Beyond The Technical Analysis Expended

Trend Bars - A Simple Way to Look at Price Action

pareshratankundu@yahoo.in (NBIG) — Wed, 6 Mar 2019 11:49:00 +0530

Understanding price action is simple.
I am not talking about trading price action, but just reading it. I am referring to grasping what the market is doing right now.
Price action results from the struggle between buyers and sellers. It is the footprint of the fight between the bulls and the bears. When you look at a chart, it makes sense to focus on finding the bulls and the bears.

The only concept you need is the Trend Bar.

What is a Trend Bar?

A Trend Bar has a body that is greater than 50% of the entire bar range.

If a Trend Bar closes above its opening price, it is a Bullish Trend Bar.
If a Trend bar closes below its opening price, it is a Bearish Trend Bar.

Guidelines for Reading Price Action with Trend Bars

Consecutive Trend Bars in the same direction display strength. Recognize it.
Opposing Trend Bars imply a fight between the bulls and the bears. Find out who wins.
Isolated Trend Bars are potential traps. Traps, by definition, are tricky. Is it really a trap?

Price Action Chart Examples

Let’s take a look at two detailed examples of this useful concept in action.

Chart Markup Legend

Cyan Background – Trend Bar
Blue Circle – Consecutive Trend Bars in the same direction
Pink Dash Circle – Opposing Trend Bars
Green Arrow – Isolated Bearish Trend Bar (possible bull trap)
Red Arrow – Isolated Bullish Trend Bar (possible bear trap)

Example 1: SPY Daily Chart

Clear war zone with four consecutive alternating Trend Bars.
Bulls tried to push back without much impact.
Bears came back stronger.
Both fights resolved in a bullish way. Likely that bulls have regained control.
Bullish strength as expected.
A fight that looked bullish. But we knew that the bulls did not have a clear win as the last extreme high was not exceeded.
This thrust confirmed that the bears have taken over.

You can take a closer look at the red and green arrows. In the right context, they present solid bear and bull traps.

Example 2: ES Intraday 5-Minute Chart

The session started with the bulls in charge.
However, price soon stalled as both the bulls and the bears got involved.
Bears were in, but lacked strength when viewed in context.
Accordingly, this was an excellent bear trap. (Chance to buy.)
The bulls won this fight as price broke out above.
More bullishness after some struggle.
Sideways drift with two more instances of opposing Trend Bars. Bears win.

Open a Price Chart and Start Reading

This approach to reading price action is simple. This is why it works on all time-frames and instruments. (I selected the charts above at random.)
It takes some practice, but anyone can do it too. Open a historical chart, mark the Trend Bars, and practice how to interpret the constant price war.
After getting the hang of it, use the same method to understand the live market.
This is a price action method for understanding market movements. It’s not perfect, but it is a solid first step to understanding price action.

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Be Careful ! These 4 things that can make you fail in Stock Trading

pareshratankundu@yahoo.in (NBIG) — Mon, 12 Nov 2018 18:44:00 +0530

These few points will help you to not make mistakes I did and help you overcome some myths and notions associated with stock market trading . Just a request – Note that these learning have come from my trading in Options (which is derivatives) and not regular stocks, but that does not change the learning you are going to read below.

Mistake #1 – I focused too much on Knowledge

When I entered into stock markets, I was of the impression that I need to acquire a lot of knowledge on how things work, how various strategies work ? How technical analysis can help in trading ? I learnt all the technical indicators, back tested them on the past data, wrote lot of programming scripts to test my hypothesis.

I even went on to download lots of videos online and watched it over and over for many months and I realized that my knowledge had gone up significantly. I now understood lots of concepts, strategies, complex terms .

I could see a chart and instantly see lots of hidden patterns and could tell more than a normal person who does not know how to read a chart.

But then, over the months, I realized that “knowledge” is just a secondary element to trade successfully in stock markets. Almost all the good traders around the world agree that “knowledge” does not contribute more than 10-15% in being a successful trader. It’s an important thing , but certainty not the holy grail

I am not saying that one should not focus on “knowledge” part, all I am saying is that it’s not that KEY thing to succeed. Over knowledge will only create problems for you.

One of the famous stock trader Ashwani Gujral says in his book – “How to make money trading derivates” – that as per his experience over many decades, he feels that knowledge of charts etc contributes to just 10% of success for any trader. Here is the chart which explains what he mentioned in the book

So, learn things in stock market and then concentrate on the other important elements which you will learn in some time. Don't overthink about knowledge part.

Mistake #2 – I went against the Trend

What I have seen is that all the new traders somewhere want to challenge the markets and want to predict when markets will fall and when it will rise. They want to predict when the trend will reverse. They want to catch that top or bottom.

This is the essence of where most of the failed traders are stuck . If markets are rising , somewhere inside me, I wanted to catch the top and wanted to prove as if I “almost” know that now markets will fall OR if markets were going down.

However in this process, I realized that all the time I was just trying to swim against the trend, If markets were going up, I tried to predict when it will fall and how much and vice versa, and in that process I never stayed with the trend. There was some kind of fun in going against the trend. It was very tough to accept that markets can be simple (not easy)

Below you can see last 1 yr graph of NIFTY Index and see that there has been an uptrend in market and it has risen from 6000 in 2013 to around 8000 now . That’s 33% increase , but imagine someone who didn’t stay with the trend and always tried to predict when will market fall and looked at markets with suspecting manner and never got in the trend itself.

So just make sure that you never go against the flow in general. If I have to compare this trend following with some adventure sports, then I will compare it with Surfing, where you ride on the flow of the water. The flow of the water itself will take you with it, you just need to stay with it. Imagine what happens if you try to go against the water flow, the chances of you getting crushed is high.

So, try to identify the overall trend (upside , downside) and then make sure whatever is your trading style , be with the flow itself.

There is nothing wrong in having a contrarian view and predict when the markets will turn its direction, but be sure you know how you will take that decision. You can surely take a call against the trend , but make sure you accept that you were wrong in case you fail. Don’t try to prove yourself right if you are wrong, because it’s only going to harm you.

Mistake #3 – I didn’t realize that Money management is supreme

I personally think this is the most important part of being a successful trader . The biggest reason for my failure was that – I was very casual about money management and made the biggest mistakes in this area. Money Management in context of trading is all about managing your overall money and how much part of your overall trading capital you put at risk in each trade.

I will give you an example – Let’s say you have set aside Rs 10 lacs for stock market trading . Now let’s say you make 2 rules

Rule 1 : You will never use more than 20% of your capital in any given trade, no matter how promising it looks to you. Which means out of Rs 10 lacs you have , you will not put more than Rs 2 lacs on any single trade (so even in worst case, you will lose only 20% of your capital)

Rule 2 : The maximum loss you will allow on any give trade is 10% , which means that if you put Rs 2 lacs on a trade, you will not let the loss cross 10% , which is just Rs 20,000

If you see these 2 rules, you can see that the maximum loss in any single trade will not be more than Rs.20,000 which is 2% of your overall capital. So assuming you make 1 trade each month, you have 50 months of quota with you to go wrong fully

No one is so bad that they will make bad decisions every time, you make good and bad both decisions , but important point is that you should survive in markets till that time when you start taking right decisions .. Hence it’s important to be in the game and unless you take money management very seriously , you are bound to get out of the game some or the other day.

This is exactly what happened with me. By the time I started realizing that I am moving from “bad trader” to an “average trader” zone , my capital was over and I was already in loss and I never went back to the game itself.

Why one should use Money management ?

The biggest reason why money management should be used is that it does not expose you heavily to the risk on a broader level, even if there is very high risk on individual trades.

And the next big reason why money management is crucial is that it brings some kind of consistency in your growth overtime.

Below you can see 3 versions of money management, which is BAD , Average and GOOD money management, where the overall risk taken on a single trade is moving from high to low.

I did some simulation on excel where we are measuring how capital will grow over 36 months (assuming 1 trade is done in a month) . I ran 25 tests and plotted them on a graph together. You can see how in case of bad money management the growth of capital is very random, unpredictable and varies from very high (lucky) to very low (unlucky)

But in case of good money management , the growth of capital a trader has moves up over time and with high consistency .

So to sum up , I would say money management system is like having a great stamina . If you are there for longer time in markets, in a way you win the battle to some extent.

Mistake 4# – I thought trading is all about WINNING

Psychology plays a big role in being a good trader. From the childhood we are programmed to WIN and that same mindset takes over rational thinking in stock markets trading too. We want to WIN on all the trades , It’s hard to accept that you were wrong , being wrong means taking a LOSS . LOSS equals FAILURE and we are never taught properly how to take failures. And that’s exactly what happens in trading, novice traders don’t cut their losses fast, they let them grow (ego) and keep hoping that they will WIN

This is what also happened with me. When I bought an option for a stock, every time I wanted to WIN, every time I wanted to make profit on that option. I thought I will become a great trader , if I WON more and more ..

I was so WRONG

Winning MORE times is not same as making MORE money in stock markets trading. I know some of you who are reading this are confused with this statement , but let me explain this important point

So when it comes to stock market trading, you can’t choose how many times you WIN or LOOSE, but can control HOW MUCH you will win or lose !

All you can do is 3 things

1. You can control how fast you can get out of loosing trade (getting out of a bad decision)

2. You can control how long you will stay with a winning trade

3. And You can control when you will take the decision using your knowledge.

WINNING MORE , but still LOOSING

Every trade you make in stock market, you should make sure that your profits potential is generally much higher than the risk potential. Here is how it should look like

It’s very much possible that a trader wins 6 out of 10 times and still looses the money and in the same manner, it can happen that a trader wins just 4/10 times and still makes a lot of money.

Let me explain this with an example. Let’s say a person has Rs 10 lacs to start his trading .

A good trader wins just 4 times, but he makes sure that he will make big win and every time he makes a bad decision, he cuts the loss fast.

And in same way, a bad trader might win 6 times , but every time they are in hurry to book their profits (so they earn small every time) and when they are in loss, they do not book their losses fast (no money management rules in place) and hence let their losses grow because they can’t accept they made mistake (Ego) . The chart below will explain you this .

This is the only big difference between a good trader and bad trader .

Conclusion

Today I have shared my mistakes I did when I traded OPTIONS and I hope you will learn from my mistakes . But this can just be starting point only, you will only learn when you get on the ground and do the real trading. Till then it’s just a practice no matter what you do.

It’s extremely addictive to trade and if you are like me, you will feel a great thrill trading either stocks, futures or options (or any other instruments) , while I didn’t succeed in trading, I at-least know why I failed, I at least came to know my weakness and now I can improve upon it. I can at least help others to not make the same mistakes I did.

Also in future, if I get into trading again, I am sure I will be 10X better compared to earlier version of mine. I know it will still be very though, but I can try at least and when I stopped my trading, somewhere I felt bad about leaving it. I felt as if I am turning my back and got a feel of leaving the battle ground, but it was a right decision because I could have damaged my own net-worth to a big extent had I not stopped.

I would love to hear what you feel about the points I shared and if you would like to share your own experiences

Source: Collected from Internet.

Disclaimer:
Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational & informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.

Relationship of Risk & Return

pareshratankundu@yahoo.in (NBIG) — Sat, 27 Oct 2018 17:00:00 +0530

"Stocks are risky. Bank deposits are safe. Don't buy stocks! Keep your money safe." Haven't you heard such statements before? We are sure you have.

