) the stock. Options are a type of contract that gives the buyer the right to buy or sell a security at a specified price at some point in the future. An option holder is essentially paying a premium for the right to buy or sell the security within a certain time frame.
BSE:SENSEXEducation
by SkyTradingZone
3
technical analysisTechnical analysis is a method of evaluating the potential future performance of a stock by examining past market data, primarily price, and volume. This method aims to identify patterns, trends, and signals within the data to assist traders in forecasting future price movements. Technical analysis is a means of examining and predicting price movements in the financial markets, by using historical price charts and market statistics. It is based on the idea that if a trader can identify previous market patterns, they can form a fairly accurate prediction of future price trajectories.
NSE:NIFTYEducation
by SkyTradingZone
3
Price action trading In simple words, ' Price Action Trading is a trading technique in which a trader reads the market and makes subjective trading decisions based on the price movements, rather than relying on technical indicators or other factors. Price action strategies can be highly profitable when applied correctly. Many traders, both beginners and experienced traders, prefer this method because it simplifies decision-making by focusing on price behavior rather than relying on technical indicators, often providing conflicting price action signals.
NSE:NIFTYEducation
by SkyTradingZone
3
Option Chain in trading An option chain lists all option contracts, including put and call option for given security. However, several traders focus on net change,' 'bid,' 'last price,' and 'ask,' columns to assess current market conditions. Option chain is also called the option matrix. How does an option chain work? An option chain displays available call and put options for a specific underlying asset, with their strike prices, premiums, and open interest. It provides a snapshot of market sentiment and potential price movements.
NSE:NIFTYEducation
by SkyTradingZone
3
technical trading ​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. Technical Trades programs offer hands-on training, practical skills development, and industry-specific knowledge. These programs are designed to equip students with the technical skills and knowledge needed to enter the workforce directly after completion of their training.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
Database in trading Price Data: Real-time and historical prices of stocks, commodities, and currencies. Volume Data: Details on traded quantities within specific timeframes. Order Book Data: Insights into buy and sell orders at different price levels. Market Timestamps: Precise timing of trades and market events. Postgres is an open-source production-ready database with lots of use cases. Mongo is a NoSQL alternative that can sometimes be much faster than SQL databases. Arctic is built upon Mongo to make it even more helpful for those who work with market data, as Arctic supports pandas dataframes and NumPy arrays by default
NSE:NIFTYEducation
by SkyTradingZone
3
ONE CHART TO UNDERSTAND STOCK MARKETThis one chart is enough to understand the behavior of market and how to time the investment. Look at the chart NIFTY 50 Monthly time frame. Since 2005, if Nifty corrects more than 20% then it never ever visit back that correction low. This is simple analysis, but it gives powerful ideas and decent returns. I personally benefited when i follow this. I invest only after 20% correction , if I do so my investments got 100% return before next correction.
NSE:NIFTYEducation
by Deepaklivi
1
What Is AVWAP And How to Use Properly Anchored Volume Weighted Average Price (Anchored VWAP) is a technical analysis tool used by traders to determine the average price of a security, weighted by volume, from a specific starting point in time. Unlike the traditional VWAP, which resets at the start of each trading session, Anchored VWAP allows traders to select any point on a price chart as the starting anchor for the calculation. This flexibility makes it useful for analyzing the price action around significant events, such as earnings releases, breakouts, or market corrections. ### How Anchored VWAP is Calculated: 1. **Select an Anchor Point:** This could be a specific date, the start of a significant event, or any relevant point on the chart. 2. **Calculate VWAP from that Point:** From the anchor point, the VWAP is calculated by taking the sum of the product of the price and volume for each period, divided by the total volume, up to the current time. ### Formula: \ Where: - \( P_i \) = price at the ith period - \( V_i \) = volume at the ith period - \( n \) = total number of periods since the anchor point ### Uses of Anchored VWAP: - **Support and Resistance Levels:** It helps identify potential support or resistance levels based on the average price since the chosen anchor point. - **Trend Analysis:** It provides insights into the market trend by showing the average price participants have paid since a significant event. - **Entry and Exit Points:** Traders use it to find optimal entry or exit points by comparing the current price to the Anchored VWAP. Anchored VWAP is widely used by both retail and institutional traders for making more informed trading decisions.
NSE:TATACHEMEducation
by TheGoldenFarmsofEquity
Technical trading Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the particular technical indicators that a trader chooses to utilize. ​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.
