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Chart Patterns

Drawing Trendlines: A Practical GuideMastering technical analysis is essential for any trader. One powerful tool that every trader use is the trendline . Let's delve into the intricacies of trendlines, their role in predicting market sentiment, and how traders can utilize them to make informed decisions. Understanding Trendlines Defining Trends: Trendlines serve as invaluable tools to identify and define trends in an asset's price. Whether it's an uptrend or downtrend , these lines act as visual aids on candlestick charts, providing insights into market direction and serving as support or resistance. Trendline Analysis: The peaks and troughs of trendlines signify essential support and resistance levels. Support , situated below the current market price, indicates a potential halt in a downtrend, with buying interest overcoming selling pressure. Conversely, resistance , above the market price, suggests a potential reversal in an uptrend. Steps for Drawing Trendlines: 1. Open a trading chart and access the 'draw tools' tab. 2. Add trendlines to your charts, considering support, resistance, and trend direction. 3. Study price charts to identify trends and determine entry and exit points. 4. Execute trades using stop-loss and take-profit orders to manage risk effectively. Trendline Channels Introducing Channels: Channels are formed when an asset's price moves consistently between two parallel trendlines. These upper and lower trendlines, connecting swing highs and lows, provide a more nuanced view than single trendlines, showcasing both support and resistance levels. Rules for Trendlines and Channels: - Declines approaching an uptrend line or rises approaching a downtrend line can present opportunities to initiate positions. - Penetration of an uptrend line , especially on a closing basis, signals a sell, while penetration of a downtrend line signals a buy. Trendline Breakout Strategy Identifying Breakouts: Breakouts within a trend are crucial events. A breakout above or below a trendline suggests a potential change in trend direction. Traders keen on spotting breakouts can capitalize on new trends by initiating buy or sell positions. Trendline Breakout Example: A downtrend , highlighted by a trendline, comes to an end with a break in the trendline. Traders who spot this breakout can anticipate a short-term spike, providing opportunities for profitable trades. Mastering trendlines is a skill that can significantly enhance a trader's ability to read and navigate financial markets. Whether you're a forex trader or delving into crypto markets, understanding trendlines and their applications is a crucial step toward achieving success in the dynamic realm of trading. Remember, while trendlines are potent, combining them with comprehensive market analysis ensures a well-rounded approach to trading.
Education
by Vestinda
Strategy Smarts Part 2: Trading Trend DaysWelcome to our four-part Strategy Smarts series designed to give you some practical trading templates which build on the concepts outlined in our Day Traders Toolbox and Power Patterns series. Today’s piece centres around Trend Days ; what they are, how to spot them early and most importantly, how to trade them consistently. The Trend Day: A Day That Can Make or Break Your Month The day-to-day price action of any market typically includes a lot of noise, which tends to favour taking reversal patterns from key levels. However, every once in a while, a market will move relentlessly in one direction – steamrollering anything in its path and generating outsized profits for trend traders and damaging losses for reversal traders. A trend day emerges when the daily trading range expands significantly, with the open and close near opposite ends. The initial thirty minutes of trading typically encompass a mere fraction of the day's overall range, with minimal intraday price retracement. Here’s what a trend day looks like on a 1min candle chart: Past performance is not a reliable indicator of future results Note the opening gap, break of the opening range, reluctance to pullback, and rally into the closing bell – all key characteristics of trend days How to Identify Trend Days Early Recognising a trend day before it gains full momentum is a skill that separates astute traders from the rest. A few tell-tale signs precede these market-moving days: Prior Days Range: Trend days tend to follow one or more days with small ranges, building up tension in the market. When the market records a tight daily range, traders should be on high alert for a potential trend day next. Directional Open: A trend day frequently kicks off with a market gap, without an immediate attempt to fill it. This clear gap serves as a strong signal to watch out for a possible trend day. If no gap exists, traders should see a distinct directional bias during the opening rotation. On trend days, breaching the prior day's high or low often happens swiftly. Consistent One-Sided Action: Trend days exhibit a noticeable imbalance between market supply and demand, evident early in the trading day through consistently one-sided price action. This implies the market consistently stays on one side of the Volume Weighted Average Price (VWAP), with VWAP clearly moving in one direction. Moreover, there's a general reluctance for prices to retract on trend days. Examples: S&P 500 bullish trend day: Past performance is not a reliable indicator of future results AAPL bearish trend day: Past performance is not a reliable indicator of future results USD/JPY bullish trend day: Past performance is not a reliable indicator of future results How to Trade a Trend Day A breakout strategy, or intraday trend-following method, can best capture a trend day. Wait for the market to tip its hand first by using the early warnings signs in the section above, and then deploy simple, robust and relatively passive trend following techniques to squeeze as much from the trend as possible. Entry: A key characteristic of trend days is a reluctance to pullback, this means it is usually preferable to enter on breakouts rather than wait for pullbacks when it comes to timing entry. One method that can be