Showing category "Technical analysis" (Show all posts)
one of the most popular intraday trading tips is "use pivots to know when to entry and when to exit" today we are going to explore this tips, before we go deeper, we need to know what are these pivot points??
Pivot points can be
very useful tool for intraday trading, because of inherited simplicity and ease
of usage , a large number of traders used it in past, using right now and we
can safely assume , that they will be using in future too.
Pivot point is a basic mathematical calculation w... Continue reading ...
RELIABILITY: HIGH · The first day is a White Marubuzo day · The second day is a Black Marubuzo day that gaps downward This pattern is a strong sign that the market is headed downward. With this indicator, the previous market direction is not as important as with other indicators.  Continue reading ...
How to identify it:
· Small real body at the lower end of the trading range · Upper shadow usually at least three times as long as the real body · No (or almost no) lower shadow The market gaps open above the previous day's close in an uptrend. It rallies to a new high then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would by an opening below ... Continue reading ...
RELIABILITY: HIGH How to identify it: · The first day is a long black day · The second, third, and fourth days have small real bodies and follow a brief uptrend pattern, but stay within the range of the first day · The fifth day is a long black day that closes below the close of the first day In a downtrend, a long black day occurs, following by three days of small real bodies that fall into a short uptrend. On the fifth day, the bears come in s... Continue reading ...
RELIABILITY: HIGH · First day is a long white day · Second day is a small day that gaps in the direction of the previous trend · the third day is a black day In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the... Continue reading ...
RELIABILITY: HIGH · First day is a long white day · Second day is a doji that gaps in the direction of the previous trend · The third day is a black day What it Means:In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the tre... Continue reading ...
RELIABILITY:MODERATE · A long white day occurs · The second day is a black day that completely engulfs the real body of the first day What it Means:Occurring in an uptrend, the Engulfing depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day's open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the... Continue reading ...
RELIABILITY:LOW/MODERATE · Small real body at the upper end of the trading range · Lower shadow at least twice as long as the real body · No (or almost no) upper shadow What it Means: There is a sharp sell off after the market opens during an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is ... Continue reading ...
RELIABILITY:MODERATE · First day is a long white day · Second day is a doji that gaps in the direction of the previous trend · The shadows of the doji should not be long  Continue reading ...
· First day is a long white day · Second day is black with an open above the high of the previous day · Second day closes within but below the midpoint of the first day's body In an uptrend the market gaps open, but loses ground to fall below the midpoint of the previous day. The Dark Cloud Cover pattern suggests an opportunity for the shorts to capitalize on the next day's open: a warning sign to bullish inves... Continue reading ...
RELIABILITY: High · First day is usually a long white day · Second day is a doji that gaps in the direction of the previous trend · The third day is a black day, gapping in the opposite direction, with no overlapping shadows In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely show... Continue reading ...
RELIABILITY :Moderate · A doji occurs on three consecutive trading days· The second doji gaps below the first and third In an long downtrend, the market shows signs of a rally as the real bodies have grown progressively smaller. The trend culminates with the bullish Tri Star, identifying that many bearish positions may be reversing.  Continue reading ...
RELIABILITY: High · The first day is a long white day · The second, third, and fourth days have small real bodies and follow a brief downtrend pattern, but stay within the range of the first day · The fifth day is a long white day that closes above the close of the first day In an uptrend, a long white day occurs, following by three days of small real bodies that fall into a short downtrend. On the fifth day, the bulls come in s... Continue reading ...
RELIABILITY:Moderate How to Identify it : · First day is a long black day · Second day is a white day with an open below previous days low · Second days close is within but above the midpoint of the first days body In a downtrend the market gaps open, but rallies strong to close above the previous days midpoint. This pattern suggests an opportunity for the bulls to enter the market and support the trend reversal. The Piercing Line pattern is the op... Continue reading ...
RELIABILITY: High How to identify it: · First day is a long black day · Second day is a small day that gaps in the direction of the previous trend · the third day is a white day In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have be... Continue reading ...
