Following are some of the powerful sectors for the investors to make the investments in the current market situation. As per the facts this sectors can be very promisable for the traders.
The financial media promotes overtrading. Because if you’re not trading you’re not trying, right? Wrong. They create exciting stories about where markets will move and why. For many investors, the desire to play outweighs the desire to win. They rather medicate their boredom by making trades and hopping on the latest hot trend. The best traders are much less active than you’ve been led to believe. They aim to profit by riding long-term trends that play out over months and years, not minutes and hours. Trading on such short time frames gets you nowhere.
THE BEST TRADERS:
On average, trade each market only 1-3 times per year
Do not make predictions, but follow trends
Do not let short-term volatility shake them out of their positions
Do not feel the need to trade every day, every week or month; only when they see opportunity
2. GOING AGAINST THE TREND:
We all need a trend to make money. If we buy at price A, then we must sell at a higher price B in order to profit. Betting against trends is not only unnatural, but inherently unprofitable. Surfers do not try to ride waves out to sea. Those that do, wipe out – and look ridiculous. Traders do not make profit by holding long positions in downtrends or short positions in uptrends. In trading, the only thing that matters is price. Our job is to measure it and align with each market’s trend. How we do this doesn’t matter.
3. LETTING LOSSES RUN:
You must have an exit point for every investment you hold. Without one, whether you admit it or not, all of your money is at risk. Ya gotta know when to let it go. This goes for everything in life. If ascertain food doesn’t agree with your stomach, stop eating it. If an exercise gives you pain, stop doing it. If you’re dating a person who makes you miserable, break up with them and move on. When you let losses run, you waste resources – namely, time and money. But you also miss out on other opportunities. Exiting losing investments frees up your capacity to be deployed to new and possibly better opportunities in other markets or stocks
4. CUTTING WINNERS EARLY:
As the old saying goes: “If it ain’t broke, don’t fix it”. Investors are too eager to book gains, especially those that come quickly. Our lizard brain likes being right and feeling smart. When one of our investments shows a profit, our lizard brain wants us to quickly ring the register. This behavior comes at a cost though. Like pulling our flowers before they bloom, cutting winners inhibits us from generating huge gains. If you want big profits, you must hold your winners and let them grow. Investments do not always grow into big winners, but you allow them that chance. One or two big winners can make your year or even your career. You may be tempted to pull a George Costanza and go out on a high note, but George was one of the biggest losers in TV history. Selling your winners keeps your profits small and, thus, from major investing success.
PROFIT-LIMITING TACTICS INCLUDE:
Selling a position soon after it becomes profitable
Selling profit targets
Selling volatility targets
Selling price targets
5. IGNORING YOUR RISK TOLERANCE:
If you know how much pain you can take, you increase your odds of survival and winning Knowing your pain threshold allows you to grow at your desired speed. If you want to grow fast, you must take on more risk, but with more risk comes higher volatility and larger drawdowns. If you’re OK with this, great! If and when your performance becomes volatile, you won’t abandon your plan. As an investor, you want to stay away from your pain threshold or “uncle point” – the point at which you lose all faith in your plan. If your plan delivers too much volatility (especially on the downside) then you risk losing your discipline.
ADVANTAGES OF RISK AWARENESS:
Lower stress
Lower risk of aborting your plan
More capable of setting and managing performance expectations
6. NOT DIVERSIFYING:
What’s the point of diversification? To reduce your portfolio’s maximum loss below that of each individual investment’s. People prefer picking winners and betting it all. The possibility of making a lot of money in a short amount of time attracts many people to this strategy. Think: the lottery. In most years, a diversified portfolio rarely beats the absolute performance of the best performing market(s) or stock(s). Consistent underperformance in the short-term can be too much to bare for some investors. So, rather than striving for steadier long-term results by building a portfolio of dierent markets and strategies, they choose to move all of their money from one market to the next attempting to catch a big winner. This strategy inherently places more emphasis on Market-timing instead of diversification.
BENEFITS OF DIVERSIFICATION:
Rather than trade one market and experience all of the swings in that instrument, diversifying helps create a smoother ride.
By having a large number of markets in the portfolio, you can ride the ones on the move and avoid the choppy ones
Risking a small amount on each position, you do not have to win on every trade. You can still win even with 30-40% winners.
7. FOCUSING TOO MUCH ON WINNING PERCENTAGE:
Winning percentage matters, but so does the size of your winners. The combination of your winning percentage and average winner size tells you if you have a good strategy. No one can accurately pick winners above a 70-80% rate for an entire career. Not happening. Has never happened. Will never happen. But it doesn’t need to happen. The best traders can produce win rates of only 30-40% and still produce huge profits. How? They make up for their low winning percentage by letting their winners run. They do not cap their profit potential. If they did, then they’d have to be much more accurate in order to maintain their large profits
8. PAYING TOO MUCH ATTENTION TO NEWS AND “EXPERTS”:
Convincing media outlets can force you to jump o-your plan, often at the wrong times. TV and online personalities pitch their ideas every single day. Their job is to get you to tune in. Their strategy is selling certainty – making you believe they know what’s coming next. Investors without a plan of their own become susceptible to falling hard for convincing stock picks-jumping from one idea to the next. Media only focuses on 1) what markets to trade and 2) when to enter. They never talk about position sizing or exit methodology to protect your capital if/when the market goes against you. Investors must not concerned with pie in the sky ideas. They first must have a plan of their own and then be able to tune out other people’s opinions. When you have a plan, you already have all you need to be successful.
The open and the close are the same or nearly the same.
The length of the shadow should not be excessively long, especially when viewed at the end of a bullish trend.
Signal Enhancements:
A gap away from the previous day’s close sets up for a stronger reversal move.
Large volume on the signal day increases the chances that a blowoff day has occurred, although it is not a necessity.
It is more effective after a long candle body, usually an exaggerated daily move compared to the normal daily trading range seen in the majority of the trend.
https://www.youtube.com/watch?v=YWMcGyD2a4I&t=1s
2. Bullish Engulfing
Criteria:
The body of the second day completely engulfs the body of the first day. Shadows are not a consideration.
