Part 1: Which Strike Prices Are The Most Money-Making?

moneymunch options strike priceFigure 1.1

There is tremendous importance in options trading when it comes to strike prices. Traders can reduce the pain of option decay by choosing the right strike price.

In terms of money, there are three kinds of strike prices.
1) ATM – At the Money
2) OTM – Out of the Money
3) ITM – In the MoneyContinue reading

Part 1: How to Count Waves Using Chart Patterns?

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 :Free stockmarket elliottwave chart one

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:
Free nse stock market head&shoulders wave analysis

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) TrianglesFree nse elliottwave triangle calls

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:free nse elliottwave educational tips

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:Free elliottwave educational analysis

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:free nse elliottwave doubletop & bottom 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.

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Part 1: A simple analysis of Wyckoff of Wall Street

wyckoff trading pattern

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.

Wyckoff Price Cycle Pattern Chart

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Contribution of Emotion in Investing

EMOTIONS ARE YOUR WORST ENEMY IN THE STOCK MARKET

Contribution of Emotion in InvestingEmotion plays an important role in many aspects of life. Most of the decision we take depend on our emotional quotient, either directly or indirectly. It is no different in investing. Though it is impossible to keep emotion out of the equation, it is imperative to keep it under control. In fact, the success rate of our buying/selling decision in stock market depends unswervingly on this factor. There are two extremes, between which decision-making swings like a pendulum. Most of us react to these extremes. We are either too excited to calculate the risk involved in buying a particular stock or too depressed to identify the intrinsic value of a stock when it is down. It is always important to take a balanced and an informed decision. Striking the balance is an art. It needs to be practiced over time. There are scores of channels, magazines and hundreds of analysts who often occupy our mind and ride us through different sectors and stocks. It is this ride which takes us to the extremes.

Seldom do we think about who gives them ideas?

How much do they make out of their own recommendations?

What are their intentions?

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Upside Breakout Chart Pattern Rectangle This Completes the List of Courses

This is the 53th Day course in a series of 60-Days called “Technical Analysis Training

You will get daily one series of this Training after 8 o’clock night (Dinner Finished)

Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)

Technical-Analysis-Training

Upside Breakout Chart Pattern 

Rectangle This Completes the List of Courses.

Implication

A Pennant (Bullish) is considered a bullish signal, indicating that the existing uptrend may proceed.

Description

A Pennant (Bullish) observe a steep, or almost straight rise in cost, and consists of two converging trendlines that form a narrow, narrowing flag shape. The Pennant shape usually seems as a horizontal shape, rather than one with a downtrend or uptrend.

Separate from its shape, the Pennant is equivalent in all areas to the Flag. The Pennant is also comparable to the Symmetrical Triangle or Wedge continuation patterns however; the Pennant is typically shorter in duration and flies horizontally.

Upside-Breakout-Chart

Trading Considerations

Inbound Trend

The constant trend is an significant characteristic of the construction. A superficial inbound improvement may indicates a length of combination before the amount move recommended by the construction begins. Look for an inbound trend that is extensive than the duration of the structure. A ideal idea of finger is that the inbound trend should be at least 2 times the duration of the construction

Criteria that Supports

Duration of Trading Range

The duration of the investment range for which the breakout occurred can provide an signal of the energy of the breakout. The extended the duration of the investing variety the more significant the breakout.

Narrowness of Investing Range

The “narrowness” of the trading variety can also be utilized to assess the breakout. To determine the narrowness of the investment range comparison the upper boundary with the lower boundary of the investing range. If the spending range has a small difference between the upper and lower boundary then the breakout is considered stronger and more reliable.

Support or Resistance

Look for a location of assistance or resistance around the ideal price. A place of price collection or a effective preserve and resistance Line at or around the desired cost is a effective indicator that the price will move to that place.

Moving Average

Price which conveniently move 50% earlier the 200-day Moving Average certainly support this construction.

Moving Average Trend

Look at the administration of the Moving typical development. For short duration designs use a 50 day Moving Average, for longer patterns use a 200 day Moving Average. The Moving Average should adjustment way within the duration of the construction and should now be proceeding in the way recommended by the construction.