used is to simply place a buy stop order to enter above the five-bar high (for bullish trend days). Stop Placement: Trend days tend to favour being more passive and letting the trend run, which in turn favours using relatively wide, volatility-adjusted stops - Keltner Channels are a very useful tool for this. For bullish trend days an initial stop can be placed either below the basis of the Keltner Channel which is a 20-period exponential moving average (EMA) or below lower Keltner Channel depending on how much room you want to give the trend. The 20-period EMA can also be used for trailing stops to lock in profits – for example a close below the 20-period EMA on the 5-min candle chart could trigger a trailing stop. Profit Target: It is not uncommon for trend days to run right into the closing bell. It is also not uncommon for trend days to far exceed the daily ATR. These two factors make ‘exit on close’ or ‘exit on trailing stop’ a more optimum strategy than setting a fixed profit target. Worked Example 1: S&P 500 Long Early Signs: Prior days range was very small. At the open we saw a clear directional bias with prices driving above the prior days high (PDH) and holding above VWAP. Entry: Simple momentum entry on a break to new highs for the day after a small pause. Stop Loss: Initial stop placed back below PDH and below 20 Period EMA. Target: Trail stops were not triggered – exit on close of day. SPX 5min Candle Chart: Past performance is not a reliable indicator of future results Worked Example 2: Tesla short Early Signs: Prior day’s range was relatively small and directionless. There was significant directional bias from the open, the market broke below the prior day's low (PDL) and held below VWAP. Entry: Simple momentum entry on a break to new lows for the day. Stop Loss: Initial stop placed back above PDL and above 20 Period EMA. Target: Prices close above the 20EMA on the 5min candle chart triggered the trail stop. An exit on close would have delivered similar results. TSLA 5min Candle Chart: Past performance is not a reliable indicator of future results Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
CAPITALCOM:US500Education
by Capitalcom
2
NATURE OF PRICE The market price moves in phases (Nature). Understanding the nature of how the price /market move would help elevate your skills. The price moves in 2 phases viz: 1. Correction: When the price moves against the main direction of the trend with very low momentum candles 2. Impulse: When price moves same direction as the main trend with very high momentum candle. Price moved in 1-2-3 formation, impulse - correction - impulse........ In the next post I'll add position to show you how to place trade.
Education
by rossiiey
Part 1 - A Beginner's Guide to Breakdown TheoryThe Concept Of Supply & Demand The price movement of the security is the result of demand(buyers) & supply(sellers): If the supply is more than the demand, there are more sellers than buyers than sellers, which results in a price fall. If the demand is more than the supply, there are more buyers than sellers, which results in a price surge. If the demand equals supply, price consolidates in the range. Demands = supply This is an equilibrium area in which demand and supply are equal. The price forms the value area, where both buyers and sellers are equally satisfied with the current price movement. Neither buyer is looking for a price surge nor the bear is waiting for the plunge, at least for some time. The supply and demand are a deadlock or clueless about the upcoming dominance. Let's take an example to understand these supply and demand conditions: - The provided chart of TESLA shows a real-time example of the supply and demand effect on the price. In the beginning, Demand pressure was more than Supply pressure, and The stock started rising as buyers outnumbered sellers. As the stock price rose, some buyers started losing interest in purchasing more shares due to the high price. Eventually, the demand and supply pressures reached equilibrium. - At this point, both buyers and sellers were satisfied with the price movement, as the demand matched the available supply. At high prices, sellers began to take advantage of the situation by selling their stock, leading to a decrease in price. The supply of stock exceeded the demand, and buyers were unable to respond with further bullish moves. Elements Of The Breakdown Theory: (1) Value Area: As the name implies, the value area is the price zone where most trading activities happen. In the value area, buyers and sellers are satisfied and agree with the current price movement. Purchasers are Neither interested in the further price surge nor do sellers agree to a decline in the price during the equilibrium period. Value area includes two boundaries: Upper boundary: It represents the supply pressure, which stops the security of the price rise. If the stock crosses down the upper band with volume, the price may be ready for a bearish move. The price signals a weak structure if it fails to trade above the upper band for a long time. This structure is a bearish move. Lower boundary: It illustrates the demand pressure, which stops the security of the price fall. If the stock crosses up the upper band with volume, the price may be ready for a bullish move. The price signals a strong structure if it fails to trade above the lower band for a long time. This structure is a bullish move. (2) Excess: The excess price can be identified above the upper band and below the lower band. It shows a clear rejection of a certain price level and it reacts as support and resistance levels. It indicates the intuition of long-term traders. The price spends minimal time outside the value area. It tends to reverse its direction and move back inside. It can create an opportunity for traders to sell above and buy below the value area. For example, the price falls below the lower band but then reverses the movement. Traders can take advantage of this by buying the security with a tight stop loss, aiming for targets up to the upper band or potentially higher. - The provided chart depicts the daily timeframe of SHREECEM stock from May 1999 to July 2001 . During this period, SHREECEM experienced four