Prices have been in a definable uptrend, even if it has been short term.
The body of the second candle is the opposite color of the first candle,the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a Doji or an extremely small body.
Signal Enhancements:
A large body engulfing a small body. The previous day was showing that the trend was running out of steam. The large body shows that the new direction has started with good force.
When the Engulfing Pattern occurs after a fast move down, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over-extended and increases the potential for profit taking.
Large volume on the engulfing day increases the chances that a blowoff day has occurred.
The engulfing body engulfing more than one previous body demonstrates power in the reversal.
If the engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working.
The greater the open gaps down from the previous close, the greater the probability of a strong reversal.
3. Bearish Engulfing
Criteria:
The body of the second day completely engulfs the body of the first day.Shadows are not a consideration.
Prices have been in a definable uptrend, even if it has been short term.
The body of the second candle is the opposite color of the first candle,the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a Doji or an extremely small body.
Signal Enhancements:
A large body engulfing a small body. The previous day was showing that the trend was running out of steam. The large body shows that the new trend was running out of steam. The large body shows that the new.
When the Engulfing Pattern occurs after a fast spike up, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over-extended and increases the potential for profit taking and a meaningful pullback.
Large volume on the engulfing day increases the chances that a blowoff day has occurred.
The engulfing body engulfing more than one previous body demonstrates power in the reversal.
If the engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working.
The greater the open gaps up from the previous close, the greater the probability of a strong reversal.
The lower shadow should be at least two times the length of the body.
The real body is at the upper end of the trading range. The color of the body is not important although a white body should have slightly more bullish implications.
There should be no upper shadow or a very small upper shadow.
The following day needs to confirm the Hammer signal with a strong bullish day.
Signal Enhancements:
The longer the lower shadow, the higher the potential of a reversal occurring.
A gap down from the previous day’s close sets up for a stronger reversal move provided the day after the Hammer signal opens higher.
Large volume on the Hammer day increases the chances that a blowoff day has occurred.
5. Hanging Man
Criteria:
The upper shadow should be at least two times the length of the body.
The real body is at the upper end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
There should be no upper shadow or a very small upper shadow.
The following day needs to confirm the Hanging Man signal with a blackcandle or, better yet, a gap down with a lower close.
Signal Enhancements:
The longer the lower shadow, the higher the potential of a reversal occurring.
A gap up from the previous day’s close sets up for a stronger reversal move provided the day after the Hanging Man signal trades lower.
Large volume on the signal day increases the chances that a blowoff day has occurred, although it is not a necessity.
6. Piercing Candle
Criteria:
The body of the first candle is black; the body of the second candle is white.
The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
The second day opens lower than the trading of the prior day.
The white candle closes more than halfway up the black candle.
Signal Enhancements:
The longer the black candle and the white candle, the more forceful the reversal.
The greater the gap down from the previous day’s close, the more pronounced the reversal.
The higher the white candle closes into the black candle, the stronger the reversal.
Large volume during these two trading days is a significant confirmation.
7.Dark Cloud Cover
Criteria:
The body of the first candle is white; the body of the second candle is black.
The uptrend has been evident for a good period. A long white candle occurs at the top of the trend.
The second day opens higher than the trading of the prior day.
The black candle closes more than halfway down the white candle.
Signal Enhancements:
The longer the white candle and the black candle, the more forceful the reversal.
The higher the gap up from the previous day’s close, the more pronounced the reversal.
The lower the black candle closes into the white candle, the stronger the reversal.
Large volume during these two trading days is a significant confirmation.
8. Bullish Harami
Criteria:
The body of the first candle is black; the body of the second candle is white.
The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
The second day opens higher than the close of the previous day and closes lower than the open of the prior day.
Unlike the Western Inside Day, just the body needs to remain in the previous day’s body, whereas the Inside Day requires both the body and the shadows to remain inside the previous day’s body.
For a reversal signal, further confirmation is required to indicate that the trend is now moving up.
Signal Enhancements:
The longer the black candle and the white candle, the more forceful the reversal.
The higher the white candle closes up on the black candle, the more convincing the signal that a reversal has occurred despite the size of the white candle.
9. Bearish Harami
Criteria:
The body of the first candle is white; the body of the second candle is black.
The uptrend has been apparent. A long white candle occurs at the end of the trend.
The second day opens lower than the close of the previous day and closes higher than the open of the prior day.
For a reversal signal, confirmation is needed. The next day should show weakness.
Signal Enhancements:
The longer the white candle and the black candle, the more forceful the reversal.
The lower the black candle closes down on the white candle, the more convincing that a reversal has occurred, despite the size of the black candle.
10.Morning Star
Criteria:
The downtrend has been apparent.
The body of the first candle is black, continuing the current trend. The second candle is an indecision formation.
The third day shows evidence that the bulls have stepped in. That candle should close at least halfway up the black candle.
Signal Enhancements:
The longer the black candle and the white candle, the more forceful the reversal.
The more indecision that the star day illustrates, the better probabilities that a reversal will occur.
A gap between the first day and the second day adds to the probability that a reversal is occurring.
A gap before and after the star day is even more desirable.
The magnitude, that the third day comes up into the black candle of the first day, indicates the strength of the reversal.
11.Evening Star
Criteria:
The uptrend has been apparent.
The body of the first candle is white, continuing the current trend. The second candle is an indecision formation.
The third day shows evidence that the bears have stepped in. That candle should close at least halfway down the white candle.
Signal Enhancements:
The longer the white candle and the black candle, the more forceful the reversal.
The more indecision that the star day illustrates, the better probabilities that a reversal will occur.
A gap between the first day and the second day adds to the probability that a reversal is occurring.
A gap before and after the star day is even more desirable. The magnitude, that the third day comes down into the white candle of the first day, indicates the strength of the reversal.
12. Kicker
Criteria:
The first day’s open and the second day’s open are the same. The price movement is in opposite directions from the opening price.