But before you decide to accept these statements on their face value, we suggest you understand the real relationship between risk and returns. To start with have a look at the average historical returns given by these 2 assets, i.e. stocks and bank deposits:

One glance at the table above and it becomes clear - which is the better asset to invest in,given the historical average returns. Another thing to note here is that returns given by bank deposits will be further reduced when we consider taxes.This makes stocks all the more better option for long-term investing.
But unfortunately, stocks don’t go up in straight lines. Stocks are volatile and can move up or down sharply. This is unlike bank deposits, which are almost guaranteed to give fixed returns promised at the time of booking the deposits. But before you draw a negative conclusion about stocks, it is important to understand that its the very nature of stocks (as an asset class), which makes it a volatile asset class for the short term. But when you increase the period under review, its found that stocks (and equity mutual funds) give much higher average returns than what is given by bank deposits, or for that matter, any other asset class.
Just have a look at the table below (which builds on the previous table):

Stocks are clear winner.
But nothing comes for free in this world. Same is the case with high returns of stocks. These come at a cost -higher volatility in the short-term.
Or looked at from another perspective, an investor in stocks needs to be compensated for taking higher risks. This is achieved by means of higher returns that stocks provide.
Understanding this relationship between risk and return is very important and can help an investor make correct financial decisions, based on their risk appetite and return requirements.
What is Risk?
A very formal definition of risk is the likelihood that actual returns will be less than historical and expected returns.
But to put it very simply, risk is the possibility of losing your money that is invested as principal. For example – You invest Rs 20,000 in stocks today. Next day, the markets go down and reduce the value of your investments to Rs 18,000. That is the primary risk when you invest in stocks.
But stocks are not the only assets that have risk. All investments have their own share of risks. The risks however vary in type and degree.
So even when you keep you money in bank deposits offering 5.5% returns (after-tax), there is another kind of risk that you are taking – inflation risk. Your investment might not keep pace with inflation, which will reduce your purchasing power in future.
Risk can come from many other factors too. Like volatility in stock markets, inflation, changes in currency exchange rates, changes in business dynamics, changes in economy, geo-political developments, etc.
But generally, the investments that are considered to carry higher risks have the potential to deliver higher returns. On the other hand, investments with lower expected returns (like bank deposits),carry lower risks.
What is Return?
This is quite simple. Returns are simply the amount you get (or lose) on the invested amount. It is generally calculated on an annual basis.
As mentioned earlier too, the asset, which gives higher returns, is generally expected to have higher levels of risk.
Risk – Return Relationship
There is a clear (if not linear) relationship between risk and returns.
Try finding an asset, where there is no risk. Chances are that you will end up with an asset giving very low returns. Again try finding an asset that offers very high returns. We are sure you would have chosen a very risky asset.

Now risk cannot be eliminated completely. At best, investors can manage the risk in their investments.
So when investing in shares, you can either have a concentrated portfolio of few stocks or a diversified portfolio of many stocks. The risk with holding a concentrated portfolio is that if value of even one company goes down, it will have a big impact on the overall portfolio returns.
Instead to reduce the risk, one can chose to invest in a diversified portfolio of stocks. This way, a fall in share price of even few stocks will not have a large negative impact on the overall portfolio returns. This is the exact principle on which fund managers build mutual fund portfolios.
Another way to reduce risk is to diversify across assets and hold a portfolio of stocks, bonds, bank deposits, gold and other assets. What happens then is that bank deposits, bonds, gold, etc. will provide stability to the portfolio, albeit at the cost of lower returns. Stocks on other hand will provide higher long-term returns and improve overall portfolio returns.
Time also plays a big role in deciding the returns obtained by investors. It has been empirically found that when investing in good stocks, the longer your investment horizon is, lower are the associated risks and returns are comparatively better than other asset classes. Having a long investment period averages out the short-term volatility of returns.
Humans have a tendency to reduce risk that they take. You too can choose to invest only in safe assets like bank deposits or hold cash. But then, your investments will lose value over time (due to inflation). And you don’t want that.
Its better to assess your risk tolerance and choose investments intelligently. Taking on some risk is necessary to achieve adequate returns. So try and find the ideal balance for your investments, which gives you the best risk-adjusted returns for your investments.

↪ Disclaimer:
Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational & informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.

Different Types Of Stocks

pareshratankundu@yahoo.in (NBIG) — Sat, 27 Oct 2018 16:31:00 +0530

People invest in stocks to earn higher returns than what fixed income products offer. But all stocks are not same. Like the companies and businesses, the stocks of different companies also have different characteristics.
In general, companies issue stocks of two types – Preferred (have priority over other shareholders) & Common stocks. In line with its name, the common stocks are the first choice of retail investors. We will be focusing on common stocks in this article.
Let’s evaluate different stock classifications that are commonly used:

On basis of Market Capitalization
Stocks are often classified as large caps, mid caps, small caps and micro caps on basis of their total market capitalization (Current Share Price x Total Number of Shares). Though there are no exact cutoffs about what exactly is defined as a large cap and what isn’t, investors usually categorize companies under as follows:

Large-cap: Market Cap > Rs 10,000 Crore (Cr)
Mid-cap: Rs 2,000 Cr < Market Cap < Rs 10,000 Cr
Small-cap: Rs 200 Cr < Market Cap < Rs 2,000 Cr
Micro-cap: Below Rs 200 Cr

Also the concept of Risk and Return is applicable here too. Small companies are riskier than large ones. So due to the increased risk, many of the smaller companies tend to give higher returns than large or mid-cap companies. Of course, the proportion of small companies not doing well is also higher than those among their larger counterparts.
Many of the large cap stocks are of high quality, well-established companies with stable or growing earnings. The stocks of these companies are known as blue-chip stocks. The perceived risk associated with these companies is also very low. Examples - Many stocks that are part of Sensex or Nifty 50 index.

On basis of Growth / Value / Income
This classification of stocks depends on the nature of business, its profit distribution policy and general assessment of price vs. actual intrinsic value.

Growth Stocks
These are stocks of businesses, which are growing higher than average rate. This high growth is translated into higher profits, and is reflected in rise of company’s stock price. Because of this, these companies prefer to reinvest their earnings back into company operations in hope of generating more profits. This theoretically helps these companies grow at a faster rate. Consequently, these companies have low dividend payouts. Generally, the growth stocks are bought more for capital appreciation in stock prices and are riskier than other two varieties.

Value Stocks
These are stocks that according to some financial analysis ratios, are trading at prices that are less than their actual (intrinsic) values. Some of the popularly used ratios to assess reasonability of price against embedded value are:

Low P/E ratio
Low P/BV ratio
Low Price-to-Sales ratio, etc.

Value stocks don’t remain good value picks forever. When other investors realize that stocks are under-priced, the prices tend to rise up and reward those early investors who bought at lower levels.

Income Stocks
These stocks distribute a comparatively higher percentage of their earnings as dividends to shareholders. This often gives them high dividend yields (dividend in relation to their share price). At times, these are also referred to as high dividend-yield stocks. A higher dividend means higher income and hence, the name income stocks. Generally, these belong to companies that have stable businesses churning out reasonable assured amounts of profits.
These are some of the more commonly used approaches to classify stocks. But stocks can also be classified in many other ways like defensive stocks, high beta stocks, etc.

↪Disclaimer:
Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational & informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.

Option Put-Call Ratio

pareshratankundu@yahoo.in (NBIG) — Wed, 26 Sep 2018 11:45:00 +0530

Guide to Put-Call Ratio

What is Put/Call Ratio?

Put/Call ratio (PCR) is a popular derivative indicator, specifically designed to help traders gauge the overall sentiment(mood) of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period. If the ratio is more than 1, it means that more puts have been traded during the day and if it is less than 1 it means more calls have been traded. The PCR can be calculated for the option segment as a whole which includes individual stocks as well as indices.

How to Interpret Put/Call ratio

The Put/Call ratio is mainly used as a contrarian indicator. Markets in the short-term are driven more by the emotions than fundamentals. Times of greed and fear in the market are reflected by significantly high or low PCR. Contrarians say, PCR is usually headed in the wrong direction. In an oversold market, puts will be high; as everyone expects the market to fall more. But for contrarian trader, it suggests that the market may soon bottom out. Conversely, in an overbought market, the number of calls traded will be high expecting the market to trend higher but for contrarians, it would suggest that market top is in the making.

There is no fixed range that indicates that the market has created a bottom or a top, but generally traders will anticipate this by looking for spikes in the ratio or for when the ratio reaches levels that are outside of the normal trading range.

If options were held only to make directional bets, this analysis would have held true, however traders trade options for reasons other than making directional bet. Traders could buy options to hedge their existing position as well as to create income generation strategies. So with a combination of speculation and hedging activities, relying solely in terms of higher or lower number of Put Call ratio may not be fruitful.

Let’s see how vague PCR can be, if used in isolation.

Bank Nifty futures vis-à-vis Bank Nifty PCR

In the above example of Bank Nifty, we had witnessed a steady increase in PCR from May 2016 to 15th July 2016. Con-currently we saw a rise in price of Bank Nifty as well. In Dec 2016 Bank Nifty resumed its fresh uptrend but PCR fell sharply. This contradicts with the relations experienced earlier. From May 2017 till July 2017, PCR has once again moved in tandem with Bank Nifty. PCR as an indicator on its own has flaws. PCR levels in a highly volatile market can be misleading as typically, during such times; traders tend to sell puts instead of buying calls. So, analyzing put call ratio based only on high or low PCR numbers could prove costly. Thus it is important to use Put Call ratio in sync with other trading activities.

PCR Analysis

Let’s see how PCR analysis can be interpreted taking option sellers into consideration who are the major players in the market as compared to the retail public who are usually on the buying side of the trade.

Traders can combine options data including the Put Call ratio with implied volatility to gauge if long or short positions have been created in the market.

1) Build-up in options along with increase in IV’s (Implied Volatility) suggests long formation

2) Build-up in options along with fall in IV’s (Implied Volatility) suggests short formation
Types of View based on Open Interest, Implied Volatility and Put Call Ratio:

Let’s see how the combination of the Scenario 4 & 8 from the above table provided a Buying signal before the big up spurt in Nifty.

Chart A –Nifty Futures July Series

(Upper Sub Graph –Nifty Futures Price, Green Line –Nifty Futures Open Interest)

Chart B- Nifty 10,000 July CE

(Upper Sub Graph-Nifty 10,000CE, Blue Line –PCR, Red Line-Implied Volatility 10,000CE, Green Line –Open Interest 10,000CE)

Chart A: Nifty futures witnessed a swift increase in prices from 9650 levels to 9950 levels where the markets started to consolidate, coinciding with a gradual increase in Nifty futures O.I. Traders at this levels started to create fresh short position in the futures market, expecting the market to correct as the open interest surged higher along with a small drop in prices.

Simultaneously in Chart B from 10th July to 20th July we witnessed call writing in OTM call option strikes including 10,000CE(as shown in the above graph) as the traders expected market to correct or remain range bound and not cross 10,000 levels in the current series. This is indicated by a decrease in PCR and increase in Open interest of Nifty OTM call options including 10,000CE strike during the same timeframe.

As price of Nifty futures started to increase from 23rd July, traders who were short in the futures market along with the call option writers had to run for a cover and close their short positions. This panic was observed by a sharp decline in the open interest positions of Nifty future contracts. In addition, implied volatility also tumbled along with an increase in Put Call ratio due to unwinding of open positions in short call option strikes.

Any smart trader, by analyzing the above mentioned positions in Nifty futures and call options could have taken a bullish stance by anticipating a huge short covering in the markets.

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↪Disclaimer:
Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational & informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.

How to read Balance Sheet for Fundamental Analysis

pareshratankundu@yahoo.in (NBIG) — Thu, 5 Apr 2018 18:07:00 +0530

By looking at the balance sheet of the company one can understand how the company has build wealth for itself and its owners over the past years.

Balance sheet of a company makes one thing clear about the business, it talks about from where the company is generating funds to run its business, and where the company is using those funds.

Any company generate funds in three possible ways. It can borrow money from stock market. This is called share capital in balance sheet.

The company can also retain its net profits to run the business. This is called reserves and surplus in the balance sheet.

Company can also borrow funds from Bank etc. This is recorded as long term borrowing and short term borrowing in balance sheet.

Hence, the total funds available with a company to run its business can be summed up like this:

Total Funds = Share Capital + Reserves + Debt.

{Note: Share Capital + Reserves = Book Value.}

This (total funds) is also called the total liability of the company.

How the company uses their generated funds is also indicated in the balance sheet.

Company use its generated funds to build assets. These assets intern generate income for the company.

Let’s see the important constituents of a balance sheet in more detail.

Balance sheet basically defines this equation:

If one read a balance sheet statement of a company, it will show how much accumulated wealth the company has amassed till that day.

Shareholders fund (Book Value / Net Worth)

Why it is called as shareholders fund?