excess at the upper boundary and three at the lower boundary of the value area. At 3rd excess of the lower boundary, buyers couldn't respond by a strong bullish move, and sellers rule the movement by supply pressure. How to draw value area/ Equilibrium? Step 1 : Obtain a price chart of the tradable instruments(stock, commodity or forex, etc.) with a suitable time frame. As per my observation, daily and, or lower is better. Step 2 : Look for an area on the price chart where the price is moving within a specific range. Step 3 : Mark the trading area with the highest trading activity with good volume, which will be marked as a value area. Step 4 : Mark the area with relatively low trading activities where the price couldn't stay for too long at a certain level, which will be marked as excess. Step 5: Clearly separate the value area from the excess price areas to visually distinguish between the two. Step 6 : Observe the repetitive up and down movements within the value area. Step 7 : Extend value - boundaries rightward on the chart. Observe how price reacts near boundaries for future insights. Example 1: - AAPL has formed five price excesses, two above the upper and two below the lower boundary. After selecting the chart, I separated the excess from the price zone. - Generally, We need to find a price range where most prices touch the upper and lower boundaries. Any prices above the upper boundary or below the lower boundary are considered excess. Example 2: - In another Apple chart, the price has formed three excesses. The first excess happened when bulls couldn't overcome the volume of sellers and ended up losing momentum. The second excess occurred when sellers were unable to break below the lower band and lost their strength. At the third excess, AAPL couldn't generate bullish volume, and sellers dominated the selling. Finally, the price fell to the lower boundary, and bulls responded with a massive volume. Demand exceeded supply, and sellers were outnumbered. Example 3: - In the hourly timeframe chart of AMZN, the stock was experiencing a downward trend and entered a consolidation phase. Two excesses were observed, one at the upper boundary and the other at the lower boundary. - At the second excess, bulls responded with a sharp decline, but they were unable to maintain their momentum above the upper band. This lack of sustainability in their upward move increased the confidence of sellers, leading them to drive the price down for a longer duration. Sellers increased the supply and pushed the price of AMZN down with a gap and strong volume. Example 4: - It is the EURUSD 4-hour timeframe chart. EURUSD has more than nine price excesses, with five above the upper boundary and four below the lower boundary. The 5th excess marked the most significant response from buyers, countered by sellers. Subsequently, the length of the excesses decreased. - At the 9th excess, the buyers' initiative to push the price above the upper boundary couldn't be sustained, as the sellers' trading volume exceeded that of the buyers. In the next part, we will delve into the other components in more detail. Creating an article that caters to both beginners and experts can be quite challenging and time-consuming. However, if you would like the next part to be available sooner, please show your support by hitting the like button. Your encouragement will motivate me to continue writing and sharing valuable insights. Thank you for taking the time to read!
BITSTAMP:BTCUSDEducation
by Money_Dictators
16
DKNG Market CycleAll stocks go thru 4 stages, sometimes each stage can last months or even years, and it's not always easy to recognize like it is on this chart. Stage 1: Accumulation - buyers coming in stopping the down fall, and the stock starts trading sideways. (Wait) Stage 2: Markup - Bullish phase, where traders and institutions start buying the up trend. (Buy) Stage 3: Distribution - where institutions and traders start taking profits - selling. (Sell) Stage 4: Decline - shorts recognize this stage and start shorting the stock. (Avoid)
NASDAQ:DKNGEducation
by tradepatiently
1
a rising wedgeA rising wedge is a pattern that forms on a fluctuating chart and is caused by a narrowing amplitude. If you draw lines along with the highs and lows, then the two lines will form an imaginary angle that will narrow over time. Moreover, this angle’s inclination must be positive; the resulting corner should be pointing upward, indicating an uptrend. A rising wedge is a bearish reversal pattern. Typically, a rising wedge reverses an uptrend, but there are exceptions. It sometimes happens that the rising wedge continues the trend. If there was a downtrend before the rising wedge, then the price goes down after the wedge, and it turns out that the rising wedge continues the trend. But it is important to remember that in any case, after the rising wedge, there is a price decline. The rising wedge is not a very common pattern and is not very easy to spot. Even though bulls and bears appear to be in relative equilibrium, the narrowing of the rising wedge corridor suggests that supply is winning. In the end, buyers break down, and sellers take control of the market. To determine how the price will behave further, it is necessary to further analyze this instrument. Trading Advantages for Wedge Patterns As a general rule, price pattern strategies for trading systems rarely yield returns that outperform buy-and-hold strategies over time, but some patterns do appear to be useful in forecasting general price trends nonetheless. Some studies suggest that a wedge pattern will breakout towards a reversal (a bullish breakout for falling wedges and a bearish breakout for rising wedges) more often than two-thirds of the time, with a falling wedge being a more reliable indicator than a rising wedge. Because wedge patterns converge to a smaller price channel, the distance between the price on entry of the trade and the price for a stop loss, is relatively smaller than the start of the pattern. This means that a stop loss can be placed close by at the time the trade begins, and if the trade is successful, the outcome can yield a greater return than the amount risked on the trade to begin with.
