Showing posts with label Tutorial. Show all posts
Showing posts with label Tutorial. Show all posts
Monday, 27 February 2012
Friday, 18 November 2011
Break out chart pattern
1-2-3 CONTINUATION PATTERN:
Criteria:1. Wide range bar breaking out of support.
2. Narrow range bar near/at the highs of the previous wide range bar. Often this narrow range bar is also an inside range bar.
Entry: Switch to a smaller time frame and take a breakout from the base or use above the highs of the narrow range bar of bar 2.
Stop: Under the lows of the base or last major pivot low on the smaller time frame, under the lows of the narrow range bar, or under the lows of the third bar at the time of the setup.
Target: Bar 1 = Bar 3
Examples:
Top
THE 2B SETUP:
Criteria: A high followed by a slightly higher high.Entry: As the high of the first high breaks on a pullback from the second high. Alternate entry (used by Toni): Under the prior bar's lows after the second high is made. For instance if the lows of the bar making the second high is $50, entry is under $50. The only time it is not under the bar that made the second high is if that high is followed by an inside range bar, so you would use a break in the lows of the inside range bar.
Stop: Over the second high.
Target: Price or moving average support.
Example:
Top
ASCENDING TRIANGLE:
Criteria: Equal/Nearly equal highs and higher lows on decreasing volume.Entry: Breakout from the trend lines on higher then average volume as the trend lines converge.
Stop: Under the lows of the base or last major pivot low on the smaller time frame or under the lows of the setup bar.
Target: Equal distance on a breakout comparable to the distance between the first high and first low in the triangle. Ascending triangles tend to breakout higher.
Example:
Top
AVALANCHE:
Criteria:1. Uptrend
2. Stronger than average rally.
3. Pullback of 3-5 bars comparable to or stronger than previous rally, usually on increasing volume, to moving average support (typically the 10, 20 or 30 sma.)
4. Hugs the moving average support on decreasing volume. 4-5 bars average.
5. Moving averages start to converge (10 and 20 sma if it's setting up on the 20 sma.)
Entry: Switch to smaller time frame and enter on a breakdown in support or going into resistance.
Stop: Over previous or current day's highs. Usually you will use current day's highs or intraday resistance.
Target: Next major simple moving average.
Example1:
Example 2:
Top
BASING / TRADING RANGE / CONGESTION / CONSOLIDATION
Example:
Top
BEAR FLAG:
Criteria:1. Downtrend.
2. Gentle pullback to resistance, such as the 20 sma, on decreasing volume.
Entry: Below the previous bar's lows or using an intraday breakdown such as a break in the uptrend line of the flag. Volume should start to pick up at this time to confirm the setup.
Stop: Above the previous bar's highs or above intraday resistance.
Target: New lows, usually on high volume.
Example:
Top
BREAKOUT:
Criteria: A base/trading range at highs or lows.Entry: A breakout in the most recent section of the trading range or trend line in the direction of the trend prior to the trading range. Can also take an entry into moving average support in the case of a long and sma resistance in the case of a short.
Stop: Under simple moving average support such as the 15 minute 20 sma in the case of a setup on the 15 minute chart or under the last pivot low within the trading range.
Target: Moving average resistance (like the 15 minute 200 sma), price resistance (such as a previous pivot), or an equal move to that before the trading range on the move out of the trading range.
Example:
IBC was mentioned in the Live Trading Room on 7/16/2002 to watch on 7/17/2002 and again in the morning on 7/17 as a breakout daytrade.
Top
BULL FLAG:
Criteria:1. Uptrend.
2. Gentle pullback to support, such as the 10 or 20 sma, on decreasing volume.
Entry: Above the previous bar's highs or using an intraday breakout such as a break in the downtrend line of the flag. Volume should start to pick up at this time to confirm the setup.
Stop: Below the previous bar's highs or below intraday resistance.
Target: New highs
Example:
Top
BULL TRAP - A gap setup:
Criteria:1. A bullish daily pattern. Preferably where the market opens at lows and closes at highs.