Volume

A intense quantity enhance on the day of the construction confirmation is a intense signal in preserve of the possibilities for this layout. The amount enhance should be substantially above the typical of the quantity for the duration of the construction.

Criteria that Refutes

Duration of the Trading Range

The duration of the investment range for which the breakout occurred can supply an indicant of the stability of the breakout. The shorter the duration of the investment range the less significant the breakout.

Narrowness of the Trading Range

The “narrowness” of the trading range can also be used to evaluate the breakout. To decide the narrowness of the investing variety analyse the higher border with the lower boundary of the trading range. If the investing range has a large distinction amongst the upper and lower boundary (making it wide) then the breakout is regarded less strong and less dependable.

No Volume Spike on Confirmation

The lack of a amount increase on the day of the structure verification is an indicator that this structure may not be dependable. In improvement, if the amount has continued frequent, or was improving, over the length of the structure, then this structure should be regarded less dependable.

Moving Average Trend

Appearance at the location of the Moving Average development. For short length patterns use a 50 day Moving Average, for longer patterns use a 200 day Moving Average. A Moving Average that is trending in the opposite movement to that suggested by the pattern is an indication that this pattern is less reliable.

Short Inbound Trend

An inbound trend that is significantly shorter than the pattern duration is an indication that this pattern should be considered less reliable.

Technical Analysis Training (60 Days – Comprehensive Course)

Short-Term Chart Patterns (15 -Days)

Short-Term Chart Patterns: (7Days)

• Gap Down Chart Pattern

• Gap Up Chart Pattern

• Gravestone Short-term Chart Pattern

• Hammer Candle Stick Chart Pattern

Hanging Man Short-term Stock Chart Pattern

• Inverted Hammer Stock Chart Pattern

• Shooting Star Candle Stick Pattern

Bearish Short-Term Chart Patterns: (2Days)

• Engulfing Line (Outside Bearish Reversal) Chart Pattern

• Island Top Chart Pattern

Bullish Short-Term Chart Patterns: (6Days)

• Engulfing Line (Bullish) Chart Pattern

• Exhaustion Bar Chart Pattern (Bullish)

Inside Bar Chart Pattern

Island Bottom Chart Pattern

Key Reversal Bar (Bullish) Chart Pattern

• Two Bar Reversal (Bullish) Chart Pattern

Indicators & Oscillators (Total – 11Days)

Bullish or Bearish Indicators: (3Days)

• Double Moving Average Crossover
• Price Crosses Moving Average
• Triple Moving Average Crossover

Bullish or Bearish Oscillators: (9Days)

• Bollinger Bands Oscillator
• Commodity Channel Index (CCI)
• Fast Stochastic Oscillator
• Know Sure Thing (KST) Oscillator
• Momentum Oscillator
• Moving Average Convergence/Divergence (MACD) Oscillator
• Relative Strength Index (RSI)
• Slow Stochastic Oscillator
• Williams %R Oscillator

Classic Chart Patterns (Total -29Days)

Bearish Classic Chart Patterns: (14Days)

• Continuation Diamond (Bearish) Chart Pattern
• Continuation Wedge (Bearish)
• Descending Continuation Triangle Chart Pattern
• Diamond Top Chart Pattern
• Double Top Chart Pattern
• Downside Break Chart Pattern – Rectangle
• Flag Bearish Chart Pattern
• Head and Shoulders Top Chart Pattern
• Megaphone Top Chart Pattern
• Pennant Bearish Chart Pattern
• Rounded Top Chart Pattern
• Symmetrical Continuation Triangle (Bearish)
• Top Triangle/Wedge Chart Pattern
• Triple Top Chart Pattern

Bullish Classic Chart Patterns: (15Days)

• Ascending Continuation Triangle Chart Pattern
• Bottom Triangle Or Wedge Chart Pattern
• Continuation Diamond (Bullish) Chart Pattern
• Continuation Wedge Chart Pattern (Bullish)
• Cup with Handle Bullish Chart Pattern
• Diamond Bottom Chart Pattern
• Double Bottom Chart Pattern
• Flag Bullish Chart Pattern
• Head and Shoulders Bottom Chart Pattern
• Megaphone Bottom Chart Pattern
• Pennant Bullish Chart Pattern
• Round Bottom Chart Pattern
• Symmetrical Continuation Triangle Bullish
• Triple Bottom Chart Pattern
• Upside Breakout Chart Pattern – Rectangle

Education and Extras (4Days)

• Motive (Impulse) Waves

• Corrective Waves
• Bullish Trend Reversals
• Bearish Trend Reversals
• Chart Pattern Statistics

This Completes the List of Courses.

Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.

Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?

Continue reading

Triple Bottom Chart Pattern

This is the 52th Day course in a series of 60-Days called “Technical Analysis Training

You will get daily one series of this Training after 8 o’clock night (Dinner Finished)

Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)

Technical-Analysis-Training

Triple Bottom Chart Pattern

A triple bottom pattern shows 3 different small lows at around the similar amount. The triple bottom is regarded to be a difference of the head and shoulders bottom. Like that pattern, the triple bottom is a reversal pattern.

The only option which distinguishes a triple bottom from a head and shoulders bottom is the lack of a “head” between the two shoulders. The triple bottom shows a downtrend in the procedure of becoming an uptrend. It is, therefore, vital to the validity of the pattern that it commence with prices moving in a downtrend.

Elaine Yager, Director of Technical Analysis at Investec Ernst and Company in New York and a member of Recognia’s Board of Advisors goes further to say that this pattern must commence with prices moving in a major downtrend – one that has lasted for one year or more.

triple_bottom

What does a triple bottom appearance?

As highlighted below, the triple bottom pattern is consisting of three acute lows, all at concerning the same amount stage. Prices come to a assistance level, rise, fall to that help level also, rise, and subsequently fall, reverting to the assistance level for a third time earlier beginning an ascending climb. In their popular triple bottom, the ascending motion in the price marks the starting of an uptrend.

triple_bottom

Traders should note that the 3 lows choose to be sharp. When cost struck the 1st low, suppliers become scarce, assuming prices have fallen too low. If a seller does consent to sell, buyers are easy to buy at a ideal price. Cost then jump back up. The maintain level is developed and the next two lows also are acute and quick. Bulkowski tips out that the acute lows are frequently only one-day climb.

While the 3 lows should be acute and distinct, the highs of the pattern can show up to be curved. The structure is achieve when costs increase about the greatest high in the enhancement. The highest high is called the “confirmation point.”

This pattern, the specialists warn, can be easily baffled with other comparable designs.

Considering the pattern is easy to mistake, an trader should look for 3 acute lows which are actually divided and not objective of a larger obstruction pattern.

Why is this pattern significant?

Like the head and shoulders base which it so directly appears like, the triple bottom is regarded to be a reliable pattern. Bulkowski quotes the troubles speed to be a lower 4%, presuming that an trader delays for the upside breakout through the verification point.

Is amount significant in a triple bottom?

Usually, quantity in a triple bottom seems to development downward as the pattern forms. Amount seems to be ideal on each effective low. Quantity then picks up as rates rise above the verification point and break into the new upward trend.

An investor should not discount a triple bottom if amount does not show this pattern. The structure can take several months to form and, during that time, quantity can be irregular and unpredictable. Amount should be greater at the lows than on the days leading to the lows.

What are the highlights that I should invest interest to in the triple bottom?

1. Period of the Structure

The typical development takes around 4 months to develop. The triple bottom is one of the longer patterns to develop. Schabacker and Murphy agree, however, that the longer the structure takes to form, the greater the significance of the price move once breakout occurs.

2. Require for a Downtrend

The triple bottom is a reversal pattern. This means it is important to the quality of the structure that it start with a downward trend in a stock’s price. As Yager mentioned above, some specialists think the downtrend must be a great one.

3. Definitive Breakout

Considering a triple bottom can be puzzled with many other layouts as it is creating, professionals guide that individuals wait for a valid breakout through the confirmation point before deciding whether the pattern is a true triple bottom.

4. Volume

As mentioned, it is common to see amount minimize as the structure progresses. This should change, however, when breakout happens. A valid breakout should be associated by a burst in volume. Particular experts are less involved by seeing a continuously reducing trend in volume as the pattern progresses through its three lows.

5. Pullback after Breakout

It is very popular in the triple bottom to see a pullback after the breakout. Bulkowski quotes that 70% of triple bottoms will throw back to the breakout price.