Education
by ForxTay
Learn 2 Essential Elements of Trading In the today's post, we will discuss how trading is structured , and I will share with you its 2 key milestones. Trading with its nuances and complexities can be explained as the interconnections of two processes: trading rules creation and trading rules following. 1️⃣ With the trading rules, you define what you will trade and how exactly, classifying your entry and exist conditions, risk and trade management rules. Such a set of consistent trading rules compose a trading strategy. For example, you can have a following trading plan: you trade only gold, you analyze the market with technical analysis, you buy from a key support and sell from a key resistance on a daily, your entry confirmation is a formation of a reversal candlestick pattern. You set stop loss above the high/low of the pattern, and your target is the closest support/resistance level. Here is how the trading setup would look like. In the charts above, all the conditions for the trade are met, and the market nicely reached the take profit. 2️⃣ Trading strategy development is a very simple process. You can find hundreds of different ones on the internet and start using one immediately. The main obstacle comes, however, with Following Trading Rules. Following the rules is our second key milestone. It defines your ability to stay disciplined and to stick to your trading plan. It implies the control of emotions, patience and avoidance of rationalization. Once you open a trade, following your rules, challenges are just beginning. Imagine how happy you would feel yourself, seeing how nicely gold is moving to your target after position opening. And how your mood would change, once the price quickly returns to your entry. Watching how your profits evaporate and how the initially winning position turns into a losing one, emotions will constantly intervene. In such situations, many traders break their rules, they start adjusting tp or stop loss or just close the trading, not being able to keep holding. The ability to follow your system is a very hard skill to acquire. It requires many years of practicing. So if you believe that a good trading strategy is what you need to make money, please, realize the fact that even the best trading strategy in the world will lose without consistency and discipline. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
10
MATICUSD with bullish flagBullish flag is one of the bullish continuation patterns. This pattern have a big success rate if we follow several rules : BULLISH CONFIRMATION : Trading with bullish flag needs extra patience, because this pattern need one full candle above flag resistance as bullish confirmation. Entering the market with a hurry decision can be dangerous because if flag support breaks down, this pattern becomes invalid anymore. In this example, we need one full candle above 0.6537 as confirmation . INVALID BULLISH FLAG : Consider this pattern invalid if : 1. flag support break down before bullish confirmation 2. flag channel drop and reach 1/2 pole. In this example 1/2 pole at 0.5763 If this pattern becomes invalid, forget it and try to find a new pattern to perform. BULLISH FLAG PROFIT PROJECTION : This pattern have a good profit projection with AB (pole) equal to CD (target). In this example our profit projection at 0.7979 BULLISH FLAG STOP LOSS : Flag support level are also as stop loss level for this pattern. Mostly win to loss ratio for this setup are above 2 Let me know in the comment below if you have any points to add.
COINBASE:MATICUSDEducation
by AzrulAzir
4
Strategy Smarts Part 1: Opening Range BreakoutWelcome to our four-part Strategy Smarts series designed to give you some practical trading templates which build on the concepts outlined in our Day Traders Toolbox and Power Patterns series. We’re kicking this series off with the Opening Range Breakout strategy because it is fundamental to the process of intra-day price discovery. Strategy Overview: At first glance, the Opening Range Breakout may appear as a straightforward range breakout trading setup. However, when executed with precision, it can become a potent instrument for harnessing the inherent dynamics of intra-day price action. The initial minutes of a trading session are marked by frenzied activity, as overnight and pre-opening news gets rapidly factored into prices, and orders are executed. During this phase of early price discovery, a trading range often takes form, aptly termed the opening range. The Opening Range Breakout strategy comes into play when the market establishes a well-defined range within the first hour of trading. Here’s a simple 3-step process which can be used as a framework for trading the Opening Range Breakout: Step 1: Define the Opening Range The initial and critical step in this strategy is defining the opening range. The method for determining the opening range may vary for different assets, such as stocks and indices or the forex market. For Stocks & Indices: Stocks and cash indices with set opening and closing times make defining the opening range relatively straightforward. We are looking for a range to develop within the first hour of trading – the more obvious the range the better. NOTE: It's important to acknowledge that a range may not always form within the first hour of trading. In such cases, the Opening Range Breakout strategy would not usually be applied by traders using this strategy. Example: AAPL 5min Candle Chart Past performance is not a reliable indicator of future results For Forex: Forex is the market that never sleeps, this means the New York close rolls straight into the Asian open – making defining the opening range much more subjective. For most major forex pairs, volume will be lower during the Asian session, increase in early European trading, before away during late morning and increasing again during U.S. trading hours. There are many interpretations and definitions of the opening range breakout strategy for forex pairs, but perhaps the cleanest method is using the lower volume Asian session as a window in which a range can form. Example: EUR/USD 5min Candle Chart Past performance is not a reliable indicator of future results Step 2: Check Range Location If you've read our Day Traders Toolbox Part 1 on Previous Day High and Low (PDH/PDL), you understand the significance of these levels in shaping day trading strategies. The location of the opening range concerning PDH/PDL plays a pivotal role in shaping the expectations and management of the Opening Range Breakout strategy. Assuming PDH represents resistance and PDL signifies support, the relative distance between the opening range and PDH/PDL dictates whether long or short positions are more appealing. Should an opening range form above the PDH, this strategy suggests longs will be more attractive as the market is consolidating in a position of strength. The opposite applies to when an opening range forms below the prior days low – the market is