Shareholders fund is that money that companies owe to their shareholders.

Shareholders have a legal claim on the company’s net profits. Hence any funds that is retained by the company (Reserves) goes into the account of shareholders funds.

Company consider these funds as that money which they need to pay-back to the shareholders one day.

Book Value = Share Capital + Reserves

Share capital: is that money that the company has generated from its IPO.

Share capital is actually the borrowed money that the company has taken from the shareholders.

It is also treated as companies liability.

Reserves :are also referred as retained net profits of the company.

Why companies retain their profits? This is done to strengthen their balance sheet (financial position).

Companies used a reserves to buy new fixed assets. This day 2 by means of capital expenditure plans (CAPEX).

Companies also use their reserves to reduce there debt burden.

A portion of reserves is also used to pay dividends to its existing shareholders.

General there are two types of reserves. First, revenue reserve and second, is called capital Reserves.

Revenue reserves is again categorized into two types, first he is general reserves and second is specific reserves.

As the name suggests, general reserves is not apportioned for any specific purpose. They are just kept in the balance sheet to strengthen the financial position of the company.

Specific reserves are those portion of money which is kept for specific purpose. The the funds kept in the specific reserve shall be used only for the designated purpose.

How the reserves in the balance sheet is funded every year?

The annual profits of the company that is shown as net profit, in profit and loss account, is transferred to the company’s balance sheet as retained earnings.

This retained earning in turn is used as the reserves of the company.

If the company has made a loss in a particular financial year, no transaction is recorded in the reserves column of the balance sheet.

Sometimes, in case of loss, the company may even debit there reserves account in balance sheet to meet their requirements.

In such case one will find a dip in the reserves and surplus account as compared to the previous year.

One of the most important financial indicator detailed in the Balance Sheet is shareholders equity. In doing a balance sheet analysis it plays an important role.

Net worth of a company is equal to total capital generated by the company by issuing stocks and accumulated retained earnings.

A continuously improving net worth is what investors likes to see in companies balance sheet.

Investors must compare last five years net worth of the company, and must also check growth rate.

It is important to check how the net worth of company has grown.

If increase in net worth is attributable only to the issuance of more stocks to public, then it is not good.

Ideally, the companies net worth must increase due to growth in retained earnings.

Liability

Non current liabilities

Non current liabilities are those liabilities of a company which is settled only after 12 months from the date of reporting.

These are such liabilities that company need not settle immediately.

If you will see in moneycontrol.com, you will find that non current liabilities are mainly recorded in two three some heads. First he’s long term borrowing. Second, is deferred tax liability and third is long term provisions.

Companies which show the line item has long term borrowing, means that the company has taken that from the market (mainly banks).

It is very important for the shareholders to keep a note of how high is the long term borrowings of the company as compared to its equity.

Deferred tax liability is a provisional fund maintained by the company using which they will pay the forthcoming additional tax dues.

Has a part of non current liability the company also hello kids some funds in the name of long term provisions. Here the company keeps some cash reserves for paying their employees. These payments can be like gratuity, provident funds, leave encashment. The provisions can also be made for income tax payment, payment of dividend to shareholders, dividend distribution tax etc.

Current liabilities

Current liabilities are those obligation of the company that they must meet before 12 months.

If you will look into balance sheet of any company in moneycontrol.com you will find four line items under the heading current liabilities. They are, short term borrowing, trade payables, other current liability and short term provisions.

Short term borrowing is essentially that loan that company has taken from Bank CTC to fund there day-to-day cash flow requirement. In financial term this is also called as working capital of the company.

Trade payable is that money that a company must pay to its suppliers within next 12 months.

Short term provisions are again similar to long term provisions. The only difference here he is, this provisions me get used within next 12 months.

Assets

Generally in the balance sheet, assets are categorised into two main types: non-current assets and current assets.

Non-current assets are basically property, plant, and equipment’s of the company. Normal terms we call it as fixed assets of the company (Tangible assets).

Fixed Assets (Tangible Assets)

Fixed assets adults assets of the company which they use directly for the production of goods and services for their customers.

Common examples of fixed assets are land, factory buildings, machines, furniture’s, Motor vehicles etc.

Fixed assets are those assets of the company which company gathers to hold them for long-term.

Contrast to the fixed assets, an inventory is also an asset of the company. But company maintains the inventory with the objective of selling them in near future.

Intangible assets

Assets of the company do not have a physical substance. You cannot physically see it and touch it. Example off in tangible assets can be like copyrights, trademarks, patents etc gathered by the company over a period of time.

Capital work in progress

These are those assets which were not ready at the time of preparation of the balance sheet. These are those assets which are still not ready to produce goods and services for the company.

Hence, call costs that has gone into the preparation of that as it is shown as capital work in progress off the companies balance sheet.

Just to understand, let’s take a small example. Pause cement manufacturing plant is putting up a new facility to manufacture a new brand of cement. Average it may take 3 years for the company to start production from this new facility. But the company will start spending money on this asset from the first months itself. So, the cost that was into the preparation of the new cement plant will be booked as capital work in progress for the next three years.

As soon as the new plant will begin production, all capital work in progress associated with this new plant will be transferred as tangible asset.

Non-current investments

Current investments are those investments made by the company which day would like to hold for more then next 12 months. Example of such an investment can be stockholding of another company.

Generally current investments are reported in the balance sheet equivalent to the market valuation of the investment.

Current assets

Current assets are those assets of the company which is expected to be converted into cash within next one year.

It is the current assets of the company that helps them to maintain enough liquidity.

Current assets of the company helps in management of the current liabilities.

One of the most reliable firms of current assets cash and cash equivalent, inventory, it’s investments, account receivables from its customers, and loans and advances given to associates/ suppliers. Advances are also referred to as pre-paid expenses in some balance sheets.

To Conclude

You can see the above snapshot of a typical balance sheet of a company and understand what is actually balanced in a balance sheet.

Total asset of a business is always equal to the sum of its total liability and shareholders funds.

How balance sheet is related with its profit and loss accounts?

Reserves & Surplus in balance sheet gets updates every time the company makes net profit (PAT). Net profit appears in companies profit and loss accounts.

Debt (long term and short term borrowings) in balance sheet increases the companies Finance cost which appears in companies profit and loss accounts.

Trade payables of the balance sheet is a portion of expense to be incurred by the company in the next financial year (FY). Companies often buy goods and services from the suppliers on credit. All expenses which are booked by the company appears in the profit and loss accounts.

Tangible assets valuation appearing in balance sheet are recorded as net of accumulated depreciation (over last several years of operation). Depreciation applicable only for a particular FY, appears in the companies profit and loss accounts.

Non-current and current investments made by the company is recorded in companies balance sheet. The income generated by these investments are recorded as other income in profit and loss accounts.

Trade receivables appearing in balance sheet of the company is the out of sales revenue. Companies often sell their products and services to their customers on credit. This credit payment due, to be paid by next months are recorded as trade receivable.

So now you can understand well, how balance sheet and profit and loss accounts communicate with each other.

Disclaimer: All blog posts of https://nse-bse-mcx-technicalanalysis.blogspot.com/ are for information only. No blog posts should be considered as an investment advice or as a recommendation. The user must self-analyze all securities before investing in one.

Volume Analysis Patterns

pareshratankundu@yahoo.in (NBIG) — Sun, 4 Jun 2017 22:16:00 +0530

Volume Analysis Patterns

Volume is one of the tools professional traders use to find clues about possible market movement as well as confirmations to trends.Volume data is most accurate in stock, future, and commodity exchanges. This is due to the fact that all of these are regulated exchanges. While most of the trading that happens on these exchanges is electronic nowadays, every order still has to be cleared with the exchange in the end, so no matter how large or small the quantity traded is, it is registered in the database.

In Forex trading things are different. Volume data is measured by how many ticks are registered in time frame chosen in the chart. For those who don’t know what a tick is, it is a transaction (filled order) made in the underlying instrument regardless of the quantity traded. A tick charts draws bars based on the predefined number of trades conducted (if you have a 50-tick chart then each bar is closed at the end of the 50th trade, regardless of how much time it takes to conduct these trades. This means a transaction of 1 mini lot is a tick and a transaction of 10 standard lots (buying or selling 10 lots together as 1 single order) is also a tick.

With the absence of a single exchange that processes all orders in Forex, each broker calculates volume based on their own ticks taken from there trades database.

The bottom line is, the following patterns are best applied to stock and future contracts and not of much value in the Foreign Exchange trading.

To produce meaningful signals, volume is coupled with price data in these patterns.

Accumulation

Accumulation, which indicates that buyers are loading up on a certain stock or a futures contract, is signaled by a slowing in the downtrend (or price going nowhere) while the volume stays high.

Distribution

The opposite of accumulation is indicated by a slowing in the uptrend (or price going nowhere), while volume stays high. Which means that sellers are starting to takeover in the underlying market.

Confirmation of Trend

For a trend to be healthy whether it is an uptrend or a downtrend, volume has to be increasing in each up or down swing. The volume data acts as a confirmation of the trend in this case. A decreasing volume means that the trend is nearing its end or at least about to stall.

Volume Spikes

Sometimes volume spikes, accompanied with other reversal signals with gaps or candlestick patterns, signal the end of a decent run in price. This can be very aggressive and needs extra precaution.

Breakout Signals

To gauge the interest and therefore determine the probable direction of the breakout of a trading range, determine the trading range that you want to monitor, then watch the overall volume in the duration of the trading range.

Generally speaking, higher volume leading to the breakout (whether up or down), gives more value to the breakout. There is also the follow-through volume, which is high volume after the breakout has occurred. This also adds to the strength of the breakout.

Notes of Precaution

Volume is relative so when dealing with volume bars I found the best way to put things in context is drawing trend lines across volume bars. This helps understanding the story that volume tells.
Volume signals aren’t enough by themselves, instead they act to confirm your other signals or refute them. Don’t rely on volume alone to produce signals.

Butterfly and Bat Chart Patterns

pareshratankundu@yahoo.in (NBIG) — Sun, 4 Jun 2017 22:15:00 +0530

Butterfly and Bat Chart Patterns

Chart patterns are among the most important tools we can use to predict the market direction, take a position and make some money. So far, I have talked about triangles, wedges, flags, pennants, rectangles, head and shoulders, and cup and handle patterns. In this article, I am talking about some other kinds of patterns that are very important in predicting the market direction, specially when there is a possibility that the market changes its direction.

Butterfly which is also known as W, is an important reversal pattern that usually forms at the top of an uptrend. Of course, you have to notice that this pattern doesn’t always cause the market to reverse, and sometimes the trend will be continued after that. I will tell you what to do to stay away from taking wrong positions.

Bat pattern is so similar to butterfly pattern. It is a reversal pattern too. In fact butterfly and bat patterns are almost the same, but just their shape is a little different. Sometimes it becomes hard to say if the pattern is a bat or butterfly pattern, but this doesn’t matter at all. The only thing we have to learn very well is that we understand that the market is going to an indecision status for a while and it is possible that it reverses, so that we take a position and make some money.

Experience shows that bat pattern usually forms at the bottom of downtrends, but butterfly patterns form at the top of uptrend. Bat patterns look like capital M, whereas butterfly patterns look like capital W.

Please let me show you some examples and then I will tell you how you can trade using these patterns.

This is a beautiful butterfly pattern formed at the top of a strong uptrend on GBP/USD daily chart:

And this is another butterfly pattern on the same chart:

And this is another butterfly pattern formed on EUR/USD four hours chart:

This is a bat pattern formed at the bottom of a downtrend on EUR/USD four hours chart. As you see it really looks like a bat and also capital M. Also you can see that the downtrend reverses and goes up very strongly after this bat pattern:

How to Trade Using the Butterfly or Bat Patterns?

Like all the other patterns, this pattern also has a support and resistance line. My strategy for trading this pattern is the same as my trading strategy with the other patterns. I consider the rules, but I always wait for breakouts. This is what I have always emphasized on.

For example, although it is said that butterfly and bat patterns are reversal patterns, I do not go against the trend when I see that these patterns are formed at the top of an uptrend. I wait for the market to break below the support line and then I go short.