2. A gap down in the morning, generally on news, whereby the stock opens at or under the previous day's lows.
Entry: Break in 5 minute lows (A) or an intraday setups such as a breakdown out of a base at lows (B) or a bear flag.
Stop: Depending on the objective and entry. On a break in 5 minute lows for a day or swingtrade you can use above the 5 minute highs. For intraday breakdown setups use a stop over the last 5-7 bars or over significant intraday moving average resistance. The same goes for intraday bear flags. For position trades use over the high of the previous day or over the current day's highs.
Target: Equal distance on a breakout comparable to the distance between the first high and first low in the triangle.
Example:
Top
CORE BUY SETUP:
Criteria:1. Uptrend.
2. Gentle pullback of 3-5 bars average to the 10-20 simple moving average zone on decreasing volume.
Entry: Above the previous bar's highs or using an intraday breakout. Volume should pick up at this time to confirm the setup.
Stop: Under the previous bar's lows or under intraday support.
Target: New highs.
Example:
CBH was given in the Live Trading Room on 4/24 as a Core Buy swingtrade.
Example:
Top
CORE SHORT SETUP:
Criteria:1. Downtrend.
2. Gentle pullback of 3-5 bars average to the 10-20 simple moving average resistance zone on decreasing volume.
Entry: Below the previous bar's lows or using an intraday breakdown. Volume should start to pick up at this time to confirm the setup.
Stop: Above the previous bar's highs or above intraday resistance.
Target: New lows, usually on high volume.
Example:
Top
CUP WITH HANDLE:
A type of Phoenix.Criteria: A stock coming out of a downtrend with rounded lows that puts in a slightly lower high and then pulls back gradually to put in a higher low.
Entry: On a breakout higher out of the pullback. There will often be a moving average crossover (such as a cross in the 10 and 20 sma)
Stop: Under lows of the pullback.
Target: Highs of the beginning of the cup or an equal move out of pullback as compared to move off lows.
Example:
Top
HEAD & SHOULDERS:
Criteria: High (left shoulder) followed by a higher high (head) and then a lower high (right shoulder) which is comparable to the left shoulder.Entry: Breakdown from the neckline. The neckline connects the lows on either side of the head. Alternative and preferred entry is using a bear flag breakdown to enter after the right shoulder has formed.
Stop: Over the past pivot high or 20 simple moving average resistance
Target: Previous reversal prices and support zones such as a 5 minute 200 sma if the setup occurs on the 15 minute chart.
Example:
The Nasdaq was given in the Live Trading Room on 5/31 as a Head & Shoulders market alert. (05/31/02 10:41:54 <Toni> Market Alert: 15 minute Nasdaq Head& Shoulders)
Top
OOPS DAILY BUY:
Criteria: Wide range bar on increased volume (preferably at a strong support level)Entry: Above 5 minute high on a gap up or an intraday breakout to highs.
Stop: Under current or previous day's lows
Target: Price resistance, 5 minute 200 sma, 15 minute 200 sma, 10 & 20 day sma. This is a 1/2 - 1 1/2 day hold, depending on objective.
Examples:
Top
PENNANTS / WEDGES
Top
PHOENIX
Criteria:
1. Downtrend
2. Pullback higher of 3-5 bars comparable to or stronger than previous decline, usually off lows on high volume, to 20 simple moving average resistance
3. Hugs the moving average support on decreasing volume. 4-5 bars average.
4. Moving averages start to converge (10 and 20 sma if it's setting up on the 20 sma.)
Entry: Switch to smaller time frame and enter on a breakout in resistance and/or the 20sma.
Stop: Under previous or current day's lows on a daily setup. Usually I will use current day's lows or a break in intraday support.
Target: Next major simple moving average. For example, a setup on the 2 minute chart has a target of 5 minute 20 sma and a setup on the 5 minute chart has a target of the 15 minute 20 sma. Also watch for equal moves.