The trend has no relevance in a kicker situation.
The signal is usually formed by surprise news before or after market hours.
The price never retraces into the previous day’s trading range.
Signal Enhancements:
The longer the candles, the more dramatic the price reversal.
Opening from yesterday’s close to yesterday’s open already is a gap. However, gapping away from the previous day’s open further enhances the reversal.
13. Shooting Star
Criteria:
The upper shadow should be at least two times the length of the body.
The real body is at the lower end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
There should be no lower shadow or a small lower shadow.
The following day needs to confirm the Shooting Star signal with a black candle or, better yet, a gap down with a lower close.
Signal Enhancements:
The longer the upper shadow, the higher the potential of a reversal occurring.
A gap up from the previous day’s close sets up for a stronger reversal move.
The day after the Shooting Star signal opens lower.
Large volume on the Shooting Star day increases the chances that a blowoff day has occurred, although it is not a necessity.
14. Inverted Hammers
Criteria:
The upper shadow should be at least two times the length of the body.
2. The real body is at the lower end of the trading range. The color of the body is not important, although a white body should have slightly more bullish implications.
There should be no lower shadow or a very small lower shadow.
The following day needs to confirm the Inverted Hammer signal with a strong bullish day.
Signal Enhancements:
The longer the upper shadow, the higher the potential of a reversal occurring.
A gap down from the previous day’s close sets up for a stronger reversal move provided.
The day after the hammer signal opens higher.
Large volume on the Reverse Hammer day increases the chances that a blowoff day has occurred.
https://www.youtube.com/watch?v=q2BvvyL0z8c
15. Tri Star
Criteria:
All three days are Dojis.
The middle day gaps above or below the first and third day. The length of the shadow should not be excessively long, especially when viewed at the end of a bullish trend.
Signal Enhancements:
The greater the gap, away from the previous day’s close, the more it sets up for a stronger reversal move.
Large volume on one of the signal days increases the chances that a significant reversal is taking place.
16. Three Black Crows
Criteria:
Three long black bodies occur, all of nearly equal length.
The prior trend should have been up.
Each day opens within the body of the previous day.
Each day closes near its low.
17. Two Crow
Criteria:
A long white candle continues the uptrend.
The real body of the next day is black while gapping up and not filling the gap.
The third day opens within the second day’s body and closes within the white candle’s body. This produces a black candle that fills in the gap.
Signal Enhancements:
If the third day was to close more than halfway down the white candle, it would form an Evening Star pattern.
18. UpSide Gap Two Crows
Criteria:
A long white candle continues the uptrend.
The real body of the next day is black while gapping up and not filling the gap.
The third day opens higher than the second day’s open and closes below the second day’s close. This produces a black candle that completely engulfs the small black candle.
The close of the third day is still above the close of the last white candle.
Signal Enhancements:
If the third day were to close within the white candle, it would become Two Crows.
19. Counterattack Lines
Criteria:
The first Candlestick body should continue the prevailing trend.
The second Candlestick gaps open continuing the trend.
The real body of the second day closes at the close of the first day.
The body of the second day is the opposite color of the first day’s.
Both days should be long candle days.
Signal Enhancements:
The longer the bodies, the more significant the reversal pattern.
20. Belt Hold
Criteria:
The Candlestick body should be the opposite color of the prevailing trend.
It significantly gaps open, continuing the trend.
The real body of the Candlestick has no shadow at the open end. The open is the high or low of that trend.
The length of the body should be a long body. The greater the length,the more significant the reversal signal.
Signal Enhancements:
The longer the body, the more significant the reversal pattern.
21. Unique Three River Bottom
Criteria:
The Candlestick body of the first day is a long black candle, consistent with the prevailing trend.
The second day does a Harami/Hammer. It also has a black body.
The second day’s shadow has set a new low.
The third day opens lower, but not below the lowest point of the previous day. It closes higher but below yesterday’s close.
Signal Enhancements:
The longer the shadow of the second day, the probability of a successful reversal becomes greater.
22. Breakaways
Criteria:
The first day is a long-body day and has the color of the existing trend.
The second day gaps away from the previous close. It has the same color as the first day candle.
Days three and four have closes that continue the trend.
The last day is an opposite-color day that closes in the gap area between day one and day two.
23. Three Inside Up & Three Inside Down
Criteria:
The Harami pattern is the overriding signal component of this pattern.
The harami body should be the opposite color of the long candle day.
Day three has a close that is higher than the open of day one. Or lower than day one in the bearish indicator.
24. Three Stars In The South
Criteria:
The first black candle day has a lower shadow that indicates buying stepping in—almost a Hammer but not quite.
The second day is like the first but on a smaller scale.
Day three should be a Marubozu with no shadows. It is within the previous day’s trading range.
25. Three White Soldiers
Criteria:
Each consecutive long candle closes with a higher close.
The second and third Candlesticks open in the previous day’s body.
The opens should be within the top half of the previous day’s body.
26. Advance Block
Criteria:
Each white candle occurs with higher closes.
The opens occur in the previous day’s body.
The bodies are getting smaller, and/or the upper shadows are getting longer.
27. Deliberation
Criteria:
The first two white candles are relatively equal long candles.
The third day is a small body.
The small body opened at or very near the previous day’s close. Or it may have gapped up slightly.
28. Concealing Baby Swallow
Criteria:
Two large Black Marubozus make up the beginning of this pattern.
The third day is a Reverse Hammer formation. It gaps down from the previous day’s close.
The final day completely engulfs the third day, including the shadow.
29. Stick Sandwich
Criteria:
A downtrend is concluded with a large black candle followed by a white candle. The white candle opens above the black candle close and closes above the black candle’s open.
The final day completely engulfs the white candle and closes at the same level as the previous black candle.
30. Homing Pigeon
Criteria:
The body of the first candle is black; the body of the second candle is black.
The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
The second day opens higher than the close of the previous day and closes lower than the open but above the closing price of the prior day.
Unlike the Western Inside Day, just the body needs to remain in the previous day’s body, whereas the Inside Day requires both the body and the shadows to remain inside the previous day’s body.