Here below I am showing you an example. As you see a strong butterfly pattern is formed on EUR/USD four hours chart, and finally it worked strongly as a reversal pattern and the price went down. However, in order to go short, we had to wait for the market to go down and break below the butterfly support. The breakout occurs when a candlestick closes below the support line or above the resistance. The stop loss has to be placed above the candle which has broken below the support:

World Stock Exchanges Comparing

pareshratankundu@yahoo.in (NBIG) — Sun, 4 Jun 2017 21:31:00 +0530

Largest World Stock Exchanges Comparing

The Oldest Exchange: Of the top 20 stock exchanges on the above list, the oldest can be found in Frankfurt. Originally the location of medieval trade fairs in the 11th century, Frankfurt quickly became an important center for commercial and monetary transactions. The “birth” of the stock exchange is said to have happened in 1585 when fair merchants decided to establish fixed currency exchange rates.

The Most Listed Companies: Established in 1875, the Bombay Stock Exchange was actually Asia’s first stock exchange. It has 5,749 listed public companies, which is the most of any of the top 20 exchanges. The majority of companies listed on the BSE are small caps, with an average market capitalization of just US$292 million per company.

The Largest Market Cap: As mentioned before, the NYSE takes the cake here with close to $20 trillion in market capitalization. There is a steep drop-off after the NYSE, which is followed by NASDAQ ($7 trillion), London Stock Exchange ($6 trillion), Tokyo Stock Exchange ($4 trillion), Shanghai Stock Exchange ($4 trillion), and Hong Kong Stock Exchange ($3 trillion).

In fact, only 16 exchanges have market capitalizations over $1 trillion. Here are those visualized by market cap on a map from our previous infographic that showed all of the stock exchanges in the world.

Intraday Trading Knowledge 9, Importent Summary

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 21:43:00 +0530

Glossary, Stock Market Basic, Share Market Basic

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 21:33:00 +0530

Whether you are a beginner at investing or seasoned investor being familiar the basic term of the stock market is essential. Expanding your stock market vocabulary will enable you to be a better investor, so that you can trade successfully. Given below is a basic glossary of terms that

you must know as an investor:-

Agent: In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.
Ask/Offer:Lowest price at which an owner agrees to sell the shares.
Assets:Assets refers to the property owned by the company such as cash, equipment, land, technology etc.
Bear Market: It is a market situation where the stock prices fall consistently.
At the money:A situation at where the options strike price is same as the price of the underlying securities.
Beta: It is a measurement of relationship between stock price of any particular stock and the movement of whole market.
Bid: The highest price that a buyer is willing to pay for a particular stock.
Blue Chip Stock: Stock of well-established and financially sound companies that have a market capitalization in thousands of crores.
Board Lot:A standard trading unit which is defined by a particular exchange board. The Board lot size depends on the per share price. Some common board lot sizes are 50, 100, 500, 1000 units.
Bonds: It is promissory note issued by the government or a company to its buyers. It illustrates the specified amount held for a specified time period by the buyer.
Book: It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.
Bull Market: A market situation where the price of the stocks increases rapidly.
Call Option: It is an option given to investor the right to buy a particular stock at a specified price and time which is not an obligation.
Close Price:The final price at which the stock is sold or traded on a particular trading day.
Convertible Securities: A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities.
Debentures: A form of debt instrument which is not secured by physical assets or collateral.
Defensive Stock:A type of stock that provides a constant rate of dividends even in the periods of economic downturn.
Delta: The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.
Face value: It is the cash value or the amount of money the holder of a security is going to earn from the issuer of the security at the time of maturity.

One-side

Share Market Basic, Dividends

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 21:05:00 +0530

Important Facts to Know about Dividends

As discussed, shares comprise a certain portion of an organization. Several profit-making companies listed on the share market share their profits among shareholders, which is the primary objective of paying dividends. Companies distribute a small component of their profits as dividends to the investors. This becomes an important source of earnings for investors who stay involved in the share market for a longer period of time.

Because dividends are a minor portion of company profits that are returned to the investors, they provide additional incentive for individuals to hold on to their stocks even if the company is not growing at high rates. This is an important share market basic, which all investors must remember.

Companies utilize dividends to share the annual profits directly with the shareholders. Generally, it is paid as cash; the organization pays a small percentage of the earned profits to every shareholder. Sometimes, this profit share could be in the form of offering additional stocks to the investors.

Important Facts to Know about Dividends

Periodic Payments: Most companies pay an annual dividend based on the total profits made during the year. In certain instances, organizations may pay quarterly dividends or special one-time dividends if exceptional profits have been earned through unique events.
Taxable: Investors need to bear in mind that income earned from dividends is taxable as per the Income Tax Act, 1961. An accountant should ideally be consultant for clarifications and more details on this.

Types of Dividends

Companies can either pay fixed rate, referred to as preferred dividends, or they can pay variable dividends based on the earnings, known as common dividends.

Investors should remember one thing about share market investment — companies are not obliged to make these payments by any regulatory guidelines. However, preferred shareholders are more likely to receive these pay-outs, unless the companies are going through exceptional financial difficulties.

Dates to Remember

    Declaration Date: This is the date when the company determines the payment date for the dividend, the ex-dividend rate, and the dividend amount.
    Record Date: The companies compile the list of all the shareholders as on the record date. All these investors are eligible to receive the declared dividends.
    Ex-Dividend Date: This is often a few days before the record date. The primary objective of this date is to ensure pending transactions, if any, are completed prior to the record date. Any investor who does not own company shares before the ex-dividend date will be ineligible to receive the dividends for the said period.

Benefits of Dividends

For Companies: Organizations on the share market pay dividends to retain investors by keeping them happy. It is often perceived that dividend-paying organizations have progressed from the growth stage, which means they cannot keep pace with the rate of growth expected by the markets. Organizations that do not reinvest their profits to grow their companies pay dividends to shareholders. Regular dividends make the stock appealing to investors, which, in turn, helps in increasing the price of the share.
For Investors: Dividends provide investors a stable return on their investments, which is low risk. Individuals who are risk-averse can be assured of investing their money in stable companies with low growth but with almost no risk of a fall in share prices, which can then risk their capital investments. In addition, as the organizations continue to grow, the dividends increase, which raises the value of the stock for the investors.

Investors need to bear in mind that bigger dividends do not always mean better. It is generally seen that companies paying high dividends are unable to sustain these rates in the longer period. Thorough research and exercising caution while choosing dividend-paying companies will help sustain periodic returns on investments in the share market.

Intraday Trading Knowledge 8, Do & Don't for Intraday Traders

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 20:38:00 +0530

Dos & Don'ts for Intraday Traders

Day traders Buy or Sell Stocks several times every day and close out all positions before the market closes.
The expectation of Traders is making small profits with as little risk as possible and they simply look for potential price movement Based on Technical Analysis.

Plan your trade. Trade as per your plan.

Select your Stock, Decide the Quantity, Decide the entry and exit price and Decide the amount of money you can loose if the trade goes against you.
Trading in Opening and Closing hours of the market is Risky but Rewarding.

Use a Stop Loss

Always trade with Stop Loss. Set Stop Loss Sell Order just below the low of the day or Support level and Stop Loss Buy Order just above the high of the day or Resistance level.

Never Trade too many stocks at once

Always trade in High Volume Index based Shares.
Select Three or five stocks for Trading.

Get the price movement between the bottom and top

It is not possible to Buy at the Bottom and Sell at the Top.
Try to trade between the Bottom and Top.

Buy a stock

Always buy a stock that is going Up. Buying level is just above the previous closing price.

Short the stock

Always sell the stock that is going down. Selling level is just below the previous closing price.

Don't average Your Position

One common mistake by Traders is averaging Loss making position. You must exit if the trade goes against you.

Take control of your greed

Book Profit and leave the trading hall and enjoy the day.

Take control of your fear

Cut your loss - Relax – Forget your loss quickly. Wait for next Opportunity. You can Win.

Keep records of your trading results.

Always record details of your trades and mistakes. Accept failure as a step towards victory.

Intraday Trading Knowledge 8, Stock Selection Idea For Intraday Trading

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 20:16:00 +0530

Tips on How to Pick Stocks for Intraday Trading

One of the big questions that come to every intraday trader’s mind every single day is to find the right stock for intraday trading. After all, the key to successful trading is the right selection of stocks. There are a number of factors that should be taken into consideration at the time of stock selection. There are so many listed shares but it isn’t necessary that they can be chosen for intraday trading. Take a look at a few tips mentioned below which highlight on

how to pick stocks for intraday trading? :

Shares Volume

One of the main criteria while intraday trading is the volume of the stocks. The total number of shares that are traded in a particular market at a given time reflect volume. It is mostly recommended to purchase stocks that are high in volume.

Stocks of the day

Depending on good news, a few stocks are expected to perform well. Such stocks are anticipated to move in either direction with good volume. These shares can be used for intraday trading.

Week’s movement

Study the movement of stocks that are constantly closing in negative or positive for the previous one week. An analysis of this movement will help you in selecting the stocks for intraday trading.

Resistance level

Some of the stocks to watch out for are those that have broken resistance levels and which move in an upward direction. Such stocks are one of the favorite choices.

Trading in few stock lists

A few intraday traders involve in trading only in particular shares. This is because these traders engage in detailed study of share movement. This is one of the main intraday strategies that are followed by traders.

Top gainers and losers
While some shares come under top gainers, others come under top losers. Such shares may provide fairly good movements. However, keep a close watch on these them in order to begin trading.

Intraday Trading Knowledge 7, Intraday Trading Time Analysis

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 20:10:00 +0530

Intraday Trading Time Analysis

When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These are beneficial for analyzing short and medium-term time periods; however, some traders may use these for long-term analysis. The thumb rule states that usage of daily charts is used for analysing periods exceeding six weeks. They help in assessing stock movements in a better way, thus giving clear picture about stock performance. This helps in planning the trading strategy effectively.six weeks.

Intraday Trading Charts

These charts are quite popular in the trading world, they help to illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Below are some of the most commonly used charts while intraday trading on the Indian stock market:

    Hourly Charts: These charts depict the price movements of a particular stock for a specific period of time. These include detailed information within the confines of a single trading day. Each candlestick or bar is representative of the opening, closing, high, and low of every hourly interval for the time period being analysed. These are generally used for short-term trades, which last from a few hours to a few days.
    15 - Minute Charts: These show the opening, closing, high, and low price movements at 15-minute intervals for a particular stock. The 15-minute charts are often used for day trades lasting from an hour to a few trading sessions.
    Intraday Five-Minute Charts: This is one of the most widely used charts by traders. It represents the price movements of the index or stocks over a particular period of time. Every bar on the chart represents the opening, closing, high, and low of five-minute intervals during the chosen time frame. These charts are frequently useful for quick scalps lasting from several minutes to several hours during a trading session. This kind of chart is also used by long-term traders to identify and select the most efficient entry and exit points while initiating trades over a longer period of time. Using the intraday five-minute chart for long-term share market investment can be a beneficial intraday tip for longer period investors.
    Two-Minute Chart: This is another intraday chart that is popular among stock market traders. This type of chart often depicts the price movement over some hours on the same trading day. Each candlestick shows the opening, closing, high, and low at two-minute intervals during the selected period of time. These charts are most beneficial for day trades or scalping, which can range from some minutes to several hours during one trading session.
    Tick-Trade Charts: These are line charts representing every trade that is executed on the stock market. While using these kinds of charts, traders need to bear in mind that time is of no essence and every point on the chart represents an actual completed trade. In case the markets are illiquid, the chart is depicted as a flat line. Highly liquid market charts show constantly moving ticks. The chart is beneficial while intraday trading in tracking every executed transaction with a line across time, which moves up or down to immediately show the upward or downward movement in the stock price. The tick charts are used by traders for scalping and to keep track of ‘out of money’ trades that need correction.

Based on the traders’ perspectives, market conditions can change, also depending on the period of time being analysed. To be successful, analysis of the accurate time period is important and is a vital intraday trading tip that must always be borne in mind.