consolidating in a position of weakness and therefore shorts might look more attractive. Example Part 1: SPX 5min Candle Chart Past performance is not a reliable indicator of future results Example Part 2: SPX 5min Candle Chart Past performance is not a reliable indicator of future results Step 3: Trade the Breakout Once a clear range has emerged within your defined opening window, and you've assessed the range's location relative to PDH/PDL, it's a matter of waiting for and executing a breakout when it occurs. A breakout can occur either to the upside or the downside. Consider placing price alerts on both sides of the range to ensure you capture the breakout. Be aware that breakouts from opening ranges may not always be clean. Noise and false breakouts can occur. Therefore, one of the best entry techniques for trading the opening range breakout is the 'Break & Retest' method, as outlined in our Power Patterns series. This approach waits for the breakout to occur and enters during the first pullback. Stop Placement: You may want to consider positioning your stop within the opening range to account for potential market noise. Advanced traders may consider employing the Average True Range (ATR) for more precise stop placement, as discussed in our Day Traders Toolbox: Part 3 on ATR. Profit Target: A sound starting point for determining profit targets in the Opening Range Breakout strategy is using the PDH/PDL and daily ATR. If the breakout happens within the prior day's range, set PDH/PDL as initial targets. If the breakout extends beyond the prior day's range, consider using 1 x Daily ATR as your initial target. Worked Example 1: Tesla Long Opening Range Breakout Tesla establishes an opening range during the first hour of trading above the PDH, indicating strength. The range is broken to the upside, and the market retests the upper boundary, offering an entry opportunity. A stop is placed within the opening range, and an initial target of 1 x ATR is reached as the price climbs. TSLA 5min Candle Chart: Past performance is not a reliable indicator of future results Worked Example 2: Tesla Short Opening Range Breakout Tesla forms an opening range just above the PDL. A break and retest of the opening range triggers the entry. A stop is positioned above PDL and within the opening range to accommodate market noise. The initial target of 1 x ATR is achieved as the price descends. TSLA 5min Candle Chart: Past performance is not a reliable indicator of future results Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Editors' picks
Education
by Capitalcom
7
3 important criteria for quantitative trading!Jim Simons said: "We have three criteria: If it's publicly traded, liquid and amenable to modeling, we trade it." This quote is from an interview with Simons in 2000. The three criteria he mentioned are the basic requirements for any asset that Renaissance Technologies would consider trading. Publicly traded means that the asset can be bought and sold on a public exchange. This allows Renaissance Technologies to gather data on the asset's price movements. Liquid means that there is a large enough market for the asset so that it can be bought and sold easily without affecting the price too much. This is important for Renaissance Technologies to be able to trade the asset effectively. Amenable to modeling means that the asset's price movements can be explained by a mathematical model. This allows Renaissance Technologies to predict the asset's future price movements and make informed trading decisions. Simons' quote is a good summary of the quantitative investment approach that Renaissance Technologies uses. This approach is based on the idea that financial markets are not completely random, but rather contain patterns that can be identified and exploited by using mathematical models. Renaissance Technologies has been very successful using this approach. Its flagship Medallion fund has generated annualized returns of over 35% since its inception in 1988. This makes it one of the most successful hedge funds in history. The quote from Jim Simons is a reminder that quantitative investing is a complex and challenging field. However, it can be very rewarding for those who are successful.
NYSE:VLOEducation
by Moshkelgosha
3
Think You Know Candlestick Patterns?Welcome to the world of candlestick patterns! 💜If you appreciate our charts, give us a quick 💜 Doji candlesticks, with their equal or nearly equal open and close, offer crucial insights into market indecision. Understanding these formations is key to anticipating potential reversals and trade decisions. Let’s delve deeper into their significance and how to incorporate them effectively into your trading strategy. Understanding Doji: A Doji occurs when opening and closing prices are almost identical, signaling market indecision. Neutral Nature: Doji are neutral signals, highlighting the tug-of-war between buyers and sellers. Psychological Insight: Forming amid market uncertainty, Doji reflect hesitancy and potential trend shifts. 4 Types of Doji and Their Meanings: Dragonfly Doji: Description: Open and close near the high of the day. Interpretation: Sellers drive prices down, but buyers regain control. Action: Explore long positions with support from trend analysis and resistance levels. Gravestone Doji: Description: Open and close occur near the low of the day. Interpretation: Buyers initially push prices up, but sellers regain control. Action: Consider short positions if confirmed by trend analysis and support/resistance levels. Traditional Doji: Description: Open and close are almost identical. Interpretation: Strong market indecision; trend reversal potential. Action: Confirm with trend analysis; consider reversal or continuation trades accordingly. Long-Legged Doji: Description: Significantly long upper and lower shadows. Interpretation: Represents high indecision; neither buyers nor sellers dominate. Action: Await confirmation from other indicators for trade decisions. Incorporating Doji Into Your Strategy: Combining with Support/Resistance: Doji at key support/resistance levels enhance their significance. Use them to validate potential reversal points. Utilizing Trend Analysis: Doji are potent when aligned with prevailing trends. In an uptrend, Doji signal potential reversals, while in downtrends, they may indicate trend exhaustion. Implementing Fibonacci Levels: Combine Doji with Fibonacci retracement levels for robust entry/exit points. A Doji at a Fibonacci level strengthens the reversal signal. Risk Management: Define stop-loss and take-profit levels logically. Doji, while insightful, don’t guarantee outcomes. Protect your investments with sound risk management. Remember, successful trading is a blend of strategy, discipline, and adaptability. Doji candlesticks, as valuable tools, provide glimpses into market psychology. When integrated wisely, they can bolster your trading decisions, enhancing your overall effectiveness in the dynamic world of trading.
