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 Swing Trade. Lets Look at the HDFC AMC chart and try to analyze its behavior. We will apply here 2 ways analysis means on one side we will look for price action and on second side we will look for indicators. Price Action: If we see the line chart there is "Flag and Pennant" pattern one of the most powerful pattern in technical analysis. We can see that price exactly respect the 50 Fibonacci ratio which is a very good ratio (where pullbacks are retested) and move. If you see it gave good a breakout of pennant pattern with good volume.  Now let us switch to candlesticks to get more 3D kind of view. What indicator tells? If you see the chart here you will find that there was squeeze and it broke out that means its volatility is increasing. Also if you see that there is RSI above 60 which indicates the momentum or speed. Also there is MACD crossover which also generates a buy signal. So from both of the side stock is looking nice for swing trading. Target Now the question is ho...

 CUP Pattern (4 Months) Conditions: 1. Pattern must be at least 6 to 8 weeks. 2. There should be great volume on right side of the pattern. 3. May re-test or not the neckline. In this case it has tested. 4. Target should be around the depth of the CUP. 5. Stop loss should be bellow the Re-tested Zone. Additional Check. 1. RSI above 60. There is momentum in the price. 2. BB% greater than 70 there is volatility in the chart. Target - 121 Stop Loss - 103 Risk to Reward 1.5 Note: This is for knowledge purpose only.

How to Trade or Invest using GAPS? Most scary thing in the world of 'stock market' is 'gaps-up'. it becomes very difficult to manage trade when security opens 'Gap-up'. So what is the right way to trade gaps or take position on the basis of gaps. There are three rules that must be check before trading gap-up market. 1. ATR :  Check 40 period ATR before gap-up. The price move must be at least 75% of that value. 2. Volume : Volume must be 150% of 50 DMA volume. This Gap-up must be occur in constructive consolidation or an uptrend. Let's look at the chart and understand. Let's look at the chart.  There is a Gap-up 40 period ATR before Gap-up was 111.89. Price should Gap-up at least 75% of ATR that means 83.91. We can see price Gapped-up 245 (i.e. 32,450 - 32,205) Volume is 150% or 3 times. 50 SMA Volume is 162.40K and Gapped-up volume is 527.42K All three conditions are meeting the criteria. Now where to entry and what should be your stop loss is clearly me...

Swing Trade   Lets Look at the M&M finance and try to analyze its behavior. We will apply here Top -Down means we are going to analyze from higher time frame to lower time frame. 1 Month Time frame Look at this 1 months chart. Here we can see that there was 3 wave pattern which was ended by making the TOP of  224.30 after that stock went into correction mode and came near to the low 149.60 but did not break it and start turning up.  Weekly Time Frame Now move to one time frame lower and try to analyze weekly time frame what it is doing. Here we can see a beautiful compression pattern that means if you will see back you will find that it took him 2 weekly candle a fast move to make that high of 224.30 with good volume. But when price came back to the same level volume was drying and took more than 10 candle to cover full move. And now it is making support at 40 RSI. and also 50 SMA. Which is a good sign. Daily Time Frame Now move to one day time frame.  Here we ca...

  Get an edge in your 'Trading' and timing the 'Entry' and 'Exit Points. Free reading PDF.

 Bank Nifty ( Head and shoulder Pattern)  A very nice head and shoulder pattern has given a breakout on Friday in BankNifty on 1hourly time frame we can see it very nicely.  Now as per the rule it provides target as equal to the depth of the head and neckline. Which is almost 10% so we can expect a 10% upward move in Bank Nifty.  There might be two consequences: 1. It may directly go towards target where it will be difficult to manage risk( so it is advisable if market open high on Monday avoid the entry) 2. If market pull backs toward neckline of the head and shoulder so that will be nice trade we can enter if it makes support and suits our risk parameter. Thank you.

 Silver observation - Pole And Pennant Pattern Silver might be a good investment . Wait for the right opportunity .  1. Pole and pennant pattern .  2. RSI comes to 50 at first time from 80 RSI and goes sideways between 60 and 50 RSI .  CONFIRMATION 1. When RSI will close above 60 and % B will Also close above 1. DOUBLE CONFIRMATION . When Pennant pattern will break . Target would be length of the pole make sure to put STOPS as well

  How to know if the stock of a company is in 'Accumulation Phase' or Distribution Phase'?   This is a very common question every investor asks before an investment in value stocks. Sometimes what we see is stock, take the move and go sideways so it becomes difficult for an investor  to identify whether this sideways phase is for accumulation or distribution and how we should understand this ? Here is the simple trick with the help of which you can easily identify the stock phase. There are three major players (Smart Money) which play an important role in shareholding of any company. a) Promoter. b) Mutual fund or Insurance companies. c) FIIs (Foreign Institutional Investors) So let us understand how we will identify smartly which company is good for investment. Step 1: Find a good fundamental company.( Smartly) a. Sales must be increasing. b. EPS should be increasing. c. Low debt. d. P/E should be less than industry. eg. KEC intnl. Step 2: L...