Intraday Trading Knowledge 6, Intraday Trading Indicators

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 18:05:00 +0530

Intraday Trading Indicators

Be it a beginner or an established trader, following the basic intraday tips is a common practice before starting the trading day. However, your trading strategy changes with time, and the concurrent events play a huge role in its working. In order to maximize returns, it is essential to understand the market. For this purpose, there are trading indicators. Trading indicators are beneficial tools that are used with a comprehensive strategy to maximize returns..
Information Offered by Intraday Trading Indicators

The direction of the trend to determine the movement
The lack of or existing momentum within the investment market
Profit potential due to the volatility
Determine the popularity through volume measurements.

These are the vital pointers shared by trading indicators. These basic, but beneficial pointers help in assessing the market conditions and allow traders to take better decisions with respect to trade positions.

Useful Intraday Trading Indicators

    Moving Averages: Traders often hear about daily moving averages (DMA), which is the most common and widely used indicator. The moving average is a line on the stock chart that connects the average closing rates over a specific period. The longer the period, the more reliable the moving average. This indicator will help you comprehend the underlying movement of the price, as prices do not move only in one direction. Stock prices are volatile and the moving average indicator smoothens the volatility to provide an understanding of the underlying trend of the price movement.
    Bollinger Bands: This intraday trading indicator is one step ahead of the moving average. This band comprises three lines—the moving average, an upper limit and a lower one. All these are representative of the stock’s standard deviation, which is nothing but the amount by which the price increases or decreases from its average. This provides traders an understanding about the stock’s trading range.
    Momentum Oscillators: Stock prices move up and down. There are short-period cycles that are unrelated to the bullish or bearish market trends. In such cases, it is easy for day traders to miss out on such changes, which is when the momentum oscillator is beneficial. This indicator is depicted within a range of 0 to 100, and is advantageous when the price has achieved a new high or low, and one wants to determine whether it will further rise or fall. In other words, the momentum oscillator helps to understand when the market sentiments are undergoing modifications.
    Relative Strength Index (RSI): The RSI is one of the useful intraday trading tips to compare the share price’s gains and losses. This information is then formulated in an index form, which further helps in narrowing down the RSI score ranging between 0 and 100. This index increases with price rises and vice versa. Once the RSI increases or decreases to a specified limit, you can modify your trading strategy.

Decoding the Intraday Trading Indicators

    Moving Averages: If short-term averages are exceeding the long-term averages, it indicates a bullish market trend. Traders may take a buy call with specific strategies like stop loss either at the long-term moving average or retracement support, and vice versa. This intraday tip can help traders earn decent profits through intraday trading.
    Bollinger Bands: If the stock is trading at a price below the Bollinger Band lower line, there is potential for the price to increase in the future. Traders can choose to take a buy position. On the other hand, if the current stock price is over the upper line, traders can sell the share.
    Momentum Oscillators: If the share price has reached a historical high, and the level of the oscillator is not the same as the price, it is indicative of slowly decreasing demand. This also indicates the possibility of a stock price fall. And the opposite is true for stock price rise.
    RSI: Most analysts will recommend traders to sell the stock when the RSI touches 70 and a buy recommendation when it falls to 30. However, all stocks may not adhere to this pattern, so it is important to analyse the volatility and RSI history before making a decision.

Using intraday trading indicators help in averting risk and placing appropriate trades based on technical analysis and market sentiments.

Intraday Trading Knowledge 5, How to Make Profit in Intraday Trading

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 17:23:00 +0530

How to Make Profit in Intraday Trading

Intraday traders always face inherent risks that exist in the stock markets. Price volatility and fluctuating daily volume are a couple of factors that affect the stocks picked for daily trading. Ideally, Traders should not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. However, the desire to earn higher profits often compels traders to risk more. In order to balance the risk taken, while achieving higher returns, here are some tips to follow:

Opening Range Breakout (ORB):

This intraday trading strategy is widely used by professional traders as well as amateurs. To maximize the potential of this strategy, combining it with the optimum use of indicators, accurate assessment of market sentiment and stringent rules are recommended. ORB has numerous variations; some traders may opt for trade on large breakouts from the opening range and others choose to place their trades on the opening range breakout. The time window for the trades ranges between 30 minutes and three hours.

Mapping Resistance and Support:

Every stock price fluctuates within a range from the initial 30 minutes of the start of the trading session, which is known as the opening range. The highest and lowest prices during this period are assumed as the resistance and support levels. It is advisable to buy when the share price moves beyond the opening range high and sell if the price falls below the opening range low.

Demand-Supply Imbalances:

An important intraday trading tip for beginners is to look for stocks where drastic demand-supply imbalances exist and opt for these as entry points. The financial markets follow the normal demand and supply rules—price reduces when there is no demand for higher supplies and vice versa. Users must learn to identify such points on the price chart through research and studying the historical movements.

Opt for 3:1 Risk-Reward Ratio:

Traders, especially beginners, must understand the appropriate risk-reward ratio. Initially, finding stocks that provide a potential risk-reward ratio of at least 3:1 will be beneficial in earning profits in share market investment. This strategy will allow them to lose small while giving them the opportunity to earn big even if they have losses on most of their trades.

Relative Strength Index (RSI) and Average Directional Index (ADX):

Combining these two intraday trading strategies to find buy and sell opportunities can help traders earn profits. The RSI is a technical momentum indicator comparing recent losses and gains to determine over purchased and oversold stocks. The ADX is beneficial and used to determine when the prices are showing strong trends. In most scenarios, if the RSI crosses the upper limit, it is indicative of a sell trade and vice versa. However, when you combine the RSI and ADX, intraday traders buy when the RSI crosses the upper limit and vice versa. The ADX is used as the trend identifier to help users take their buy or sell decisions.

Intraday trading involves same-day trade settlements. Most traders try to achieve smaller profits through their trades. The golden intraday tip is to ride with the market trend to help make profits.

Intraday Trading Knowledge 4, How to Choose Stocks for Intraday Trading

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 17:14:00 +0530

How to Choose Stocks for Intraday Trading

To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade during the day.

Tips to Choose the Right Intraday Trading Stocks:

Trade Only in Liquid Stocks:

Liquidity is the most important intraday trading tip while choosing the right stocks to trade during the day. Liquid stocks have huge trading volumes whereby larger quantities can be purchased and sold without significantly affecting the price. Generally, lesser liquid stocks do not provide traders the opportunity to purchase and sell larger quantities due to lack of too many buyers. Some traders may argue that illiquid stocks offer bigger opportunities with rapid price modifications. However, statistics show that volatile stocks show greater movements in a short period of time. Thus, most of the possible gains dissipate while the downside risk still looms. Nonetheless, the liquidity of the stocks depends on the quality of the trades placed by the traders. For example, a volume of 50,000 to 75,000 shares is sufficient if the trade is for 50 or 100 Rs; however, if the volume is few hundreds or thousands, volume requirements significantly become larger.

Stay Away from Volatile Stocks:

It is commonly noticed that a low daily volume of traded stocks or those where some huge news is expected move in an unpredictable way. Sometimes, the stock may show volatility even after the announcement of the big news. Traders are recommended to avoid intraday trading in such stocks. A few volatile stocks are in the mid-size segment while most stocks traded in the low-cap categories like S, T, and Z are highly chaotic. In addition to being volatile, these stocks have low daily volumes, making them illiquid.

Trade in Good Correlation Stocks:

An intraday tip for choosing the right stock is to opt for those that have a higher correlation with major sectors and indices. This means when the index or the sector sees an upward movement, the stock price also increases. Stocks that move according to the sentiment of the group are reliable and often follow the expected movement of the sector. For example, strengthening of the Indian Rupee against the Dollar will generally affect all information technology companies dependent on the US markets. A stronger rupee implies lower earnings for the IT companies and weakening rupee will result in higher export incomes for these companies.

Follow the Market Trend before deciding the Right Stock:

One of the most important intraday trading tips is to remember that moving with the trend is always beneficial. During a bull run in the stock market, traders must try to identify stocks that can potentially rise. On the other hand, during the bear run, finding stocks that are likely to decline is advisable.

Pick the Stock you are most confident in after Research:

Undertaking quality research is one of the most vital intraday tips that traders must always remember. Unfortunately, most day traders avoid doing their research. Identifying the index and then finding sectors that are of interest is recommended. The next step is to create a list of several stocks with these sectors. Traders need not necessarily include sector leaders, but rather identify stocks that are liquid. Technical analysis and determining the support and resistance levels along with studying the fundamentals of these stocks will help traders find the right stocks to profit through intraday / day trading.

Intraday Trading Knowledge 3, Intraday Trading Guide for Beginners

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 16:56:00 +0530

When's the Right Time to Invest in stocks?

Intraday means ‘within the day’. Hence, intraday trading refers to trading stocks and ETFs during regular trading hours within single day. You can buy or sell shares within a short span of time, without having to undergo the tedious process of availing physical share certificates. Intraday trading works on the concept of price movement. You buy shares when the price is low and sell them when the price rises, The difference in both the prices amounts to the profit earned.

To begin with, Traders use real-time charts to identify the intraday price movement. Along with price monitoring, there are several other tools that help in making your initial trades successful. Here is a guide of moves and strategies that will help you profit:

Enter and Exit intraday trading at an Ideal Time

A great tip for intraday trading is to trade with the prevalent intraday trend. It allows low-risk entries and potential for greater profit if the trend continues. Such trends provide useful entry and stop-loss strategies. An intraday trading strategy must have entry and exit signals, i.e. when to get into a particular position and when to withdraw. Once the system generates an entry signal and the position is taken, the exit position has to be decided. You can exit if either of the two conditions is met—you have achieved your desired profit or maximum loss is reached. Once the desired profit is achieved, it is advisable to exit the trade. You must set profit and stop-loss targets before the trade and must not let impulsive behaviour get the better of you.

Choose stocks after historical research

The main aim of intraday trading should be to create the best stock picking strategy which preserves capital and, at the same time, controls risk. Start by trading a single stock and learn the characteristics, trends and risks associated with the stock. Once you’ve understood the behaviour of stocks, you will have a better understanding of the best-performing stocks.

Choose highly liquid stocks, i.e. stocks with a high average daily volume. These stocks can be bought and sold in sufficient volumes without causing much impact on prices. Also, trade in stocks that have good correlation with major indices and sectors. Avoid unpredictable stocks, which tend to trade in a volatile manner.

Have a per-defined target

New traders may feel discouraged with their ability to reap profits and may fail to do important things necessary to succeed in day trading. It is important to have a day trading plan to avail of the numerous opportunities in the Stock Market. Beginners need to use trading strategies to take advantage of these opportunities. Set profit and stop-loss price targets before you trade so as to limit your potential loss and to prevent yourself from being too greedy. Also, conduct trade in a disciplined manner. Don’t let impulsive behavior get the better of you. Instead, stick to your day trading plan and don’t expect to get rich in a single trade.

Pick the intraday market direction

You can pick an intraday market direction using the ‘value area’. The value area is the range where almost 70% of the previous day’s trade took place. If the market opens below or above this value area, and remains in this area for two consecutive half-hour periods, then the market has an 80% chance of filling the value area. This parameter helps in gauging the market direction. Once you get used to the concept of value area and the 80% rule, trading can be profitable.

If the market opens higher than the value area, enter a short position closer to the top of the value area. Similarly, if the market opens at a value lower than the value area, enter in a long-term position towards the bottom of the value area.

Intraday Trading Knowledge 2, Tips, Strategies, Basics

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 16:46:00 +0530

Intraday Trading: Tips, Strategies & Basics
Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing financial difficulties.

A few intraday trading tips discussed below should help investors in making the right decision.

Choose Two or Three Liquid Shares
Intraday trading involves squaring open positions before the end of the trading session. This is why it is recommended to choose two or three large-cap shares that are highly liquid. Investing in mid-size or small-caps can result in the investor having to hold these shares because of low trading volumes.

Determine Entry and Target Prices
Before placing the buy order, you must determine your entry level and target price. It is common for a person’s psychology to change after purchasing the shares. As a result, you may sell even if the price sees a nominal increase. Due to this, you may lose the opportunity to take advantage of higher gains because of the price increase.

Utilizing Stop Loss for Lower Impact
Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit. This is beneficial in limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations. This strategy ensures emotions are eliminated from your decision.