Education
by Vestinda
Recession? and the BatmanOne of the signs of a recession, for a Chartist is the 200 EMA under the 50 EMA. Well as you can see that has happen serval tines since July 19 th when I beegan telling everyone short all new, all time highs (see my Idea). Notice it's about to happen again. Other signs: Volatility Index (VIX): ... GDP Contraction. ... Low Industrial Output and sales. ... Growing unemployment rate or Sahm Recession Indicator. ... Inverted Yield Curve. Many laugh when I talk about my Batman pattern, a small head under barman ears, and sometimes a cape... Well notice as each impulsive set of waves came down... Holy Cow, it's the BATMAN! notice the last candlestick, almost an ideal shooting star.
CME_MINI:MNQ1!Education
by dryanhawley
4
Mastering Impulses and CorrectionsHello, Successful trading in the stock market requires a comprehensive understanding of market trends and the ability to identify price patterns. One such pattern is the interplay between impulses and corrections. By recognizing these alternating phases, traders can gain valuable insights into potential market movements and make more informed trading choices. In this article, we will explore how to identify impulses and corrections in stocks and leverage this knowledge to guide our trading decisions. Understanding Impulses and Corrections Impulses and corrections are two primary components of price movements in the stock market. They represent the cyclical nature of stock prices, characterized by alternating phases of strong trending moves (impulses) and temporary price retracements (corrections). These patterns are largely influenced by the collective behavior of market participants, as supply and demand dynamics drive price action. Impulses: The Power of Momentum Impulses are the strong, directional moves that propel stock prices in a particular trend. They typically occur in the direction of the prevailing market sentiment and are characterized by higher volume and strong momentum. Impulses can result from a variety of factors, including positive news, strong earnings reports, or broader market trends. To identify impulses, traders should look for the following characteristics: Strong Price Movement: Impulses are marked by significant and sustained price advances or declines. These moves often occur in a relatively short period, indicating a surge of buying or selling pressure. Volume Expansion : Increasing trading volume during an impulse signifies market participation and validates the strength of the move. Higher volume confirms the presence of eager buyers or sellers, further reinforcing the direction of the trend. Break of Key Resistance or Support Levels : Impulses often break through important technical levels, such as support or resistance, further establishing the strength of the trend. These breakouts serve as confirmation points for traders. Corrections: The Breath Before Resuming the Trend Corrections, also known as retracements or pullbacks, are temporary price reversals that occur within an ongoing trend. They serve as a natural pause or breathing space for the market before resuming the dominant price direction. Corrections are characterized by price pullbacks against the prevailing trend, often retracing a certain percentage of the previous impulse. To identify corrections, traders should consider the following factors: Counter-Trend Price Movement : Corrections exhibit price movement in the opposite direction of the prevailing trend. These retracements can be shallow, typically ranging from 25% to 50% of the previous impulse's range. Decreased Volume : Corrections usually occur on lower trading volume compared to impulses. This decline in volume suggests a temporary reduction in market participation and reinforces the notion of a temporary price reversal. Support and Resistance Levels : Corrections often find support or encounter resistance at previously established price levels. These levels can act as potential reversal points, creating opportunities for traders to enter or add to positions. Using Impulses and Corrections in Trading : Recognizing impulses and corrections can provide valuable guidance for trading decisions. Here are some ways to leverage this knowledge: Trend Identification: By observing a sequence of impulses and corrections, traders can identify the prevailing trend. Understanding the broader market direction can help align trades with the momentum and improve the odds of success. Entry and Exit Points: Impulses provide opportunities for traders to enter positions in the direction of the trend. Once an impulse is identified, traders can look for suitable entry points during corrections, aiming to enter at favorable prices before the next impulse begins. Risk Management: Understanding the interplay between impulses and corrections can help traders set appropriate stop-loss levels. Placing stops below significant support levels during corrections can protect against adverse price movements while still allowing the trade to capture potential gains. Conclusion: Recognizing and understanding the patterns of impulses and corrections in stock prices is a valuable skill for traders. By identifying these phases, traders can gain insights into market trends, determine entry and exit points, manage risk, and develop effective trading strategies. Incorporating this knowledge into trading decisions can significantly enhance the chances of success in the dynamic world of the stock market. The above chart clearly shows you the Impulses and corrections on the Sunpharma chart. Good luck and all the best in your trading!