Example:
Top
REVERSE HEAD AND SHOULDERS
General Criteria: Low (left shoulder) followed by a lower low (head) and then a higher low (right shoulder) which is comparable to the left shoulder.Entry: Break higher from the neckline. The neckline connects the highs on either side of the head. Alternative and preferred entry is using a Phoenix to enter after the right shoulder has formed.
Stop: Under the past pivot low or 20 simple moving average support
Target: Previous reversal prices and resistance zones such as a 5 minute 200 sma if the setup occurs on the 15 minute chart. Also whole number resistance.
Example:
Top
SYMMETRICAL TRIANGLE
Criteria: Lower highs and higher lows on decreasing volume.Entry: Breakout from the trend lines on higher then average volume as the trend lines converge.
Stop: Under the lows of the base or last major pivot low on the smaller time frame or under the lows of the setup bar in the case of a buy.
Target: Equal distance on a breakout comparable to the distance between the first high and first low in the triangle. Symmetrical triangles tend to resolve themselves in the direction of the overall trend. There are exceptions, mainly at strong resistance in the case of an uptrend or strong support in the case of a downtrend. This tends to be one of the more difficult patterns for trader's to learn to use successfully.
Example:
Wednesday, 12 October 2011
Sunday, 7 August 2011
U-TURN (Sell)
Like the UTURN
(BUY) signal in a Bear market, U-TURN (SELL) signal is equally powerful to indicate a
change in trend when a stock is going strong and is making new higher prices (in a Bull
market). All of a sudden in a Bull trend the stock puts up a disappointing down day and
surprises most people. Many people think this as just a Reaction and expect the stock to
resume its continued ascending movement soon; but it does not happen most of the time
when the reversal conditions of the U-TURN (SELL) signal are met.
Here are the conditions for the U-TURN (SELL) signal with Bearish implications in a Bull
market. Please note that the signal discussed here takes place when the stock is in a uptrend
(Bull market) but the signal actually indicates that the stock is about to enter into a Bear
market or a down trend.
Key Points to remember: Current Trend- Up. Strong Open. Strong Bear Day. Increase
in Volume.
Conditions:
1. The stock has to be in a continued Up-trend.
http://www.profitfromprices.com Profit 12 From Prices
2. Today’s HIGH price (TDH) has to be highest price (TOP) for the stock in the last few
days. (If it is the highest for the last three or more weeks, we have a strong form of a
U-TURN (SELL) signal. If it is the highest for the last three to ten trading days only,
we have a weak form of U-TURN (SELL) signal. The strong form indicates a likely
trend reversal for the current major trend; and a weak form is related to just the start
of a Reaction or the end of a Correction.).
3. Today’s Open price (TDO) has to be HIGHER than Previous Day’s High price (PDH).
TDO > PDH (The more the difference between TDO and PDH, the more powerful the
signal is going to be)
4. Today’s Close price (TDC) has to be LOWER than Previous Day’s Close price
(PDC).
TDC < PDC
5. Today’s Close price (TDC) has to be LOWER than Previous Day’s Open price
(PDO).
TDC < PDO
6. Today’s Volume has to be decisively HIGHER than the normal volume of the last few
days or Previous Day’s volume. If the above conditions are fulfilled, you will mostly
see a decisive jump in stock volume today. If you don’t see a jump in the volume
today, the signal loses some of its strength.
(BUY) signal in a Bear market, U-TURN (SELL) signal is equally powerful to indicate a
change in trend when a stock is going strong and is making new higher prices (in a Bull
market). All of a sudden in a Bull trend the stock puts up a disappointing down day and
surprises most people. Many people think this as just a Reaction and expect the stock to
resume its continued ascending movement soon; but it does not happen most of the time
when the reversal conditions of the U-TURN (SELL) signal are met.
Here are the conditions for the U-TURN (SELL) signal with Bearish implications in a Bull
market. Please note that the signal discussed here takes place when the stock is in a uptrend
(Bull market) but the signal actually indicates that the stock is about to enter into a Bear
market or a down trend.