RELIABILITY : High · First day is a long black day · Second day is a doji that gaps in the direction of the previous trend · The third day is a white day What it Means :In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have be... Continue reading ...
· The first day is a Black Marubuzo day · The second day is a White Marubuzo day that gaps upward This pattern is a strong sign that the market is headed upward. With this indicator, the previous market direction is not as important as with other indicators  Continue reading ...
RELIABILITY: Low How to identify it:· A long black day occurs · The second day is a white day where the real body is completely engulfed by the After a long black day at the low end of a downtrend, a white candlestick opens higher than the previous day's close. The price is driven up, as many shorts are covered, which encourages further buy-ins. The Harami indicator should be confirmed with the next trading day's candlestick f... Continue reading ...
RELIABILITY: Low / Moderate How to Identify it :· Small real body at the lower end of the trading range · Upper shadow usually no more than twice as long as the real body · No (or almost no) lower shadow As the market opens below the close of the previous day, the bulls rally briefly, but not enough to close above the previous day's close. As this leaves shorts in a losing position, the Inverted Hammer presents the potential for an upcoming rally.... Continue reading ...
RELIABILITY:Moderate · A long black day occurs
What it Means:Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day's open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three O... Continue reading ...
RELIABILITY: Low / Moderate
How to identify it:
· Small real body at the upper end of the trading range · Lower shadow at least twice as long as the real body · No (or almost no) upper shadow There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (...
PATTERN: Reversal
· First day is a long black day · Second day is a doji that gaps in the direction of the previous trend · The shadows of the doji should not be long In a downtrend, the market bolsters the bears with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions ha...
· First day is usually a long black day · Second day is a doji that gaps in the direction of the previous trend · The third day is a white day, gapping in the opposite direction, with no overlapping In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows th... Continue reading ...
All of us know about the candlestick method of charting. In my last post. I have shown u how to plot a candlestick bar. The components of candle stick bar is quite similar to that of an OHLC bar, and I am sure that many of u wonder why should we prefer the candle stick bar against a simple OHLC bar? I did so in my early days
Its true that candle stick bar and OHLC bar are made from the same data, but the position of candle stick bar in the chart itself tells us about the possible way of future... Continue reading ...
How to plot a single OHLC bar
As already mentioned, its made up of open/high/low/close price of a given security.
A long straight line stands for the high and low where high is the highest point of that line and low is the lowest point of the line, which effectively defines the trading rangeThe open price is denoted by a tick on the left hand side and the clos price is denoted by a tick at the right hand side of the long straight line., viz the trading range
 How to plot a single candle stick b... Continue reading ...
Though thee are many types of chart but most important types are as follows
- Line chart
- Bar chart or OHLC chart
- Candle stick chart
Line chart
It is the very basic chart which consists of only closing price under a particular time frame, here, like any other chart, time scale remain along the X axis and price scale stays with Y axis and closing price of a security under a particular time frame is plotted and then joined by a line to get a line chart
Bar chart or ohlc chart As the name suggests this... Continue reading ...
The graphical representation of price action is the chart. It is so important to a technical analyst that often-technical analysts are called “chartist”. Without which, the very existence of a technical analyst will vanish, we can compare it to a rifle of a soldier, without a rifle, a soldier is also a lame duck. Just like that,without chart, a technical analyst can not survive in the market
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The technical analysis consists of the following three factors. These are most important here.
- Price .2. Time and 3. Volume
- Price—while in the market, a buyer creates the demand and the seller creates the supply force, we can say price the the point of negotiation which lets them exchange their needs
- Time – time is the time scale of exchange, under which the exchange is taking place
- Volume—under a given time. Then number of securities which changes hands from seller to buyer is the corresp...
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There are two broader ways to understand the market properly. One is fundamental analysis and another is technical analysis. These are two totally different approaches, which often conflicts in the process of decision-makings.
Before we go in to depth, let us know what they exactly stands for.
Fundamental analysis studies the “inner description” of the security. It includes the financial data which tries to emphasis upon SWOT viz the Strength, the Weakness, the Opportunity and finally, th... Continue reading ...
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