How can I exchange this structure?

Begin by computing the target price – the lowest required cost move. The triple bottom is calculate in a way comparable to that for the head and shoulders bottom.

Determine the top of the structure by subtracting the cheapest low from the greatest high in the development. Then, add the height to the highest high. In other words, an trader can assume the price to move upwards at least the distance from the breakout point plus the height of the structure.

Experts accept that triple bottoms are not that popular.

Edwards and Magee, for example, stress the requirement for prepared for a valid breakout through the confirmation point.However, this is a reliable pattern if the pattern has been confirmed by a valid breakout.Pullbacks are common with triple bottoms. Traders can use this to their support suggests Bulkowski. If cost deliver to the verification point quickly after the breakout , Bulkowski suggests that the time to jump in is once the cost have turned around again and headed back up.

Technical Analysis Training (60 Days – Comprehensive Course)

Short-Term Chart Patterns (15 -Days)

Short-Term Chart Patterns: (7Days)

Gap Down Chart Pattern

Gap Up Chart Pattern

Gravestone Short-term Chart Pattern

Hammer Candle Stick Chart Pattern

Hanging Man Short-term Stock Chart Pattern

Inverted Hammer Stock Chart Pattern

Shooting Star Candle Stick Pattern

Bearish Short-Term Chart Patterns: (2Days)

Engulfing Line (Outside Bearish Reversal) Chart Pattern

Island Top Chart Pattern

Bullish Short-Term Chart Patterns: (6Days)

Engulfing Line (Bullish) Chart Pattern

Exhaustion Bar Chart Pattern (Bullish)

Inside Bar Chart Pattern

Island Bottom Chart Pattern

Key Reversal Bar (Bullish) Chart Pattern

Two Bar Reversal (Bullish) Chart Pattern

Indicators & Oscillators (Total – 11Days)

Bullish or Bearish Indicators: (3Days)

• Double Moving Average Crossover
• Price Crosses Moving Average
• Triple Moving Average Crossover

Bullish or Bearish Oscillators: (9Days)

• Bollinger Bands Oscillator
• Commodity Channel Index (CCI)
• Fast Stochastic Oscillator
• Know Sure Thing (KST) Oscillator
• Momentum Oscillator
• Moving Average Convergence/Divergence (MACD) Oscillator
• Relative Strength Index (RSI)
• Slow Stochastic Oscillator
• Williams %R Oscillator

Classic Chart Patterns (Total -29Days)

Bearish Classic Chart Patterns: (14Days)

• Continuation Diamond (Bearish) Chart Pattern
• Continuation Wedge (Bearish)
• Descending Continuation Triangle Chart Pattern
• Diamond Top Chart Pattern
• Double Top Chart Pattern
• Downside Break Chart Pattern – Rectangle
• Flag Bearish Chart Pattern
• Head and Shoulders Top Chart Pattern
• Megaphone Top Chart Pattern
• Pennant Bearish Chart Pattern
• Rounded Top Chart Pattern
• Symmetrical Continuation Triangle (Bearish)
• Top Triangle/Wedge Chart Pattern
• Triple Top Chart Pattern

Bullish Classic Chart Patterns: (15Days)

• Ascending Continuation Triangle Chart Pattern
• Bottom Triangle Or Wedge Chart Pattern
• Continuation Diamond (Bullish) Chart Pattern
• Continuation Wedge Chart Pattern (Bullish)
• Cup with Handle Bullish Chart Pattern
• Diamond Bottom Chart Pattern
• Double Bottom Chart Pattern
• Flag Bullish Chart Pattern
• Head and Shoulders Bottom Chart Pattern
• Megaphone Bottom Chart Pattern
• Pennant Bullish Chart Pattern
• Round Bottom Chart Pattern
• Symmetrical Continuation Triangle Bullish
• Triple Bottom Chart Pattern
• Upside Breakout Chart Pattern – Rectangle

Education and Extras (4Days)

• Motive (Impulse) Waves

• Corrective Waves
• Bullish Trend Reversals
• Bearish Trend Reversals
• Chart Pattern Statistics

This Completes the List of Courses.

Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.

Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?

Continue reading

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