For a reversal signal, further confirmation is required to indicate that the trend is moving up.
Signal Enhancements:
The higher the second candle closes up on the first black candle, the more convincing it is that a reversal has occurred.
31. Ladder Bottom
Criteria:
Like the Three Black Crows pattern, the beginning of the signal has three black candle days, each with lower opens and closes of the previous day.
The fourth day resembles a reverse hammer, opening, then trading up during the day before closing on its low.
The final day opens above the open of the previous day open, a gap up and upward continuation for the rest the day, a Kicker-type pattern. It finally closes above the trading range of the previous three days.
32. Matching Low
Criteria:
The body of the first candle is black; the body of the second candle is black.
The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
The second day opens higher than the close of the previous day and closes at the same close as the prior day.
For a reversal signal, further confirmation is required to indicate that the trend is moving up.
33. Upside Tasuki Gap
Criteria:
An uptrend is in progress. A gap occurs between two candles of the same color.
The color of the first two candles is the same as the prevailing trend.
The third day, an opposite color candlestick opens within the previous candle and closes below the previous open.
The third day close does not fill the gap between the two white candles.
The last two candles, opposite colors, are usually about the same size.
34. Downside Tasuki Gap
Criteria:
A downtrend is in progress. A gap occurs between two candles of the same color.
The color of the first two candles is the same as the prevailing trend.
The third day, an opposite color Candlestick opens within the previous candle and closes below the previous open.
The third day close does not fill the gap between the two black candles.
The last two candles, opposite colors, are usually about the same size.
35. On Neck Line
Criteria:
A long black candle forms in a downtrend.
The next day gaps down from the previous day’s close; however, the body is usually smaller than one seen in the Meeting Line pattern.
The second day closes at the low of the previous day.
36. In Neck Line
Criteria:
A long black candle forms in a downtrend.
The next day gaps down from the previous day’s close; however, the body is usually smaller than one seen in the Meeting Line pattern.
The second day closes at the close or just slightly above the close of the previous day.
37. Thrusting
Criteria:
A long black candle forms in a downtrend.
The next day gaps down from the previous day’s close; however, the body is usually bigger than the ones found in the On Neck and In Neck patterns.
The second day closes just slightly below the midpoint of the previous day’s candle.
38. Rising Three Method
Criteria:
An uptrend is in progress. A long white candle forms.
A group of small-bodied candles follow, preferably black bodies.
The close of any of the pullback days does not close lower than the open of the big white candle.
The final day opens up into the body of the last pullback day and proceeds to close above the close of the first big white candle day.
39. Falling Three Method
Criteria:
A downtrend is in progress. A long black candle forms.
A group of small-bodied candles follows, preferably white bodied.
The close of any of the uptrend days does not close higher than the open of the big white candle.
The final day opens up into the body of the last uptrend day and proceeds to close below the close of the first big black candle day.
40. Side By Side white Lines
Criteria:
An uptrend is in progress. A gap occurs between two candles of the same color.
The color of the first two candles is the same as the prevailing trend.
The third day, a candle opens at the same or near the open price of the previous day.
The third day closes near the close of the previous day.
41. Separating Lines
Criteria:
An uptrend is in progress. Then a day occurs that is the opposite color of the current trend.
The second day opens at the open of the previous day.
The second day should open on its low for the day and proceed higher.
42. Mat Hold
Criteria:
An uptrend is in progress. A long white candle forms.
A gap up day that closes lower than its open creates a small black candle.
The next two days form small candles somewhat like the Rising Three Method.
The final day gaps up and closes above the trading ranges of the previous four days.
43. Three Line Strike
Criteria:
Three White Soldiers, three white candles, are continuing an uptrend.
The fourth day opens higher, but then pulls back to close below the open of the first white candle.
“Volume Weighted Average Price (VWAP) is a technical analysis tool used to measure the average price weighted by Volume. VWAP is typically used with intraday charts as away to determine the general direction of intraday prices. VWAP is similar to a moving average in that when price is above VWAP, prices are rising & when price is below VWAP, prices are falling VWAP is primarily used by technical analysts to identify market trend.”
Full form of VWAP is Volume Weight Average Price. The average price weighted by volume. VWAP is a trading tool calculated by taking the number of shares bought times the share price & dividing by total shares.
Volume Weighted Average Price is an Indicator, or used for Intraday trading. VWAP equals the dollar value of all trading periods divided by the total trading volume of the current day.
The VWAP appears as a single line on intraday chart (1min,5min,15min & so on), similar to how a moving average looks. The calculation starts when trading opens & when it closes. Because it is good for the current trading day only , intraday periods & data are used in the calculation.
HOW TO CALCULATE VWAP:
VWAP is calculated through the following steps:
For each period, calculate the typical price, which is equal to the sum of the high, low, and close price divided by three [(H+L+C)/3]. One bar or candlestick is equal to one period. What this period is set at is up to the trader’s discretion (e.g., 5-minute, 30-minute, etc.).
Take the typical price (TP) and multiply by the volume (V), giving a value TP*V.
Keep a running tabulation of the TP*V totals as well as a running tally of volume totals. These are additive and aggregate over the course of the day.
VWAP is calculated by the formula: cumulative TP*V / cumulative volume
This calculation, when run on every period, will produce a volume weighted average price for each data point. This information will be overlaid on the price chart and form a line, similar to the first image in this article.
Moving VWAP is simply adding up various end-of-day VWAP figures and averaging them out over a user-specified number of periods.
VWAP will be calculated automatically in one’s charting software. There should be no mathematical or numerical variables that need adjustment. On the moving VWAP indicator, one will need to set the desired number of periods.
HOW TO ANALYSIS VWAP:
VWAP initiate at the opening price level, & will move up or down with price movement & volume as the session continues. It can help to eliminate a lot of the noise within a stock throughout the day, even more so than a moving average would. It is compared at time to a moving average, & though it shares similarities, they are not the same.