Key Points to remember: Current Trend- Up. Strong Open. Strong Bear Day. Increase
in Volume.
Conditions:
1. The stock has to be in a continued Up-trend.
http://www.profitfromprices.com Profit 12 From Prices
2. Today’s HIGH price (TDH) has to be highest price (TOP) for the stock in the last few
days. (If it is the highest for the last three or more weeks, we have a strong form of a
U-TURN (SELL) signal. If it is the highest for the last three to ten trading days only,
we have a weak form of U-TURN (SELL) signal. The strong form indicates a likely
trend reversal for the current major trend; and a weak form is related to just the start
of a Reaction or the end of a Correction.).
3. Today’s Open price (TDO) has to be HIGHER than Previous Day’s High price (PDH).
TDO > PDH (The more the difference between TDO and PDH, the more powerful the
signal is going to be)
4. Today’s Close price (TDC) has to be LOWER than Previous Day’s Close price
(PDC).
TDC < PDC
5. Today’s Close price (TDC) has to be LOWER than Previous Day’s Open price
(PDO).
TDC < PDO
6. Today’s Volume has to be decisively HIGHER than the normal volume of the last few
days or Previous Day’s volume. If the above conditions are fulfilled, you will mostly
see a decisive jump in stock volume today. If you don’t see a jump in the volume
today, the signal loses some of its strength.
U-TURN (Buy)
U-TURN (BUY) is one of my most favorite signals. As mentioned earlier, the (BUY) version of
U-TURN takes place when a stock is in a down-trend and is likely to enter into an up-trend. It
signals possibilities about the start of an up-trend.
Assume a stock is going down for quite some time. The following are quotes for the latest two
days:
Today 22, 27, 21, 26
Yesterday (Previous Day) 25, 26, 23, 24
Yesterday, the stock opened at 25$, touched a high of 26$ and a new recent low of 23$, and
at the end of the day it closed at 24$. Now today, when market opens, this stock opened at
22$ (a price lower than the Previous Day’s Low price of 23$) and started going down. Now
when it is trading as low as 21$, there are signs of fresh buying which pushes the price
higher. Not a big thing so far because this kind of buying could be seen several times during
any trading session. However, when the stock manages to trade higher than today’s Open
price or 22$, we need to be vigilant for a likely trend reversal. Now if the stock keeps going up
and closes for today at say 26$, which is higher than both Previous Day’s Open price of 25$
and the Previous Day’s Close price of 24$, we have a trend reversal signal! The stock that
has been going down for the last few days and also during the first few hours today,
somehow closed with a happy ending and a strong Close price. This reflects a 180-degree
change in the sentiment. Hence we will call this signal a U-TURN (Buy) signal.
What makes U TURN a powerful Trend Reversal signal? As we know, when a stock is in a
downtrend, sellers out-number or out-power buyers. In such circumstances, it is normal for
the stock to keep making lower Low prices as time passes. This reflects bearish, negative
sentiment or outlook for this stock. Now when trading starts for today, this stock opens at a
price lower than Previous Day’s Low price. This is common for any stock that is going down
and it just indicates the continuation of the negative sentiment. Now if at some point in time
during the session, the stock stages a reversal and starts trading higher. This is likely due to
an emergence of fresh demand at current low price of the stock. Now how can we determine
that the stock is really staging a reversal? To answer this question, the following tests can
help us differentiate a strong reversal from a temporary emergence of buying. First, there has
to be a noticeable increase in volume since this turning point. Second, it has to keep going up
and cross Previous Day’s Open and also the Close price. If both these conditions are fulfilled,
we can be sure that the buying in the stock has been real and powerful. To take advantage of
the currently low stock price, some players seem to have started buying it decisively despite
the strong negative sentiment held by most other players. This buying must be significant
because it not only absorbed what most players had to sell/offer, but buyers kept asking for
more stocks even at higher prices. Today’s demand not only absorbed the selling pressure,
but it even pushed the price higher than the prices of the Previous Day! Isn’t this a
convincing reversal in stock prices?
http://www.profitfromprices.com Profit 8 From Prices
This is a complete U-TURN in the stock price trend and now with a Stop-loss at Today’s Low
price, one can start taking long positions.