NSE:KOTAKBANKEducation
by SkyTradingZone
3
how to be professional traderEducation: Begin with a solid foundation in finance, economics, or a related field. Many traders benefit from a formal university degree, which helps them understand complex financial concepts and market dynamics. Understand Market Fundamentals: Knowledge of fundamental analysis is crucial. While some traders have been successful in becoming millionaires through scalping trading, many others have lost money and blown up their trading accounts. It is important to note that trading carries significant risks, and traders should only trade with money they can afford to lose.
NSE:ICICIBANKEducation
by SkyTradingZone
3
ADX: The Trend Strength Indicator Average Directional Movement Index The Average Directional Movement Index, or ADX, is a popular trend indicator designed to measure the moving average of price range expansion values. Developed by Welles Wilder, it's one part of the Directional Movement System which aims to measure price movements and their strength. What is the ADX? The average directional movement index is calculated to reflect the expansion, or contraction, of the price range of a security over a period of time. The traditional setting for the ADX indicator is 14 time periods, but analysts have commonly used the ADX with settings as low as 7 or as high as 30.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
Database TradingResults show that migration to a MongoDB database would be most beneficial in terms of cost, storage space, and throughput. In addition, organisations wishing to take advantage of autoscaling and the maintenance power of the cloud should opt for a cloud native solution. Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and there's often a lot of trading between 9:30 a.m. and 10 a.m. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.
NSE:NIFTYEducation
by SkyTradingZone
3
Option and Database Trading A binary option is a type of options in which your profit/loss depends entirely on the outcome of a yes/no market proposition: a binary options trader will either make a fixed profit or a fixed loss. An option chain is a comprehensive list that shows you all available option contracts for a given stock. These are sorted by their expiration date, which is the last day you can trade or use the option, and strike price, which is the price at which you can buy (call) or sell (put) the stock.
NSE:HDFCBANKEducation
by SkyTradingZone
3
Relative Strength Index (RSI) IndicatorTo use the RSI indicator, check if the value is above 70 to show an asset is overbought, or below 30 to show it is oversold. Traders can use these signals to find possible trading opportunities. The relative strength index (RSI) is an indicator used in technical analysis to determine overbought and oversold conditions, which provides traders with buy and sell signals (when to enter and exit positions). Values above 70 indicate overbought conditions and those below 30 indicate oversold conditions.
NSE:NIFTYEducation
by SkyTradingZone
3
the way to clear your trading journeyThe 3 5 7 rule is a risk management strategy in trading that emphasizes limiting risk on each individual trade to 3% of the trading capital, keeping overall exposure to 5% across all trades, and ensuring that winning trades yield at least 7% more profit than losing trades The mindset of instant gratification will not work in the stock market. You will need to be patient and be ready to work hard. For learning swing trading, it takes at least 6 months and for intraday trading, at least a year.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
Beginner To Advance trading What you'll learn Make profits in intraday. Stock market concepts and workings explained from very basic level. Learn powerful day trading strategies. Learn a step by step approach of how to trade in intraday. Trend Following (Wealth Generation) Learn the art of minimizing the risk and maximizing the return. The 3 5 7 rule is a risk management strategy in trading that emphasizes limiting risk on each individual trade to 3% of the trading capital, keeping overall exposure to 5% across all trades, and ensuring that winning trades yield at least 7% more profit than losing trades
NSE:NIFTYEducation
by SkyTradingZone
Option and database trading An option chain is a comprehensive list that shows you all available option contracts for a given stock. These are sorted by their expiration date, which is the last day you can trade or use the option, and strike price, which is the price at which you can buy (call) or sell (put) the stock The Bottom Line. You don't need a considerable sum of money to become an options trader. You can start small with a capital of less than Rs 2 lakhs too. However, as you start small, you need to be a careful trader so that you can cut down on the possibility of losses and enhance the return potential of your trades
BSE:LTTSEducation
by SkyTradingZone
2
RSI divergenceRSI divergence happens when the price and the RSI move in opposite directions. This signals that the current trend may be losing momentum and could reverse soon. For example, if the price keeps rising but the RSI starts falling, it could mean the uptrend is weakening. How RSI Works. RSI values are typically used to identify overbought and oversold conditions. A reading above 70 suggests that the asset may be overbought and could be due for a downward correction. On the other hand, a reading below 30 indicates that the asset may be oversold, signalling a potential upward reversal.
BSE:SENSEXEducation
by SkyTradingZone