It’s said when price is below the indicators, the stock is in downtrend or there is a downtrend bias to the day and when price is above the indicator, the stock is a uptrend.
Find the average price the stock traded at over the first five-minute period of the day. To do this, add the high, low, and close, then divide by three. Multiply this by the volume for that period. Record the result in a spreadsheet, under column PV.
Divide PV by the volume for that period. This will give the VWAP value.
To maintain the VWAP value throughout the day, continue to add the PV value from each period to the prior values. Divide this total by total volume up to that point. To make this easier in a spreadsheet, create columns for cumulative PV and cumulative volume. Both these cumulative values are divided by each other to produce VWAP.
VWAP Pullback Entry:
Entry Option 1 – Aggressive Traders
Wait for a break of the VWAP and then look at the tape action on the time and sales.
You will need to identify when the selling pressure is spiking, and the tape is going crazy.
This, my friend, is more art than science and will require you to practice reading the tape.
The goal is to identify when the selling pressure is likely to subside and then enter the trade.
This approach will break most entry rules found on the web of simply buying on the test of the VWAP. The problem with this approach is you don’t know if the price will breach the VWAP by 1% or 4%.
I learned the hard way, and if the VWAP were at $10, I would place my limit order at $10. At times there were traders who couldn’t care less about the VWAP, and it would slice through the indicator with such swiftness, the lasting sting to my psyche persists until this day.
This technique of using the tape is not easy to illustrate looking at the end of day chart. You will need to practice this approach using Tradingsim to assess how close you can come to calling the turning point based on order flow.
VWAP Breakout Entry:
Entry Option 2 – Risk Averse Traders
This is what I would recommend to traders that are new to the VWAP indicator.
Essentially, you wait for the stock to test the VWAP to the downside. Next, you will want to look for the stock to close above the VWAP.
You will then place your buy order above the high of the candle that closed above the VWAP.
While this is a more conservative approach for trade entry, it will open you up to more risk as you will likely be a few percentage points off the low.
You will need to determine where you are in your trading journey and your appetite for risk to assess which entry option works best for you.
It goes without saying that while we have covered long trades; these trading rules apply for short trades, just do the inverse.
The Internet is stuffed with resources. You’ll find tons of data out there free of charge. However, as the count increases, it’s actually inconceivable to remember all of the websites that you simply visit even in a single day.
However, when the subject comes to acquiring the related info and the maximum information and all the related data, one always wish to persist with his favorite websites where he may get all the quality information.
Stock market investing is a risky venture. It’s worthwhile to be very cautious whereas putting your hard-earned money into it. Before diving into the dynamic stock market, you must possess the best set of information and sufficient information. So, as an investor, you should be aware of a few of the finest websites for Indian stock market analysis.
All have their own favorites! However, in terms of selecting the most effective websites for Indian stock market research, we would have a standard selection. Let’s see if our choice matches together with your short term and long term investing objectives.
The website was started by the husband and wife team of Victor and Sangeeta Fernandes. In 2000, it was acquired by E-Eighteen dot com, a subsidiary of the Indian TV channel TV18. The couple were given 7.5% of the equity capital and E-18 got 92.5% following the acquisition. In 2014, Reliance Industries acquired Network 18 and TV18. This acquisition included Moneycontrol.com and several other websites and channels owned by TV18.
Moneycontrol is definitely the preferred website among the many Indian stock investor. You’ll find all types of information on this website like market news, trends, charts, livestock prices, commodities, currencies, mutual funds, personal finance, IPOs and many others.
That is certainly one of many extremely standard stock market website for an Indian investor. In different words, it may be considered probably the most accessed website, each by potential and present stock investors.
You even have a platform to track your investments and create a wish list too. Furthermore, Money Control mobile app is much more handy to put in and use. So, an entire bundle for a stock investor, whether a beginner or a professional.
It gives numerous stock securities info like their Sensex and Nifty value. Stock securities include Equities, debts, Latest IPOs, currencies, live stocks, commodities, and derivatives. Historic knowledge and present efficiency of the various companies can also find right here.
Forums are also facilitated for doing discussions in the group. You’ll be able to refer to those boards and may update yourself with the updated information.
The National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, situated in Mumbai. The NSE was established in 1992 as the primary demutualized electronic trade within the nation. NSE was the primary exchange within the nation to offer a modern, totally automated screen-based electronic trading system which provided simple trading facility to the traders spread throughout the length and breadth of the country. Vikram Limaye is Managing Director & Chief Executive Officer of NSE.
It has a complete market capitalization of greater than US$2.27 trillion, making it the world’s 11th-largest stock exchange as of April 2018. NSE’s flagship index, the NIFTY 50, the 50 stock index is used extensively by investors in India and all over the world as a barometer of the Indian capital markets. Nifty 50 index was launched in 1996 by the NSE. Nevertheless, Vaidyanathan (2016) estimates that solely about 4% of the Indian economic system / GDP is definitely derived from the stock exchanges in India.
In contrast to countries like America where nearly 70% of the GDP is derived from bigger companies and the corporate sector, the corporate sector in India accounts for only 12-14% of the nationwide GDP (as of October 2016). Of these solely 7,800 corporations are listed of which solely 4000 commerce on the inventory exchanges at BSE and NSE. Therefore the stocks trading on the BSE and NSE account for under round 4% of the Indian economic system, which derives most of its earnings associated exercise from the so-called unorganized sector and households.
As the company has an obligation to submit their financial reviews to the NSE, therefore you may always find the financial information of any firm right here, in case you may find it elsewhere. You’ll find details about the corporates, domestic and foreign buyers, new listings, IPO and many others. NSE India also offers programs and certifications.
It ranks effectively within the prime stock research websites in India. You get to see tons of historic information relating to NSE and Nifty as effectively. You additionally take pleasure in free technical analysis of Indian stocks, reports, charts and different website tools.
The Bombay stock exchange was founded by Premchand Roychand. He was probably the most influential businessmen in 19th-century Bombay. A person who made a fortune within the stockbroking business and got here to be often known as the Cotton King, the Bullion King or simply the Big Bull. He was also the founding father of the Native Share and Stock Brokers Affiliation, an institution that’s now referred to as the BSE.