Book Your Profits when Target is reached
Most day traders suffer from fear or greed. It is important for investors to not only cut their losses, but also to book their profits once the target price is reached. In case the individual thinks the stock has a further possibility of rising in price, the stop loss trigger must be readjusted to match this expectation.

Avoid being an Investor
Intraday trading, as well as investing, requires individuals to purchase shares. However, factors for both these strategies are distinct. One kind adopts fundamentals while the other considers the technical details. It is common for day traders to take delivery of shares in case the target price is not met. He or she then waits for the price to recover to earn back his or her money. This is not recommended because the stock may not be worthy of investing, as it was purchased only for a shorter duration.
Research your Wish list thoroughly
Investors are advised to include eight to 10 shares in their wish lists and research these in depth. Knowing about corporate events, such as mergers, bonus dates, stock splits, dividend payments, etc., along with their technical levels is important. Using the Internet for finding resistance and support levels will also be beneficial.
Don’t Move against the Market
Even experienced professionals with advanced tools are not able to predict market movements. There are times when all technical factors depict a bull market; however, there may still be a decline. These factors are only indicative and do not provide any guarantees. If the market moves against your expectations, it is important to exit your position to avoid huge losses.
Stock returns can be huge; however earning smaller gains by adhering to these intraday trading tips should be satisfactory. Intraday trading provides higher leverage, which effectively provides decent returns in one day. Being content is crucial to succeeding as a day trader.

Rules for Intraday Trading

Most traders, especially beginners, lose money in intraday trading because of the high volatility of the stock markets. Generally, losses occur due to fear or greed because, while investment is not risky, the lack of knowledge is.
Basic Rules for Intraday Trading

    Timing the Market:
Experts often recommend individuals avoid trading during the first hour, once the markets open. Taking positions between noon and 1pm can increase the possibility of earning profits.
    Plan Investment Strategy and Stick to it:
Every time users initiate a trade, it is important for them to have a clear plan of how to do intraday trading. Determining the entry and exit prices before initiating the trade is crucial. One of the most important intraday trading tips is to use the stop loss trigger to reduce the potential loss on your position. Moreover, once the stock achieves the target price, users are advised to close their position, and not be greedy and expect higher profits.
    Exiting the Position under Unfavourable Conditions:
For trades that provide profits and price-give reversal (price expected to show reverse trends), it is prudent to book the profits and exit open position. In addition, if the conditions are not favourable to the position, it is advisable to immediately exit and not await the stop-loss trigger to be activated. This will help traders reduce their losses.
    Invest Small Amounts that Won’t Pinch:
It is not uncommon for beginners to get carried away once they make some profits during day trading. However, markets are volatile and predicting the trends is not easy even for seasoned professionals. In such situations, beginners can easily lose all their investments. This is why an important intraday tip is to invest smaller sums that a user can afford to lose. This will ensure individuals do not face financial difficulties in case the markets do not favour them.
   Research and Choose Liquid Stocks:
Before commencing intraday trading, it is recommended to understand the basics of the stock market, and the fundamental and technical analyses. There is plenty of research available on the Internet and taking the time to read it will be advantageous. Moreover, there are hundreds of stocks that are traded on the equity markets and traders must trade only two or three liquid stocks. Liquid stocks are those shares that have high volumes in the intraday market. This allows traders to exit open positions before the end of the trading sessions.
    Always Close All Open Positions:
Some traders may get tempted to take delivery of their positions in case their targets are not achieved. This is one of the biggest errors and it is crucial to close all open positions even if traders have to book a loss.
    Spend Time:
Day trading is not for professionals who are employed in a full-time job. Traders must be able to monitor the market movements throughout the market session (from opening bell until its closing) to enable them to make the right calls as required.

Intraday Trading indicators

When it comes to booking profits in intraday trading, you will require to do a lot of research. For the same purpose, you need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate. Intraday Trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns.

How to make profit in intraday trading

Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make profit in intraday trading.
Intraday Time Analysis

When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Below are some of the most commonly used charts while intraday trading on the Indian stock market. Know more about intraday trading time analysis.

How to Choose Stocks for Intraday Trading

To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade

Day trading, if not managed properly, can have drastic results on the financial well-being of users. The temptation of earning huge profits in a short period of time can entice traders. However, with incomplete understanding and knowledge, intraday trading can be harmful.

Intraday Trading Knowledge 1, What is Intraday Trading

pareshratankundu@yahoo.in (NBIG) — Wed, 1 Feb 2017 16:02:00 +0530

What is Intraday Trading
Intraday trading involves buying and selling of stocks within the same trading day. Here stocks are purchased, not with an intention to invest, but for the purpose of earning profits by harnessing the movement of stock indices. Thus, the fluctuations in the prices of the stocks are harnessed to earn profits from the trading of stocks.

An online trading account is used for the purpose of intraday trading. While doing intraday trading, you need to specify that the orders are specific to intraday trading. As the orders are squared off before the end of the trading day, it is also called as Intraday Trading.

Intraday Trading Tips

Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing financial difficulties. A few intraday trading tips will help you learn the art of trading. Know now more about intraday trading tips.
Intraday Trading indicators

When it comes to booking profits in intraday trading, you will require doing a lot of research. For the same purpose, you need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate. Intraday trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns. To get a detailed understanding of intraday trading indicators, and its effect on trading strategy, visit…

How to make profit in intraday trading

Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make the profit in intraday trading.
Intraday Time Analysis

When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Know about some of the most commonly used charts.
How to Choose Stocks for Intraday Trading

To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade during the day. Choosing the right stocks to book profits is an art that you will learn with experience. For beginners, here get some tips to choose stocks for intraday trading.

Dow Theory Expended

pareshratankundu@yahoo.in (NBIG) — Sun, 29 Jan 2017 21:47:00 +0530

Dow Theory Expended

1. Introduction

Any attempt to trace the origins of technical analysis would inevitably lead to Dow theory. While more than 100 years old, Dow theory remains the foundation of much of what we know today as technical analysis.

Dow theory was formulated from a series of Wall Street Journal editorials authored by Charles H. Dow from 1900 until the time of his death in 1902. These editorials reflected Dow's beliefs on how the stock market behaved and how the market could be used to measure the health of the business environment.

Due to his death, Dow never published his complete theory on the markets, but several followers and associates have published works that have expanded on the editorials. Some of the most important contributions to Dow theory were William P. Hamilton's "The Stock Market Barometer" (1922), Robert Rhea's "The Dow Theory" (1932), E. George Schaefer's "How I Helped More Than 10,000 Investors To Profit In Stocks" (1960) and Richard Russell's "The Dow Theory Today" (1961).

Dow believed that the stock market as a whole was a reliable measure of overall business conditions within the economy and that by analyzing the overall market, one could accurately gauge those conditions and identify the direction of major market trends and the likely direction of individual stocks.

Dow first used his theory to create the Dow Jones Industrial Index and the Dow Jones Rail Index (now Transportation Index), which were originally compiled by Dow for The Wall Street Journal. Dow created these indexes because he felt they were an accurate reflection of the business conditions within the economy because they covered two major economic segments: industrial and rail (transportation). While these indexes have changed over the last 100 years, the theory still applies to current market indexes.

Much of what we know today as technical analysis has its roots in Dow's work. For this reason, all traders using technical analysis should get to know the six basic tenets of Dow theory. Let's explore them.

2. The Market Discounts Everything

The first basic premise of Dow theory suggests that all information - past, current and even future - is discounted into the markets and reflected in the prices of stocks and indexes.

That information includes everything from the emotions of investors to inflation and interest-rate data, along with pending earnings announcements to be made by companies after the close. Based on this tenet, the only information excluded is that which is unknowable, such as a massive earthquake. But even then the risks of such an event are priced into the market.

It's important to note that this is not to suggest that market participants, or even the market itself, are all knowing, with the ability to predict future events. Rather, it means that over any period of time, all factors - those that have happened, are expected to happen and could happen - are priced into the market. As things change, such as market risks, the market adjusts along with the prices, reflecting that new information.

The idea that the market discounts everything is not new to technical traders, as this is a major premise of many of the tools used in this field of study. Accordingly, in technical analysis one need only look at price movements, and not at other factors such as the balance sheet.

Like mainstream technical analysis, Dow theory is mainly focused on price. However, the two differ in that Dow theory is concerned with the movements of the broad markets, rather than specific securities.

For example, a follower of Dow theory will look at the price movement of the major market indexes. Once they have an idea of the prevailing trend in the market, they will make an investment decision. If the prevailing trend is upward, it follows that an investor would buy individual stocks trading at a fair valuation. This is where a broad understanding of the fundamental factors that affect a company can be helpful.

It's important to note that while Dow theory itself is focused on price movements and index trends, implementation can also incorporate elements of fundamental analysis, including value- and fundamental-oriented strategies.

Having said that, Dow theory is much more suited to technical analysis.

3. The Three-Trend Market

An important part of Dow theory is distinguishing the overall direction of the market. To do this, the theory uses trend analysis.

Before we can get into the specifics of Dow theory trend analysis, we need to understand trends. First, it's important to note that while the market tends to move in a general direction, or trend, it doesn't do so in a straight line. The market will rally up to a high (peak) and then sell off to a low (trough), but will generally move in one direction.

Figure 1: an uptrend

An upward trend is broken up into several rallies, where each rally has a high and a low. For a market to be considered in an uptrend, each peak in the rally must reach a higher level than the previous rally's peak, and each low in the rally must be higher than the previous rally's low.

A downward trend is broken up into several sell-offs, in which each sell-off also has a high and a low. To be considered a downtrend in Dow terms, each new low in the sell-off must be lower than the previous sell-off's low and the peak in the sell-off must be lower then the peak in the previous sell-off.

Figure 2: a downtrend

Now that we understand how Dow theory defines a trend, we can look at the finer points of trend analysis.

Dow theory identifies three trends within the market: primary, secondary and minor. A primary trend is the largest trend lasting for more then a year, while a secondary trend is an intermediate trend that lasts three weeks to three months and is often associated with a movement against the primary trend. Finally, the minor trend often lasts less than three weeks and is associated with the movements in the intermediate trend.

Let us now take a look at each trend.

Primary Trend

In Dow theory, the primary trend is the major trend of the market, which makes it the most important one to determine. This is because the overriding trend is the one that affects the movements in stock prices. The primary trend will also impact the secondary and minor trends within the market.
Dow determined that a primary trend will generally last between one and three years but could vary in some instances.

Figure 3: an uptrend with corrections

Regardless of trend length, the primary trend remains in effect until there is a confirmed reversal.
For example, if in an uptrend the price closes below the low of a previously established trough, it could be a sign that the market is headed lower, and not higher.

When reviewing trends, one of the most difficult things to determine is how long the price movement within a primary trend will last before it reverses. The most important aspect is to identify the direction of this trend and to trade with it, and not against it, until the weight of evidence suggests that the primary trend has reversed.

Secondary, or Intermediate, Trend

In Dow theory, a primary trend is the main direction in which the market is moving. Conversely, a secondary trend moves in the opposite direction of the primary trend, or as a correction to the primary trend.

For example, an upward primary trend will be composed of secondary downward trends. This is the movement from a consecutively higher high to a consecutively lower high. In a primary downward trend the secondary trend will be an upward move, or a rally. This is the movement from a consecutively lower low to a consecutively higher low.

Below is an illustration of a secondary trend within a primary uptrend. Notice how the short-term highs (shown by the horizontal lines) fail to create successively higher peaks, suggesting that a short-term downtrend is present. Since the retracement does not fall below the October low, traders would use this to confirm the validity of the correction within a primary uptrend.

Figure 4: a secondary trend w/ a primary uptrend

In general, a secondary, or intermediate, trend typically lasts between three weeks and three months, while the retracement of the secondary trend generally ranges between one-third to two-thirds of the primary trend's movement. For example, if the primary upward trend moved the DJIA from 10,000 to 12,500 (2,500 points), the secondary trend would be expected to send the DJIA down at least 833 points (one-third of 2,500).

Another important characteristic of a secondary trend is that its moves are often more volatile than those of the primary move.