NSE:SUNPHARMAEducation
by thesharkke
3 Risk Actions to take in a Sideways Market “Do you have any risk or money management rules you take, during a Sideways Market or Twilight phase? I want to be more cautious with my trading.” These actions, no doubt, will help us protect and preserve our trading accounts. Action #1: Drop your risk even more If you’re feeling uneasy with the markets, as many have – drop your risk. You can even drop your risk to a range of 0.5% to 1% per trade, as opposed to the usual 2%. This will keep you in the game, so you don’t miss out on any moves. Action #2: Hegde your portfolios I consistently employ hedging strategies, both Longs and Shorts. For example, you can go long stocks and short gold as a hedge. Or you can go long Bitcoin and short Ethereum as a hedge. As long as your losses are smaller than your winners, then your winners will outweigh. And this will help keep your portfolio in check. Action #3: Diversify The JSE ALSI 40 isn’t the be all and end all of trading. You need to learn to diversify into other markets. I’m talking about Forex like EUR/USD, Indices, and even intraday trades.
TVC:SA40Education
by Timonrosso
My Trading Strategy in 3 Steps 📊As per @TradingView 's previous post, in this article, I am going to share my trading strategy in three steps. 📌 Step 1: First, start from the higher timeframes like Daily/Weekly to identify the current long-term trend. Is it bullish, bearish, or stuck inside a range? If the price is sitting in the middle of nowhere, then it is a NO trade zone, as the price has a 50% chance to go either up or down. Thus, there's no edge! Remember: No trade is also a trade. 📚Wait for the price to approach the lower bound or upper bound. Then proceed to Step 2. 📌Step 2: Zoom in to lower timeframes like H1 and M30 to look for any reversal setups. A basic approach would be to wait for a swing low to be broken downward around a resistance as a signal that the bears are taking over. In parallel, wait for a swing high to be broken upward around a support for the bulls to take over. This would be the confirmation to enter the trade. Just like a sniper waiting for the perfect shot! 📌Step 3: Target at least a 1/2 risk-to-reward ratio. This way, even with a 50% win rate, you can still be profitable. Remember: We are risk managers, not traders. We can't control the market; the only thing we have control over is our risk. 📚Always follow your trading plan regarding entry, risk management, and trade management. Hope you find the content of this post useful 🙏 All strategies are good; if managed properly! ~Richard Nasr
Education
by TheSignalyst
51
What is a Bearish Pennant Patterns?Imagine a rollercoaster: first, a steep drop (downtrend), then a brief pause (consolidation) before another drop. 💜 If you appreciate our charts, give us a quick 💜 This pause creates a symmetrical triangle of highs and lows, indicating market uncertainty. When prices break out below this triangle, it signals a likely continuation of the downtrend. 1️⃣ The Downward Journey: A clear, steep downtrend sets the stage, indicating prices are likely to fall. Think of it as the initial dive on the rollercoaster. 2️⃣ The Pennant Pause: Consolidation forms a triangle, showing market indecision. This is akin to the rollercoaster momentarily leveling out before the next plunge. 3️⃣ The Breakout Moment: A swift breakout below the triangle confirms the downtrend. It's like the rollercoaster taking a sudden, sharp drop. 🚀 How to Ride the Bearish Pennant: Step 1: Spotting the Pattern Look for a well-defined downtrend followed by consolidation forming a triangle. The triangle's upper line is resistance; the lower one is support. Step 2: Timing the Breakout Be patient; wait for a rapid breakout below the triangle. High trading volume confirms the breakout's strength. Step 3: Making Your Move Enter a short position right after the breakout or when the breakout candle closes. This aligns your trade with the downtrend momentum. Step 4: Planning Your Exit Set a profit target based on your risk tolerance. Implement a stop loss above the breakout candle's highs to guard against false breakouts. Pro Tips for Success: ✅ Stay in the Downtrend Lane: Only trade bearish pennants within a downtrend. Avoid it during uptrends or sideways markets for optimal results. ✅ Don't Jump the Gun: Wait for the breakout confirmation to avoid falling for false signals. Patience pays off! ✅ Volume: Your Secret Weapon: Strong breakouts occur with high volume. More participation means stronger market conviction. ✅ Plan Your Exit: Have a clear exit strategy. Acknowledge that breakouts might fail, and be ready to exit if the trade goes south. Mastering the bearish pennant pattern requires a blend of technical expertise, patience, and disciplined execution. Think of it as your guide to mastering market dips and making strategic moves. Happy trading!