Whereas BSE Ltd is now synonymous with Dalal Street, it was not all the time so. The first venue of the earliest stock broker meetings within the 1850s was in relatively pure environs – beneath banyan trees – in entrance of the Town Hall, the place Horniman Circle is now located. A decade later, the brokers moved their venue to a different set of foliage, this time under banyan trees at the junction of Meadows Street and what’s now referred to as Mahatma Gandhi Road. The group ultimately moved to Dalal Street in 1874 and have become an official group referred to as “The Native Share & Stock Brokers Association” in 1875.
On August 31, 1957, the BSE grew to become the primary stock exchange to be acknowledged by the Indian Government under the Securities Contracts Regulation Act. Historically an open outcry flooring trading exchange, the Bombay Stock Exchange switched to an electronic trading system developed by CMC Ltd. in 1995. It took the exchange solely 50 days to make this transition. The BSE has also launched a centralized exchange-based internet trading system, BSEWEBx.co.in to allow traders wherever on the planet to trade on the BSE platform.
The BSE can also be a Partner Exchange of the United Nations Sustainable Stock Exchange initiative, becoming a member of in September 2012.
BSE established India INX on 30 December 2016. India INX is the first international exchange of India.
That is much like NSE India. Nevertheless, you will discover extra historic information right here as BSE Sensex has been included for an extended time in comparison with NSE Nifty.
As well as, over 5,500 companies are listed on BSE whose company actions and financial information could be found on this website. You may also obtain the whole checklist of ‘public’ companies from this website.
Investing.com is a global financial portal and internet brand owned by Fusion Media Limited, registered in the British Virgin Islands, composed of 28 editions in 21 languages and mobile apps for Android and iOS that provide news, analysis, streaming quotes and charts, technical data and financial tools about the global financial markets. The editions each cover a broad variety of financial vehicles including Stocks, Bonds, Commodities, Currencies, Interest Rates, Futures and Options
Branded initially as Forexpros.com, the portal launched in 2007 with editions in four languages: English, Spanish, Hebrew and Arabic, offering free data, information, analysis, news and tools over the Forex market for traders. Six additional editions followed in 2008, growing to a total of 18 different localized editions by the end of 2011.
Investing.com currently offers 30 localized (Language localisation) editions in 22 languages including: Arabic, Chinese, Dutch, English, Finnish, French, German, Greek, Hebrew, Italian, Indonesian, Japanese, Korean, Malay, Polish, Portuguese, Russian, Spanish, Swedish, Thai, Turkish and Vietnamese. Additional editions are dedicated to the Australian, Brazilian, Canadian, Hong Kong, Indian, Mexican and South African markets.
Investing is a good site if you want to find all the information on the same website simultaneously. You can do both fundamental and technical analysis of stocks on this website. The different options available on this website are general info, chart, news and analysis, financials, technicals, forum etc.
Its wide range of tools and comprehensive data can surely incline any investor towards it. Stock screener, Fed rate monitor tool and currency converter are the biggest attractions. The live and interactive charts, stocks charts, indices and forex charts further add to its advantages.
Investing is just like the best newspaper for stock market India.The screen of the site reproduces every detail information towards you regarding the NAV value of your stocks, the index value, the peer information and many other details which can be simplified by customizing the screen according to your preferences.
Screener, a stock analysis instrument especially meant for equity traders in India. With this, you’ll be able to have entry to long term financials of various companies and additional simplify it. Thereby, turning lengthy knowledge into small helpful chunks by customised studies. So, you’ll be able to simply make your self acquainted with helpful financial info of an organization.
Furthermore, with the assistance of it’s screening instrument, you’ll be able to design your personalised display screen and get computerized alerts to trace outcomes. A mixture of a “Firm evaluation” and a “screening” instrument, this absolutely attracts readers to navigate by it.
It is among the greatest Indian stock market technical evaluation web site. It serves you normal details about the market financial system, the corporate efficiency previously and the current, their friends out there and their efficiency too, the corporate’s revenue and losses and the balance sheet, analysis studies and numerous evaluation instruments just like the charts are provided on this platform.
The sophisticated lengthy knowledge might be personalised and customised as per your selection and choice which is able to simplify the understanding.It additionally supplies display screen alerts on the person’s mobile and the websites additionally for each up to date info in the market.
One other mistake new investors make is utilizing borrowed funds to pay for shares. That is nearly at all times a horrible concept that may result in disaster. Once you borrow cash to spend money on shares, you might be inviting one other particular person or establishment which can not have your greatest curiosity at coronary heart into the decision-making course of. Cease the entire nonsense about “good debt” and “dangerous debt” and notice that threat discount is usually extra vital than your compound annual progress fee.
2. Know What You Need, And What You’re Paying For.
The evolving brokerage business is a beehive of competitors to supply the most recent and biggest buying and selling choices, however for many buyers the essential necessities could be discovered wherever.
Ensure you know the kind of purchase or promote order you are coming into. A market order, as an illustration, will likely be executed as quickly as doable, regardless of the prevailing market value; a restrict order against this will solely full the transaction inside value parameters you have established.
3. Different brokerages have different strengths and weaknesses.
Naturally, totally different brokerages have very totally different strengths and weaknesses. Some have very excessive charges on transactions however will provide a ton of assist to particular person buyers. Others may provide decrease charges however be very hands-off. Some may cost nothing for sure sorts of transactions (often if you’re shopping for the corporate’s personal investments, which I’ll clarify beneath).
What brokerage do I take advantage of? I take advantage of Motilal Oswal. That is largely as a result of I make investments my very own cash in it for which they don’t cost any excessive transaction charges. You’ll be able to examine Motilal Oswal brokerage companies in my subsequent weblog.