How To Trade Demand/Supply Zone??   "MULTIPLE TIME FRAME ANALYSIS" Step One. Find the  Supply/Demand Zone : This is the zone from where the price has been departured too far.   Time frame 5 min Step Two Go to 5 or 6 times Lower Time Frame 1 min in this scenario as the above chart is for 5 mins.   Step Three:  Find the *reversal candlestick* pattern only on a lower time frame and Supply/Demand Zone whatever the case may be. *Hammer *Doji *Piercing. *Engulfing *Tweezer Top/Bottom. Note: Remember these patterns are only useful and effective in Zones. Take the trade with proper SL  R: R must be at least 1:2 Trading is a combinations of Zones, Candlesticks patterns and indicators. Rules to remember: 1. When trade zones never trade only one time frame. Otherwise you will not get better risk and reward. Moreover you may missed the trade because lower time frame change earlier than higher time frame. 2. Trade only those reversal candlestick patterns which are ...

 Why do most of the traders fail to make money? Can a 12th pass candidate earns millions from the stock market...   Emotions play a very crucial role in trading in the stock market. I have observed that many times a well educated person (i.e. Technical Analyst) fails to make money and a common person who knows nothing about it but basics does wonder.  How does it happen? See, Stock Market is filled with the numerous of brains which comprises of several major emotions which every human being does carry i.e. Fear, Greed, Anger and Hope. And these emotions have no link with the education qualification of any person. A highly graduated masters degree holder or a normal graduated person both can have these emotions. Major winner will always be the person who will manage their emotions, not the one who is more qualified. Briefly understand how the market works, Whether you agree or not but it is true, Market is moved by market makers (20% people have la...

Why do retail investors always suffer with losses? Are "Institutional Investors" the only one who has the right to make money?  These types of so many questions I was asking to myself and when you ask questions there is an answer. I was reading a very nice book where a concept of 80/20 pareto principle was nicely explained. I would like to summarize the whole book concept and betting that it will definitely help you provide an edge in investing. Firstly, I would like to brief you about Pareto principles. What does it say?  This is the principle of "Vital Few" which says 80% consequences come from 20% causes. It applies everywhere. Firstly, it is observed in 'ITALY' where 80% of land was occupied by 20% of the population. Another observation is that 20% is the conclusion of the whole book, 20% of your clothes you wear 80% of the time. Remember it is not a thumb rule but is just an observation and this simple observation works  wonders in the 'Stock Market...

Market Looks Like Volatile ? Manage your risk with proper strategies. Want to trade in the volatile market with proper risk management? When we talk about risk management then suddenly it clicks with options strategies. And out of so many strategies available for options trading we will discuss here two popular strategies for options trading i.e Straddle and strangle let us understand how these strategies work in a practical way.  Assumed, CMP of  Index 2,700 for both the cases. 1) Straddle : To form the straddle strategy we need to buy a call and buy a put with the strike price near to CMP. Here trader expects that there is some big news or an event but not sure which side the market will move hence he prefers this strategy. Eg: Annual Budget, Financial policy reforms, Government election results, Government policy reforms etc.  Formation: Strike Price 2,600 Buy Call @137.6 Buy Put @ 46.85 With the same strike price which is nearby CMP. See how your pay off w...

Butterfly spread ! Market Looks Like Sideways ? Want to trade but with proper risk management. Before an application of butterfly spread you must have a market view as non-volatile. Yes my friend it only works in non-volatile markets.   How to apply practically in the market.?? Which Strike price is required to select ? Let's understand, Many times we see different-different opinions in news channels and on social media that the market will be bullish from there or the market will be bearish from there but if you have understood the market behaviour you will be able to draw your own opinion. And if your opinion is sideways than you are the perfect one who can get benefit from this strategy. For Example: Company A CMP: 2700 Formation: Buy - Cash Outflow Sell - Cash Inflow Major condition : Choose strike price only on the basis of uniformity i.e difference between each strike price should be equal in this case i have taken the difference of 300. You can take 100, 200, or 30...

Risk management vs Accuracy (luck)   Why risk management overrule above all trading strategies??? Why does risk management overrule all charts, patterns and indicators in the stock market??? What risk management actually is??? How does it apply in live trading???   So many questions are there…and the answer is- Mindset > Strategy ! "Market rewards you only when, you stick to your logic..even if market is against to you"     Let's understand with my practical experience.. I was trading in market on the basis of my trading style ( it can be any style how you trade in the market ). I preferred to take only those trades where my Stop Loss and Target Price ratio would be 1:3 First Scenario (Risk Management) Trade 1: - 1,000 Trade 2: - 500 Trade 3: - 300 Trade 4: - 200 Trade 5: + 2,500 In this scenario I earned +500 pts Here my accuracy was 20% (unlucky) still I earned +500 pts. Second scenario (No Risk Management) Trade 1: +700 Tra...