SIP investing is the most popular way of investing in mutual funds. It is suitable for almost all types of investors. Individuals who seek to get equity exposure and want to invest for the long term can choose the SIP mode of investing. Furthermore, SIP helps in averaging out the market volatility when investing across different market cycles. And, when done for the long term, you can benefit from the power of compounding. Picking the right SIP for investment is extremely important. Hence it is necessary to know the Do’s and Don’ts for selecting SIP. Continue reading
We can count waves using traditional patterns like Head and shoulders , Double Top and Bottom, Triangle, cup & handle, etc. This article is about how you can count waves by identifying chart patterns.
I have covered Three chart patterns in this article, 1) Triangles 2) Head and shoulders 3) Double Top and Bottom
1) Head and shoulders :
In addition, the two lows formed when the price failed to rise and fell back down were basically at the same level. The horizontal line is often referred to as the “neckline” When the price fails to fall back for the third time the neckline will break. So “head and shoulders” was officially established.
Changes in volume with head and shoulders: During the formation of “head and shoulders”, the left shoulder has the largest volume , the Head has a slightly smaller volume , and the right shoulder has the smallest volume . The phenomenon of diminishing trading volume shows that when the stock price rises, the chasing force is getting weaker and weaker, and the price has the meaning of rising to the end.
Operation plan after the Head and shoulders appear: When the head and shoulders formed, you can decisively follow up the short order. The formation of the head and shoulders indicates the beginning of a new round of decline in the market, and the minimum drop is the distance from the head to the neckline. The profit is very substantial. Therefore, studying the formation of the Head and Shoulders is also a necessary analysis process for band enthusiasts.
Wave Count:
The left shoulder: wave 3/A. The first touch on the neckline: wave 4/B Head: wave 5/C The second touch on the neckline: wave A/1 The right shoulder: wave B/2 The ending point of the right shoulder: wave C/3
2) Triangles
These are the most commonly used triangle patterns. In this motion, we are going to understand the triangle in terms of the Elliot wave. We’ll be talking about the classical triangle pattern in an upcoming educational series.
Wave Count:
A triangle forms in corrective waves. There are Four corrective waves in Elliott wave theory. The corrective waves are 2,4, B, and X. There are four waves in a triangle which are A, B, C, D, E. The starting point of wave A of the triangle is the ending point of impulsive wave 1/3/A/W. After the completion of wave E of wave 1/3/A/W, the Impulsive wave will initiate.
3) Double Top/Bottom:
In the chart, you can sometimes see the stock price fluctuations. The stock price fell back after reaching the highest price. After some sorting, it rose again to near the previous stock price level and then fell back. Two “normally highs” The high point is formed on the circuit diagram and will not be seen again in the short term.
Wave Count:
In a Bull market, The first Top of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave. I started the wave count from the first top and labeled it as A, B, and C waves.
In a Bear Market, The first bottom of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave. I started the wave count from the first bottom and labeled it as A, B, and C waves. After wave C is complete, we can ride the impulsive waves.
I am starting this topic with a simple question, Are you finding consistent profit in your trading? If yes, then you can skip this article, and congratulations!
Now, Let’s discuss talk about the rest of the traders. Indeed, most traders don’t find profits consistently instead end up losing their money. It does not matter which market they trade.
There can be many reasons for not getting consistent profits. Like, it can be risk management, trading system. It can also be trading psychology.
But the truth is, you are trapped! Ladies and gentlemen, I am showing you the numerous powerful psychological trap ever.
The Cycle of Doom
The cycle of doom involves three phases.
Phase 1: The search
Phase 2: The action
Phase 3: The blame
To become a successful trader, however, you will have to get out of the cycle of doom. How can you destroy the cycle of doom? First of all, you have to understand the cycle.
You need to understand what is going on! So you can identify and move beyond the Cycle of Doom in the world of consistently profitable trading.
Wyckoff was a pioneer in the technical analysis of the stock market in the early 20th century. He established the Stock Market Academy in 1930. The main course is to introduce how to identify the dealer’s process of collecting chips and the process of distributing chips/judge. Second and third, in the basic law of “causality”, the horizontal P&F count within the trading range represents the cause, and the subsequent price changes represent the result.