4. The Chart
Studying to learn a chart is a talent that takes time, however primary chart studying takes little or no talent. As famed investor Dennis Gartman says on a regular basis on CNBC, if an funding’s chart begins on the decrease left and ends on the higher proper, that is a very good factor. If the chart is heading down, keep away and do not attempt to determine why. There are literally thousands of shares to select from with out choosing one that’s shedding cash. If you happen to actually imagine on this inventory, put it in your watch checklist and are available again to it at a later time.
There are lots of individuals who imagine in investing in shares which have scary wanting charts, however they’ve analysis time and sources that you simply most likely do not.
5. Buy Low, Sell High.
Sounds so easy proper? And but investing is a uncommon a part of our monetary lives the place issues getting cheaper seems like a nasty factor. Few shoppers are lamenting cheaper costs on the pump amid the collapse in oil costs over the past yr and a half, but a reasonable market fall is handled because the dying knell for the bull market.
These are information that aren’t mutually unique: the present bull market will finish, and over nearly any long-term horizon shares have confirmed to be useful investments that usually grind increased.
6. Trade what you see, not what you Think.
As a dealer, you could have most likely learn that you should management your feelings and give attention to logic and objectivity as an alternative of giving into the impulses of greed, hope, and concern. Nevertheless, it’s one factor to know you shouldn’t commerce emotionally and one other to truly know HOW to NOT commerce emotionally and how you can implement this information.
Whereas “buying and selling what you see” describes the optimum state of affairs during which merchants make goal choices primarily based on sound value evaluation, “commerce what you assume” is the precise reverse and it’s how nearly all of merchants make their buying and selling choices – pushed by feelings, impulses and wishful considering.
As a way to turn out to be a persistently worthwhile dealer it’s needed to plot a plan utilizing our extra logical and goal frontal lobe part of the mind, which is the latest space of the human mind and permits us to plan, motive, and comprehend sophisticated concepts.
By studying to commerce what we see, and never what we expect, we will ensure that we’re working on logic and objectivity as an alternative of emotion.
7. Watch out for red flags.
There are a number of pink flags to look at for when selecting shares. Simply to call a number of, rookies ought to keep away from the next sorts of shares
Corporations that do not earn any earnings
Shares whose share costs appear to at all times drop (have a look at the three- or five-year chart)
Corporations which are beneath investigation
Corporations with a lot of debt
Shares with current dividend cuts, or an unstable dividend historical past
8. Don’t put all Eggs in one basket.
It is a piece of recommendation which signifies that one shouldn’t focus all efforts and sources in a single space as one may lose every part.
Don’t pull all of your eggs in a single basket; means don’t threat every part . If you happen to maintain all of your egg in a single basket, if the basket will get stolen or somebody drop the basket then you find yourself shedding all of your eggs. However however in case you had stored your eggs on a number of baskets and if one had been dropped by somebody or received stolen. Then you definately would have free solely a few of your eggs not all.
This proverb can be relevant in stock Market.
If you happen to make investments your total cash on one shares, and if the share goes down, it can take you down. That’s the reason it’s suggested by no means totally depending on one share. As a substitute make investments on a number of shares. Thus if one goes down you lose few cash not all.
9. If you cannot control your emotions, you cannot be in share market.
Unless you can watch your stock, holding decline by 50% without becoming panic, you should not be in stock market.
Don’t let feelings cloud your judgement. Many buyers have been shedding cash in stock markets because of their lack of ability to manage feelings, significantly concern and greed.In a bear market, however, buyers panic and promote their shares at rock-bottom costs.
Greed augments when buyers hear tales of fabulous returns being made within the stock market in a brief time frame. “This leads them to take a position, purchase shares of unknown corporations or create heavy positions within the futures phase with out actually understanding the dangers concerned.”
As a substitute of making wealth, these buyers thus burn their fingers very badly the second the sentiment available in the market reverses. In a bear market, however, buyers panic and promote their shares at rock-bottom costs. Thus, concern and greed are the worst feelings to really feel when investing, and it’s higher to not be guided by them.
10. Buy right and hold tight.
In share market before buying anything one should have a total knowledge about it, because right buying is one of the most important factor in share market. Before buying any share there are certain parameters one should look. Buying right in shares means you have to see the Fundamental Analysis should be strong.
It should be technically strong and its should up trending. One should also see that the company must be listed at least from last 5-7 years. Also should check the dividend ratio of last few years.
And once this all parameters are in favor, the shares are purchased the the role come of hold tight. Try to hold the shares for longer time to take the benefits of it. Just because the rates are falling or rising that dosen’t means it’s a right time to sell it. We should have a control on it and try to hold the shares. Selling of shares should be depend on it’s graphs, charts & company condition and not the price. Yes, price may also be one of the reason for selling the shares, but should not be the only factor.
Technical analysis is the forecasting of future financial price movement based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute prediction about the future. Instead, technical analysis can help investors anticipate what is “likely” to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.
Technical analysis is a study of a particular script by historic Rate, volume & quantity. By studying technical analysis we can predict the price movement in market & a particular share. By studying charts we can easily understand the price movement happened in history & we can understand the trend in market. Share price movement at what price the share will move when will it move and when will it fall can be studies through chart analysis. Therefore, chart is the foundation of this market & it will always be there.
TREND:
While trading in stock market understanding trend through technical analysis is important.
Trend is a way or a direction which helps in change of rate of shares.
There are 3 important parts of trend
UP trend
DOWN trend
SIDEWAYS trend
a. UP TREND:
If a particular share is on the verge to go up then it is known as up trend.
There is huge volume build up in starting. So everyone starts buying so many times scripts intends to have upper circuit.
In this trend, script moves higher high means its beats last high price & higher low means it breaks the low of last low.
b. DOWN TREND:
If the price of the a particular script goes down day by day then its called as down trend.
There is huge selling volume in done trend.
Lot of traders do short selling in this trend so there are chances of lower circuit.
In this trend scripts starts making lower rate of high & lower low means last low rate less low.
c. SIDE WAYS TREND:
Investors get bored in this trend.
The stock way is not clear in this trend.
Volume during sideways market is very less.
Intraday traders get very less chance to participate there are more possibilities of Stoploss to hit.