Key Points to remember: Current Trend- Down. Weak Open. Strong Bull Day.
Increase in Volume.
Conditions:
1. The stock has to be in a continued downtrend.
2. Today’s Low price (TDL) has to be the LOWEST price for the stock over the last few
days. (If it is the lowest for the last few weeks, we are likely to have a strong major
trend reversal signal- a strong form of U-TURN. However if Previous Day’s Low price
is the lowest for only the last three to ten days, we have a signal that is more likely to
mark the beginning of a Correction or the end of a Reaction – a weak form of UTURN).
3. WEAK OPEN: Today’s Open price (TDO) has to be LOWER than Previous Day’s
Low price (PDL).
TDO < PDL (The more the difference between TDO and PDL, the more powerful the
signal is going to be)
4. Today’s Close price (TDC) has to be HIGHER than Previous Day’s Close price
(PDC).
TDC > PDC
5. Today’s Close price (TDC) has to be HIGHER than Previous Day’s Open price
(PDO).
TDC > PDO
6. Today’s Volume has to be decisively HIGHER than the normal volume over the last
few days or Previous Day’s volume. If you don’t see a jump in the volume today, the
signal loses some of its strength.
U-TURN takes place when a stock is in a down-trend and is likely to enter into an up-trend. It
signals possibilities about the start of an up-trend.
Assume a stock is going down for quite some time. The following are quotes for the latest two
days:
Today 22, 27, 21, 26
Yesterday (Previous Day) 25, 26, 23, 24
Yesterday, the stock opened at 25$, touched a high of 26$ and a new recent low of 23$, and
at the end of the day it closed at 24$. Now today, when market opens, this stock opened at
22$ (a price lower than the Previous Day’s Low price of 23$) and started going down. Now
when it is trading as low as 21$, there are signs of fresh buying which pushes the price
higher. Not a big thing so far because this kind of buying could be seen several times during
any trading session. However, when the stock manages to trade higher than today’s Open
price or 22$, we need to be vigilant for a likely trend reversal. Now if the stock keeps going up
and closes for today at say 26$, which is higher than both Previous Day’s Open price of 25$
and the Previous Day’s Close price of 24$, we have a trend reversal signal! The stock that
has been going down for the last few days and also during the first few hours today,
somehow closed with a happy ending and a strong Close price. This reflects a 180-degree
change in the sentiment. Hence we will call this signal a U-TURN (Buy) signal.
What makes U TURN a powerful Trend Reversal signal? As we know, when a stock is in a
downtrend, sellers out-number or out-power buyers. In such circumstances, it is normal for
the stock to keep making lower Low prices as time passes. This reflects bearish, negative
sentiment or outlook for this stock. Now when trading starts for today, this stock opens at a
price lower than Previous Day’s Low price. This is common for any stock that is going down
and it just indicates the continuation of the negative sentiment. Now if at some point in time
during the session, the stock stages a reversal and starts trading higher. This is likely due to
an emergence of fresh demand at current low price of the stock. Now how can we determine
that the stock is really staging a reversal? To answer this question, the following tests can
help us differentiate a strong reversal from a temporary emergence of buying. First, there has
to be a noticeable increase in volume since this turning point. Second, it has to keep going up
and cross Previous Day’s Open and also the Close price. If both these conditions are fulfilled,
we can be sure that the buying in the stock has been real and powerful. To take advantage of
the currently low stock price, some players seem to have started buying it decisively despite
the strong negative sentiment held by most other players. This buying must be significant
because it not only absorbed what most players had to sell/offer, but buyers kept asking for
more stocks even at higher prices. Today’s demand not only absorbed the selling pressure,
but it even pushed the price higher than the prices of the Previous Day! Isn’t this a
convincing reversal in stock prices?
http://www.profitfromprices.com Profit 8 From Prices
This is a complete U-TURN in the stock price trend and now with a Stop-loss at Today’s Low
price, one can start taking long positions.