Minor Trend

The last of the three trend types in Dow theory is the minor trend, which is defined as a market movement lasting less than three weeks. The minor trend is generally the corrective moves within a secondary move, or those moves that go against the direction of the secondary trend.

Figure 5

Due to its short-term nature and the longer-term focus of Dow theory, the minor trend is not of major concern to Dow theory followers. But this doesn't mean it is completely irrelevant; the minor trend is watched with the large picture in mind, as these short-term price movements are a part of both the primary and secondary trends.

Most proponents of Dow theory focus their attention on the primary and secondary trends, as minor trends tend to include a considerable amount of noise. If too much focus is placed on minor trends, it can to lead to irrational trading, as traders get distracted by short-term volatility and lose sight of the bigger picture.

Stated simply, the greater the time period a trend comprises, the more important the trend.

4. The Three Phases Of Primary Trends

Since the most vital trend to understand is the primary trend, this leads into the third tenet of Dow theory, which states that there are three phases to every primary trend – the accumulation phase (distribution phase), the public participation phase and a panic phase (excess phase).

Let us now take a look at each of the three phases as they apply to both bull and bear markets.

Primary Upward Trend (Bull Market)

The Accumulation Phase
The first stage of a bull market is referred to as the accumulation phase, which is the start of the upward trend. This is also considered the point at which informed investors start to enter the market.

The accumulation phase typically comes at the end of a downtrend, when everything is seemingly at its worst. But this is also the time when the price of the market is at its most attractive level because by this point most of the bad news is priced into the market, thereby limiting downside risk and offering attractive valuations.

However, the accumulation phase can be the most difficult one to spot because it comes at the end of a downward move, which could be nothing more than a secondary move in a primary downward trend - instead of being the start of a new uptrend. This phase will also be characterized by persistent market pessimism, with many investors thinking things will only get worse.

From a more technical standpoint, the start of the accumulation phase will be marked by a period of price consolidation in the market. This occurs when the downtrend starts to flatten out, as selling pressure starts to dissipate. The mid-to-latter stages of the accumulation phase will see the price of the market start to move higher.

Figure 1: the accumulation phase

A new upward trend will be confirmed when the market doesn't move to a consecutively lower low and high.

Public Participation Phase
When informed investors entered the market during the accumulation phase, they did so with the assumption that the worst was over and a recovery lay ahead. As this starts to materialize, the new primary trend moves into what is known as the public participation phase.

During this phase, negative sentiment starts to dissipate as business conditions - marked by earnings growth and strong economic data - improve. As the good news starts to permeate the market, more and more investors move back in, sending prices higher.

This phase tends not only to be the longest lasting, but also the one with the largest price movement. It's also the phase in which most technical and trend traders start to take long positions, as the new upward primary trend has confirmed itself - a sign these participants have waited for.

Figure 2: the public participation phase

The Excess Phase
As the market has made a strong move higher on the improved business conditions and buying by market participants to move starts to age, we begin to move into the excess phase. At this point, the market is hot again for all investors.

The last stage in the upward trend, the excess phase, is the one in which the smart money starts to scale back its positions, selling them off to those now entering the market. At this point, the market is marked by, as Alan Greenspan might say, "irrational exuberance". The perception is that everything is running great and that only good things lie ahead.

This is also usually the time when the last of the buyers start to enter the market - after large gains have been achieved. Like lambs to the slaughter, the late entrants hope that recent returns will continue. Unfortunately for them, they are buying near the top.

During this phase, a lot of attention should be placed on signs of weakness in the trend, such as strengthening downward moves. Also, if the upward moves start to show weakness, it could be another sign that the trend may be near the start of a primary downtrend.

Figure 3: the excess phase

Primary Downward Trend (Bear Market)

The Distribution Phase

The first phase in a bear market is known as the distribution phase, the period in which informed buyers sell (distribute) their positions. This is the opposite of the accumulation phase during a bull market in that the informed buyers are now selling into an overbought market instead of buying in an oversold market.

In this phase, overall sentiment continues to be optimistic, with expectations of higher market levels. It is also the phase in which there is continued buying by the last of the investors in the market, especially those who missed the big move but are hoping for a similar one in the near future.

As was the case in the accumulation phase, the distribution phase can be difficult to spot in its early stages. The reason for this is that it may be disguised as a secondary downward trend within the primary upward trend.

From a technical standpoint, the distribution phase is represented by a topping of the market where the price movement starts to flatten as selling pressure increases . The mid to latter stages of the distribution phase will see prices start to fall as more and more investors, anticipating weakness, exit their positions.

A new downward trend will be confirmed when the previous trend fails to make another consecutive higher high and low.

Public Participation Phase

This phase is similar to the public participation phase found in a primary upward trend in that it lasts the longest and will represent the largest part of the move - in this case downward.

During this phase it is clear that the business conditions in the market are getting worse and the sentiment is becoming more negative as time goes on. The market continues to discount the worsening conditions as selling increases and buying dries up.

This is also the point at which most trend followers and technical traders start to dump their positions and take short positions as the new downward trend has confirmed itself.

The Panic Phase

The last phase of the primary downward market tends to be filled with market panic and can lead to very large sell-offs in a very short period of time. In the panic phase, the market is wrought up with negative sentiment, including weak outlooks on companies, the economy and the overall market.

During this phase you will see many investors selling off their stakes in panic. Usually these participants are the ones that just entered the market during the excess phase of the previous run-up in share price.

But just when things start to look their worst is when the accumulation phase of a primary upward trend will begin and the cycle repeats itself.

Candlestick Outside Vertical Bars and How to Trade Them

pareshratankundu@yahoo.in (NBIG) — Sun, 6 Apr 2014 18:47:00 +0530

Few Candlestick patterns can excite traders as much as the Engulfing pattern, or also known as the ‘Outside Vertical Bar.’

This is a one-bar formation that can pop up on any time-frame chart; with the longer time-frames often increasing the potential reliability of the signal.

With the Outside Vertical Bar, what we are looking for is fairly simple: We want the candle in question to completely cover the range of the previously printed candle; taking out the previous high and low.

The chart below illustrates a Bearish Outside Vertical Bar, also known as the Bearish Engulfing Pattern.

As you can see, the Outside Vertical bar takes out the high, and then the low of the previous bar. Many traders will look at Outside Vertical Bars as continuation patterns – trading in the direction of the Outside candle. So in the above chart, traders could be looking to go short upon the close of the Outside Vertical Bar; in an effort to reap the extension of momentum that was very visible in the previous candle.

The Bullish Outside Vertical Bar is similar to the Bearish version, with the exception that the Bullish Candle closes at a level higher than it opened. The chart below illustrates a Bullish Outside Vertical Bar (Bullish Engulfing Pattern).

In the above chart, traders noticing that the Outside bar had encompassed the high and low of the previous candle – looking to go long. As we can see, momentum continued thereafter and this is the goal of the trader trading with Outside Vertical Bars: To capitalize on the momentum that created the engulfing candle.

How to Trade Outside Vertical Bars

Many traders looking for extreme volatility may look to trade outside bars in whichever direction they present themselves. As in, if they receive a Bearish Outside Vertical Bar – they go short. If they receive a Bullish Outside Vertical Bar, they go long.

Try to be more judicious in the manner in which play outside bars, and attempt to focus solely on outside bars that agree with assessment of the trend. Identified the mannerism in which grade trend via price action in which grade the trend with successive higher high’s and higher low’s, or lower low’s and lower high’s.

After identifying the cleanest, strongest trends via price action – wait for an outside bar that agrees with the direction in which want to trade that pair, and that is when will enter.

Outside vertical bars function as ‘triggers,’ to initiate trades in the direction of the longer-term, extended trends that can find in markets.

Basic knowledge of risk management

pareshratankundu@yahoo.in (NBIG) — Tue, 25 Mar 2014 10:52:00 +0530

Basic knowledge of risk management

Every investment is subject to risk due to potential unfavorable price changes. As the financial markets constitute a complex system with many factors influencing the demand and supply at the same time, it is important to know that the result of practically any given transaction is uncertain.

Risk management depends very much on the types of assets the trader is interested in. In this text we would like to discuss the tools that can be used in order to minimize potential losses resulting from adverse price changes:

study the different types of assets
plan your strategy
establish the maximum acceptable risk
use the different order types.

Study the different types of assets

It is crucial to first understand the liquidity.

Depending on the type of asset you are interested in, there may be more or less volatility related. The higher the volatility, the higher the financial risk associated with the given market. This means that operating on a such market involves potentially higher profits and losses than in the case of markets with lower volatility. There are markets where there is not much movement, while others change very often and the price changes may be quite significant.

Another important issue is the spread - i.e. the difference between the ask price and bid price. Different assets have different spreads, as the spread size depends on such factors as liquidity of the market, its volatility or time of the day. As the spread represents an indirect cost of the transaction for a trader, it can be related to the volatility in order to compare the cost of transaction between the given markets. For example, the cost of operating on a market where the spread is 4 points and the difference between daily maximum and minimum is equal to 60 points, can be considered to be more attractive than in the case of a market where the spread is 2 points, but the daily price range is just 20 points.

Plan your strategy

It is imperative to decide what type of investment strategy is to be implemented

The strategy shall define the key aspects of the trades, including their time horizon. There are assets where it is difficult to trade in the short term, as the cost of transaction is relatively high in relation to the size of typical price movements. However, it is still possible to consider such markets for the purposes of investment in the longer term, cost carry transactions or possible arbitrage. On the other hand, assets that change very often could provide a good possibility for transactions in the short and ultra short term.

Establish the maximum acceptable risk for an investment or trade

Important step that many investors seem to ignore

It may be a good idea to establish a maximum amount of money that he/she is willing to risk in any given transaction. Such an amount can be defined as a percentage of the available capital. Considering an example where the trader is willing to risk no more than 3% of the portfolio, 3% of that amount would mean that the investor is willing to “risk” no more than $300 USD in a trade.

The limit calculated as shown above, or using any other method, can be taken into account when considering where to set the stop loss or close the transaction by any other means. In order to do that, one should also consider a value of pips. Assuming that for a specific asset the pips value is equal to $10 USD, and the acceptable risk is $300 USD, then a trader may consider placing a stop-loss with a value of 300/10 = 30 pips from the level where the transaction was opened.

Use the different orders.

Understanding the possibilities behind the pending orders of the trading platform may contribute to more efficient trading plan

There are many different orders available at the MT5, which can potentially help to realise profits or limit the losses during the investment process:

Market orders - buy/sell
Stop loss
Take profit

Market orders (or instant execution orders): these are simply orders (buy or sell) that are executed instantly at the time they are placed.

Stop-loss: stop-loss orders are additional orders available for both pending orders and market orders. They can also be attached to already opened positions on a given market. These types of orders are the most basic orders designated for limiting the potential losses, for example when an investor is not able to follow prices all the time. A trader establishes stop-loss levels by either specifying the level in points from the current price or by specifying an exact price level. For long positions, the stop-loss value must be lower than the current price. For short positions, the stop-loss value must be higher than the current price.

Take-profit: Take profit is an additional order available for both pending orders and market orders. They can also be attached to already opened positions on a given market. The difference between this order and the stop-loss order is that in the take-profit order, a trader will fix the exact profit he wants to realise. Sometimes, investors are not actually sure how much a price will continue its direction, so they fix a value for which a profit is guaranteed if the price reaches that level. For long positions, the take-profit level must be above the current price. For short positions, the take-profit level must be lower than the current price.

Pending orders: Pending orders will be placed immediately but executed only when the price has reached a previously determined price. There are six types of
orders available as pending orders:

Buy limit
Sell limit
Buy stop
Sell stop
Buy stop limit
Sell stop limit

Buy limit: an investor is willing to buy an asset when the price has reached a certain level. At the time of placing of an order the market price must be higher than the one specified as the buy limit price. In this situation, investors believe that prices will fall to a certain level and will later rise.

Sell limit: an investor in this case is willing to sell an asset when the price has reached a specified level. At the time of placing an order, the market price must be lower than the one specified by the investor (sell limit price). This approach reflects the belief of the trader that prices will reach a certain level (the sell limit price level) and then start falling.