Education
by Vestinda
LTF Overbought & Oversold Levels Determine HTF Candle's WicksThe overbought & oversold levels on a lower timeframe can determine the upper and lower wick on a higher timeframe's candle. If you know with a high probability what the directional bias is (trend is determined by the HTF candle body closing above or below the 8ema convincingly) you can then use the LTF overbought/sold levels to catch the wick entries of the higher timeframe candle, increasing your win rate and risk to reward. The lower timeframes (left) are married up to these higher timeframes (right): 4H/M 1H/W 15min/D 5min/4H 1min/1H The entry criteria for a long needs to follow these steps in order: 1. Price below the HTF open 2. LTF blue wave hits -60 3. LTF bullish candle body close above 8ema The entry criteria for a short needs to follow these steps in order: 1. Price above the HTF open 2. LTF blue wave hits +60 3. LTF bearish candle body close below 8ema
Education
by DrSlater06
5
How To Find Strongest Altcoins : TutorialNavigating the world of cryptocurrencies can be like embarking on a treasure hunt, and today, we'll discuss the art of finding robust altcoins. AVAX and INJ serve as excellent examples of how to identify strong performers. Comparing AVAX with Bitcoin: When searching for strong altcoins, it's crucial to compare their performance against the market leader, Bitcoin. A compelling example is AVAX, which, during a specific period, saw a decline of 21% while Bitcoin surged by 108%. This discrepancy highlights AVAX's relative weakness during that time. INJ's Remarkable Ascent: On the other hand, INJ paints a different picture. When we compare its performance with Bitcoin, we witness an incredible 973% increase. INJ not only kept pace with Bitcoin but outpaced it significantly. This type of performance makes INJ a prime candidate for those seeking strong altcoins. The Takeaway: When hunting for strong altcoins, it's crucial to perform relative strength assessments against Bitcoin. While Bitcoin remains the benchmark, the altcoins that can surpass it or at least keep up with its pace are often the ones to watch. Trading Strategy: Comparison is Key: Continually compare altcoins with Bitcoin and monitor their relative strength over time. Risk Management: Implement sound risk management practices, especially when dealing with the crypto market's volatility. Stay Informed: Stay updated on the fundamentals and developments related to the altcoins you're considering. Conclusion: The cryptocurrency market is a dynamic landscape filled with opportunities, and identifying strong altcoins is a skill worth honing. The performance of altcoins concerning Bitcoin can provide valuable insights into their potential. As you embark on your quest for strong altcoins, remember that the crypto world is ever-evolving. Stay informed, trade wisely, and may your search lead to success. ❗️Get my 3 crypto trading indicators for FREE! Link below🔑
INDEX:BTCUSDEducation
by AlexWhale
1
Perfect order blockWe can see how the price was in a bullish structure making HH and HL. Touch a new Hh in 1h and came down to create a new lower low changing structure to bullish and create a order block in 3h. We just wait until New York for the retest. I open my position in psychological #183.400. I put my stop loss 25 pips up from my position #183.650 and my take psychological #183.000. Everything happened as I planned. My strategy was successful and It created a new support. As always we can't get carried away with our emotions, but little by little I feel more confident in what I am doing. I still have a long way to go to learn.
Education
by estevezchristian70
Trade Setup with Elliot WavesThis is an example of how you can use Elliot Waves to enter a trade. The bigger wave is wave (1) which consists of 5 waves. Now, for wave (2), a WXY pattern happened in a parallel channel. It can also be called a double three pattern. Wave (2) reached 50% of wave (1). 50% - 60% is typically where corrections end. After that, we can see a sharp rise up. This is wave 1 of wave (3). We can be confirm that it is wave 1 by seeing that it broke the channel of the WXY patterns. We can use this to enter a trade at and wait for wave 3 so that we can exit.
Education
by SamaaraDas
How to Adapt to the Ever-Evolving Financial Markets – 4 WaysThe only constant with the financial markets is… Change The market is constantly changing in a way that it’s bringing: New demand New supply New volume and fresh changes in the complex algorithms. If you want to thrive you need to learn to learn to adapt, evolve and grow with the markets. I want to cover four elements to today’s topic. The Inevitability of Market Change Change is not only constant but inevitable in financial markets. There will always be new elements streaming into the markets from: Global and political events Micro and macro aspects Economic indicators Regulatory shifts, and Investor sentiment These elements are perpetually at work, shaping and reshaping the market. These catalysts can shift the trajectory of entire sectors, leading to volatile market movements. Influx of New Volume on Market Dynamics Every day, the market sees a deluge of new volume. There are new traders and investors constantly joining the financial markets world. And we are seeing an inflow of capital from retail traders, institutional investors, and high-frequency trading firms. The big institutions like Smart Money (banks, hedge funds, brokers etc…) are causing the big volatile moves in the market. The smaller guys – dumb money and retail traders – are also helping with liquidity in the markets. Every transaction is causing a shift in the market. No matter how small it’s the “Butterfly Effect of the financial market”. The Role of Algorithms in Market Evolution In the era of digital transformation, algorithms have become a pivotal part of the financial markets. Algorithmic trading or ‘algo-trading’ employs complex mathematical models to execute trades at lightning speed and frequency. I’m talking about Copy Trader, Robinhood, AI trading bots, EA Expert Advisors and pre-determined automatic mechanical trading methods. This practice is now an integral part of the trading landscape. And they will continue to have an influence in price action, and market patterns. Haven’t you noticed? In the 50s through to the early 2000’s. The markets trended on a more consistent basis. Any monkey could choose a list of good stocks and hold them until they were up 200% – 1000%. But nowadays with derivatives, algorithms, shorts and automatic execution – markets have never been more volatile and more difficult to ride the trends. Always Adapt to Thrive in Changing Markets It’s our job to learn to be more flexible and to adapt to these market conditions. As markets evolve, so must we evolve with them. We need to always: Apply new markets to our watchlists Look for better trading instruments Change the trading strategy to make it more conducive with the environments Always look for the next best broker, trading and charting platform Look for ways to reduce costs and maximise profits. I’ll end off with this. The market is constantly changing, adapting and evolving. We need to embrace the change and not see it as a threat. Have this mentality and you’ll always have the opportunities to improve, anticipate and grow as a trader.
TVC:SA40Education
by Timonrosso
1