Key Points to remember: Current Trend- Down. Weak Open. Strong Bull Day.
Increase in Volume.
Conditions:
1. The stock has to be in a continued downtrend.
2. Today’s Low price (TDL) has to be the LOWEST price for the stock over the last few
days. (If it is the lowest for the last few weeks, we are likely to have a strong major
trend reversal signal- a strong form of U-TURN. However if Previous Day’s Low price
is the lowest for only the last three to ten days, we have a signal that is more likely to
mark the beginning of a Correction or the end of a Reaction – a weak form of UTURN).
3. WEAK OPEN: Today’s Open price (TDO) has to be LOWER than Previous Day’s
Low price (PDL).
TDO < PDL (The more the difference between TDO and PDL, the more powerful the
signal is going to be)
4. Today’s Close price (TDC) has to be HIGHER than Previous Day’s Close price
(PDC).
TDC > PDC
5. Today’s Close price (TDC) has to be HIGHER than Previous Day’s Open price
(PDO).
TDC > PDO
6. Today’s Volume has to be decisively HIGHER than the normal volume over the last
few days or Previous Day’s volume. If you don’t see a jump in the volume today, the
signal loses some of its strength.
Wednesday, 20 July 2011
Trading Strategy
This is good trading strategy found in youtube. It is very useful in maximizing profit in uptrend, downtrend and sideway market. Enjoy!
X
Sunday, 10 July 2011
How to Trail a Stop Loss and Maximize the profit
Have you ever come across the situation where after selling a stock, the stock price continue to going up and you certainly regret to selling off too early. I believe most of the stock traders do experience the same situation and the question is how many of them learn from the mistake. Well, I found this clip very useful which is about how to trail a stop loss and this certainly will help to maximize your profit. Enjoy!
Friday, 8 July 2011
Monday, 4 July 2011
The PSYCHOLOGY Behind Candlestick Analysis
Amongst the myriad of techniques available to the trader today,candles are the most immediate and arguably, the most reliable and definitely the most fractal of all systems. I strongly believe in fractal systems when it comes to trading simply because anything too niche or specific tends to fail when the market change its mood. Non fractal systems also fail miserably when applied to other instrument or markets. Such systems need to be tweaked and adjusted constantly to adapt to the market conditions.
In a sideways or volatile market like we have today, indicators and oscillators are unreliable or at best, too slow no matter how fast a setting you program. Already tagged with a negative title of "lagging indicator", in today's market they don't only lag, they drag.
Fractal systems like candle, fibonacci, support and resistance all work in any market condition, rational or irrational and never need tweaking, adjusting or expensive software to run. In fact,they're free.
-They work on any instrument like equities, currencies, futures, bonds, etc
-They work in any time frame whether you're looking at monthly charts, weekly, daily, by minutes and even down to tick chart.
-They work in any economy be it in America, Europe, Asia and the like
Best of all, unlike most other systems, candles actually reveal the psychology behind the chart. They reveal emotions like doubt, commitment, fear, greed, confusion, euphoria, panic, etc. These are emotional indications that oscillators can never factor into their translation. And it is for this reason that candles are preferred.
So, are you ready to learn the candlestick? Here you goFundamental of technical analysis
As you can see, candlestick analysis is quite reliable but it is important to remember that in business of trading and investing, the market is too dynamic for absolutes. As reliable as they are, candles can fail with a little bit of news or macroeconomic influence.
Volumes are crucial factor that determines if your candlestick analysis is reliable. More liquidity makes for better reliability of your candlestick analysis...or any technical analysis for that matter.
Wish all Happy Hunting!
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