Buy stop: by placing a buy stop order an investor expects that if prices reach a certain level (buy stop price), they will keep on rising. The price at which the transaction is concluded will be less favourable than the current market price. However , the fact of reaching that level could be interpreted as a confirmation signal. Once executed, this order will buy an asset after reaching a level defined by the investor. The market price at the time of placing the order must be lower than the defined buy stop level.

Sell stop: by placing a sell stop order a trader expects the prices to keep on falling, once a certain level (sell stop price) below the current market price is reached. Reaching this level can also be interpreted as a confirmation order of the investor’s prediction. Once executed, this order will sell an asset after reaching a level previously established by the trader. The market price at the time of placing the order must be higher than the defined sell stop level.

Buy stop limit: It is combines both buy stop and buy limit features. This order will place a pending order (buy limit order) only if the price previously reaches a defined price by the investor. One may say that this is a conditional pending order, that will only be executed when the price reaches a certain level. To place this order the current price must be lower than the conditional price level - i.e. the price which activates the pending order.

Sell stop limit: This is a conditional pending order. An order will be placed if and only if a price reaches a price level previously defined by the investor. To place this conditional order, the current market price level must be higher than the conditional price. Once prices start falling and reach the conditional price level a new sell limit order will be placed.

Harmonic Pattern

pareshratankundu@yahoo.in (NBIG) — Wed, 19 Mar 2014 23:00:00 +0530

HARMONIC PATTERNS

Harmonic price patterns take geometric price patterns to the next level by using Fibonacci numbers to define precise turning points. Unlike other trading methods, Harmonic trading attempts to predict future movements. This is in vast contrast to common methods that are reactionary and not predictive. Let's look at some examples of how harmonic price patterns are used to trade on the market. (Extensions, clusters, channels and more! Discover new ways to put the "golden ratio" to work.
Combine Geometry and Fibonacci Numbers
Harmonic trading combines patterns and math into a trading method that is precise and based on the premise that patterns repeat themselves. At the root of the methodology is the primary ratio, or some derivative of it (0.618 or 1.618). Complementing ratios include: 0.382, 0.50, 1.41, 2.0, 2.24, 2.618, 3.14 and 3.618. The primary ratio is found in almost all natural and environmental structures and events; it is also found in man-made structures. Since the pattern repeats throughout nature and within society, the ratio is also seen in the financial markets, which are affected by the environments and societies in which they trade. (Don't make these common errors when working with Fibonacci numbers - check out Top Fibonacci Retracement Mistakes To Avoid) By finding patterns of varying lengths and magnitudes, the trader can then apply Fibonacci ratios to the patterns and try to predict future movements. The trading method is largely attributed to Scott Carney, although others have contributed or found patterns and levels that enhance performance.

Issues with Harmonics
Harmonic price patterns are extremely precise, requiring the pattern to show movements of a particular magnitude in order for the unfolding of the pattern to provide an accurate reversal point. A trader may often see a pattern that looks like a harmonic pattern, but the Fibonacci levels will not align in the pattern, thus rendering the pattern unreliable in terms of the Harmonic approach. This can be an advantage, as it requires the trader to be patient and wait for ideal set-ups.

Harmonic patterns can gauge how long current moves will last, but they can also be used to isolate reversal points. The danger occurs when a trader takes a position in the reversal area and the pattern fails. When this happens, the trader can be caught in a trade where the trend rapidly extends against them. Therefore, as with all trading strategies, risk must be controlled.

It is important to note that patterns may exist within other patterns, and it is also possible that non-harmonic patterns may (and likely will) exist within the context of harmonic patterns. These can be used to aid in the effectiveness of the harmonic pattern and enhance entry and exit performance. Several price waves may also exist within a single harmonic wave (for instance a CD wave or AB wave). Prices are constantly gyrating; therefore, it is important to focus on the bigger picture of the time frame being traded. The fractal nature of the markets allows the theory to be applied from the smallest to largest time frames.
To use the method, a trader will benefit from a chart platform that allows the trader to plot multiple Fibonacci retracements to measure each wave.

The Visual Patterns and How to Trade Them

There is quite an assortment of harmonic patterns, although there are four that seem most popular. These are the Gartley, butterfly, bat and crab patterns.

GARTLEY PATTERN
The Gartley was originally published by H.M. Gartley in his book Profits in the Stock Market and the Fibonacci levels were later added by Scott Carney in his book The Harmonic Trader.

Figure 1: The Gartley Pattern.

The bullish pattern is often seen early in a trend, and it is a sign the corrective waves are ending and an upward move will ensue at point D. All patterns may be within the context of a broader trend or range and traders must be aware of that (see Elliott Wave Theory). Point D is a 0.786 correction of the XA wave, and it is a 1.27 or 1.618 extension of the BC wave. The area at D is known as the potential reversal zone (PRZ). This is where long positions could be entered, as some price confirmation of reversal is encouraged. A stop is placed just below the PRZ.

More About Bullish / Bearish Gartley Pattern.

Bearish Gartley

The bearish gartley pattern formation is similar to head and shoulders pattern, but as you can see the point C is below the point A, hence it is not head and shoulder pattern.

Formation and trading strategy of Bearish Gartley pattern:

Point B must retrace 61.8% of AX movement.

Point C must retrace anywhere from 38.2% to 88.6% of BA movement.

Point D must be 138.2% or 161.8% extension of the BC movement.

Point D must retrace 76.8% of AX movement. This is our selling area.

Bullish Gartley

The bullish pattern is as seen below, its formation is quite similar to inverse head and shoulders pattern, but as you can see below point C is not on the same level as point A.

Formation of Bullish Gartley pattern and trading strategy:

Point B can retrace 61.8% of XA movement.
Point C can retrace anywhere from 38.2% to 88.6% of AB movement.
Point D can be 138.2% or 161.8% extension of the CD move.
Point D can retrace 76.8% of XA movement. Point D is our buying area.

Stop loss in this is always very strict and hence we get very cool risk reward ratio, many times around 1:5 or more. The very important reason for trading this pattern is that it is based on uncertain places where traders are most afraid to take positions, hence giving better meaning for risk.

Butterfly Pattern

Figure 2: The Butterfly Pattern

The butterfly pattern is different than the Gartley in that it focuses on finding reversals at new lows (bullish) or new highs (bearish). D is a new low and a potential reversal point if the Fibonacci figures align with the structure. D would need to be an extension of BC in the magnitude of 1.618 or 2.618. This should align with an extension of XA in the magnitude of a 1.27 or 1.618. Entry is taken near D with price confirmation of the reversal encouraged. Stops are placed slightly below the potential reversal area (bullish).

Bat Pattern

Figure 3: The Bat Pattern

The bat pattern is similar to Gartley in appearance, but not in measurement. Point B has a smaller retracement of XA of 0.382 or 0.50 (less than 0.618), but the extension of the BC wave into D is at minimum 1.618 and potentially 2.618. Therefore, D will be a 0.886 retracement of the original XA wave. This is the PRZ: when selling has stopped and buying enters the market, enter a long position and take advantage of the bullish pattern. Place a stop just below the PRZ.

Crab Pattern

Figure 4: The Crab Pattern

The crab is considered by Carney to be one of the most precise of the patterns, providing reversals in extremely close proximity to what the Fibonacci numbers indicate. This pattern, similar to the butterfly, looks to capture a high probability reversal at a new (recent) low or high (bullish or bearish respectively). In a bullish pattern, point B will pullback 0.618 or less of XA. The extension of BC into D is quite large, from 2.24 to 3.618. D (the PRZ) is a 1.618 extension of XA. Entries are made near D with a stop-loss order just outside the PRZ.

Fine-Tuning Entries and Stops

Each pattern provides a PRZ. This is not an exact level, as two measurements - extension or retracement of XA - creates one level at D and the extension of BC creates another level at D. This actually makes D a zone where reversals are likely. Traders will also notice that BC can have differing extension lengths. Therefore, traders must be aware of how far a BC extension may go. If all projected levels are within close proximity, the trader can enter a position at any area. If the zone is spread out, such as on longer-term charts where the levels may be 50 pips or more apart, it is important to wait to see if the price reaches further extension levels of BC before entering a trade.

Stops can be placed outside the largest potential extension of BC. In the crab pattern, for example, this would be 3.618. If the rate reversed before 3.618 was hit, the stop would be moved to just outside the closed Fibonacci level to the rate low (bullish pattern) or rate high (bearish pattern) in the PRZ.

Figure 5 is an intra-day example of a butterfly pattern from May 3, 2011.

Figure 5. Bearish Butterfly Pattern - EUR/USD, 15 Minute

The price touches almost exactly the 1.618 extension level of XA at 1.4892 and the extension of BC to 2.618 is very close at 1.4887 (there are two Fibonacci tools used, one for each wave). This creates a very small PRZ, but it may not always be the case. Entry is taken after the rate enters the zone and then begins to retreat. The stop is placed just outside the most significant level that was not reached by the rate, in this case a few pips above the 1.618 XA extension. Targets can be based on support levels within the pattern; therefore, an initial profit target would be just above point B.

The Bottom Line

Harmonic trading is a precise and mathematical way to trade, but it requires patience, practice and a lot of study to master the patterns. Movements that do not align with proper pattern measurements invalidate a pattern and can lead traders astray. The Gartley, butterfly, bat and crab are the better-known patterns that traders can watch for. Entries are made in the potential reversal zone when price confirmation indicates a reversal, and stops are placed outside the nearest significant (for the pattern) Fibonacci level that was not hit by the BC or XA extensions/retracements into the D (PRZ) area.

Beyond The Technical Analysis Expended

Trend Bars - A Simple Way to Look at Price Action

What is a Trend Bar?

Guidelines for Reading Price Action with Trend Bars

Price Action Chart Examples

Chart Markup Legend

Example 1: SPY Daily Chart

Example 2: ES Intraday 5-Minute Chart

Open a Price Chart and Start Reading

Be Careful ! These 4 things that can make you fail in Stock Trading

Mistake #1 – I focused too much on Knowledge

Mistake #2 – I went against the Trend

Mistake #3 – I didn’t realize that Money management is supreme

Why one should use Money management ?

Mistake 4# – I thought trading is all about WINNING

I was so WRONG

All you can do is 3 things

WINNING MORE , but still LOOSING

Conclusion

Relationship of Risk & Return

Different Types Of Stocks

Option Put-Call Ratio

Guide to Put-Call Ratio

How to Interpret Put/Call ratio

Bank Nifty futures vis-à-vis Bank Nifty PCR

PCR Analysis

Chart A –Nifty Futures July Series

Chart B- Nifty 10,000 July CE

How to read Balance Sheet for Fundamental Analysis

Volume Analysis Patterns

Volume Analysis Patterns

Accumulation

Distribution

Confirmation of Trend

Volume Spikes

Breakout Signals

Notes of Precaution

Butterfly and Bat Chart Patterns

World Stock Exchanges Comparing

Largest World Stock Exchanges Comparing

Intraday Trading Knowledge 9, Importent Summary

Glossary, Stock Market Basic, Share Market Basic

Share Market Basic, Dividends

Intraday Trading Knowledge 8, Do & Don't for Intraday Traders

Intraday Trading Knowledge 8, Stock Selection Idea For Intraday Trading

Intraday Trading Knowledge 7, Intraday Trading Time Analysis

Intraday Trading Knowledge 6, Intraday Trading Indicators

Intraday Trading Knowledge 5, How to Make Profit in Intraday Trading

Intraday Trading Knowledge 4, How to Choose Stocks for Intraday Trading

Intraday Trading Knowledge 3, Intraday Trading Guide for Beginners

Intraday Trading Knowledge 2, Tips, Strategies, Basics

Intraday Trading Knowledge 1, What is Intraday Trading

Dow Theory Expended

2. The Market Discounts Everything

3. The Three-Trend Market

Secondary, or Intermediate, Trend

4. The Three Phases Of Primary Trends

Candlestick Outside Vertical Bars and How to Trade Them

Basic knowledge of risk management

Basic knowledge of risk management

Harmonic Pattern

Formation and trading strategy of Bearish Gartley pattern:

Formation of Bullish Gartley pattern and trading strategy:

Butterfly Pattern

Bat Pattern

Crab Pattern