VOLUME:
Volume means in a particular time how much buy-sell happened which produced turnover.
Volume means number of traded quantity of shares in specified time.
In share market more volume means the stock is more active & liquid.
Understanding volume is very important in technical analysis.
By seeing volume we can easily understand the market trend in advance.
To see whether the volume is up or down you can see those details at the downside of the chart which is started as volume bars.
Volume gives signal before the rate, this is the reason that volume plays a very important role in technical analysis.
In uptrend is the volume starts drying then the understanding become that it is end of uptrend.
In downtrend is the volume starts drying then the understanding becomes that it is end of downtrend.
SUPPORT:
Support means, at what rate we can place an idea that the rate will not go down below this rate & there will be an upside from this rate, this particular part is known as support.
You can draw a support line by joining support point join.
In support line if we get maximum support points the line becomes stronger.
At support point huge quantity of shares buying happens & rate starts increasing.
But if rate falls below support line then the price starts decreasing & then a new support is formed.
That’s why its suggested that if support is breached then we have to short sell & if rate is above support line then we have to place stop loss.
RESISTANCE:
Resistance means its that rate where we feel that price will not move above this point & it will fall further this point is known as resistance.
We can join any 2 Resistance Points & draw Resistance line.
In resistance line more resistance points means the resistance line becomes stronger.
Huge selling comes is the rate of stock falls below the resistance point & price starts decreasing.
But is in situation the rate breaks resistance point & goes up, then the rate starts increasing & new resistance point happens.
Therefore, if resistance line if breached you have to buy & if you have to keep a stop loss below resistance line.
INDICATOR:
1.MOVING AVERAGES:
Moving average is the value derived from the particular closing rate for that particular time frame.
Example if we are discussing on the moving average of 10 days then price is the average of this 10 days.
Thus, we derive the average price & join points & prepare average lines.
Now let’s draw moving average lines practically.
a. SHORT TERM TREND:
To understand Short term trend we need to understand 10 to 20 days moving average.
Therefore, is you need to take position for 1-2 days then we need to check moving averages of 10-20 days.
If price is above moving average of 10 days then it’s a buy & if it is below then it we have to place stop loss.
Lets see example on chart.
b. MIDDLE TERM TREND:
To check middle term trend we study 50 days moving average.
So if you need to buy a particular shares for 5-6 months then we use 50 days moving average.
If price is above moving average of 50 days then it’s a buy & if it is below then it we have to place stop loss.
Similarly if the price is below 50 days moving average then we need to short sell & above the moving average should be our stop loss.
c. LONG TERM TREND:
To check long term trend we study 100 days moving average.
If we need to invest for one year or more than that then we need to study 100 days moving average.
If the rate is above 100 days moving average then we can buy & below 100 days moving average then we need to put stop loss order or we can create a short sell position.
MACD is an acronym for Moving Average Convergence Divergence.
MACD is created by Gerald Apple in the late 1970’s.
This tool is used to identify moving averages that are indicating a new trend, whether its bullish or bearish.
With an MACD chart, you will usually see three numbers that are used for its setting.
The first is the number of periods that is used to calculate the faster moving average.
The second is the number of periods that is used in the slower moving average.
And the third is the number of bars that is used to calculate the moving average of the difference between the faster & slower moving average.
Red line is slow moving average & Blue line is fast moving average.
Blue is a MACD line & Red is a SIGNAL line; vertical line is MACD HISTOGRAM.
Divergence occurs when the moving averages move away from each other. This is called divergence because the faster moving average is “diverging” or moving away from the slower moving average.
Convergence occurs when the moving averages move towards each other. This is called convergence because the faster moving average is “converging” or getting closer to the slower moving average.
CALCULATION:
MACD = (12day EMA – 26day EMA)
SIGNAL = 9 days EMA of MACD line
HISTOGRAM = MACD line – SIGNAL line
If blue line & red line cross each other above the zero line it’s generate selling call & if blue line or red line cross each other below the zero line that mean’s this indicator show buying call.
RSI:
Relative Strength Index, or RAI is a popular indicator developed by a technical analyst named Welles Wilder.
RSI is similar to the Stochastic in that it identifies overbought & oversold conditions in the market.
In RSI, line below 50 indicate down trend & line over 50 indicate up trend.
If RSI line moves downword after crossing or touching 70 then it indicates profit booking time.
TYPES OF CHARTS:
a. LINE CHART:
Line chart is a simple methodology of technical analysis.
Depending upon time & price line is drawn on the chart.
Line chart will only tell us at what the rate was & we could not see open, close high & low of a particular share.
b. BAR CHARTS:
Bar chart is very famous in Technical Analysis.
We get more detailed information in Bar Chart then line chart.
We understand time frame, open, close, high & low in bar charts.
Horizontal line on left indicates open & horizontal line on the right indicates close.
Upper point of the straight line indicates high & lower point of the straight line indicates low.
c. CANDLESTICK CHART:
Candlestick chart plays an very important role in technical analysis. Maximum countries in the world use candlestick chart for studying technical analysis.
The invention of this chart was done in JAPAN therefore it is also known as JAPANESE CANDLESTICK CHARTS.
This chart is denoted by various colors.
The day when the close rate of a particular script is low then the open rate then it is displayed by red color.
The day when the close rate of a particular script is high then the open rate then it is displayed by green color.
In candle stick chart above stick shows high & below stick shows us low.
Now we will take a small test on how candle stick is formed.
We will share a data with you & you have to draw a candle & show whether it is bullish or bearish.
Lets note the procedure to draw the candle first.
Step 1 -> Check open rate first & draw a horizontal line.
Step 2 -> Now see the close rate & if close is above then draw horizontal line above the open line & if close is less then open then draw horizontal line below open line.
Step 3 -> Get the candle body ready.
Step 4 -> Is candle bullish (Green) or bearish (Red) write it down.
Step 5 -> If it has shown high then draw stick of high & if it has shown low then draw stick of low.
This way we can understand how the candle is down which is useful to study chart.