Fourth, fifth, the relationship between price and volume on the candlestick chart to analyze the relationship between supply and demand. This law sounds simple, but it takes a long time to practice in order to accurately grasp the volume and price. I heard that Wall Street financial institutions are using Wyckoff’s trading method to judge the trend of the stock market and look for opportunities. So what exactly is Wyckoff’s theory? Today, I will introduce to you the famous Wyckoff transaction method.
The background of the birth of Wyckoff theory
Wyckoff’s theory was proposed by Richard Wyckoff. He was a pioneer in the technical analysis of the stock market in the early 20th century. He and Dow Jones, Gunn, Elliott, and Merrill Lynch are considered the five giants of technical analysis.
Wyckoff is good at summarizing his years of failures in stock investment, and is committed to introducing individual investors to the rules of the game in the market and the impact of large funds behind them.
In 1930, he established the Stock Market Academy. The main course is to introduce how to identify the dealer’s process of collecting chips and the process of distributing chips. Till, there are still many professional traders and institutional investors applying Wyckoff’s method.
Two Five Steps of Wyckoff Analysis
(1) Determine the current state of the market and possible future trends. Judging the current market trends and future trends can help us decide whether to enter the market and go long or short.
(2) Choose stocks that are consistent with market trends. In an uptrend, choose stocks that are trending stronger than the market. In a downtrend, choose stocks that are weaker than the market.
(3) Choose stocks whose “reason” equals or exceeds your minimum target. An important part of Wyckoff’s trading selection and management is his unique method of using long-term and short-term trading point forecasts to determine price targets.
In Wyckoff’s basic law of “causality”, the horizontal P&F count within the trading range represents the cause, and subsequent price changes represent the result.
(4) Make sure that the stock is ready to move.
(5) When the stock market index reverses, there must be contingency measures Three-quarters of the stocks are moving in line with the market. Grasping the market trends can increase the success rate of transactions.
You need to have a certain quality and have the right mentality to become an expert in stock trading. You not only need to overcome nature-to learn about stock trading, but you also need to overcome yourself-to overcome innate psychological obstacles such as deep-rooted fear, hope and greed, and gradually develop the right attitude.
So, what is the right mindset to improve stock trading?Follow these five steps to win:
You can earn Money in trading is made from finding an important trend of market. Losing Money in trading happens by missing or staying on the incorrect side of trends. Therefore, the Real Question is how do we guard and maintain our trading capital … herein one of parts which is called ‘Consolidation market’ OR “Choppy market”
Meaning of ‘Consolidation’ OR “Choppy”
Simply, Consolidation is known as trade in range which not crossing or breaking range. The fluctuations of an stock’s price inside a clear pattern or boundary of trading levels, called as ‘Consolidation OR Choppy’ In technical analysis. Choppy level of stock price is commonly known as a period of unpredictable , which ends when the price of the stock cracks the limited boundaries. Periods of Choppy market are known in charts covering when time interval.
Lots of traders are making more money whenever his or her setups happen, then again give their profits made into losses whenever the market runs towards CONSOLIDATION OR CHOPPY secessions, aren’t they?
Now, if you find Choppy secession of market, this information will keep you in Profit and you became one of Profitable Traders.
Yup, Choppy markets chop up your profits. Occasionally understanding whenever do not to trade is really as worthwhile as knowing whenever to trade.
Understanding your trading plans and trade and whenever to trade is your “offense.” Understanding whenever do not to take your trading plan is your “defense.”
To winnings at the trading game, one need both a Good offense and a Good defense.
[sws_pullquote_left]But, simply as notable, it also shows you how to predict the end of choppy conditions and the beginning of new trends … therefore getting you early into new megatrends! [/sws_pullquote_left]
As I properly describe it, this one is likely to be the best you can change to create trading strategy for the coming major opportunities in stock market. Lots of traders study about a trading technique by reading a book or purchasing a trading system, …
Can you be sure if the technique will really work for you. Do you jump right in to the market with real rupees and start trading away?
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Some traders perform, and that is an costly way to learn that a system is not for you. Initially, let’s review various of the key data tips that can be collected and calculated in the back test process.
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SIP investing is the most popular way of investing in mutual funds. It is suitable for almost all types of investors. Individuals who seek to get equity exposure and want to invest for the long term can choose the SIP mode of investing. Furthermore, SIP helps in averaging out the market volatility when investing across different market cycles. And, when done for the long term, you can benefit from the power of compounding. Picking the right SIP for investment is extremely important. Hence it is necessary to know the Do’s and Don’ts for selecting SIP.
