Technical Analysis Masterclass

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Trend Analysis

Stage 1 is the consolidation phase. Stage 2 is the uptrend phase. Stage 3 is also the consolidation phase. Stage 4 is the downtrend phase.

When the market moves sideways it is called accumulation phase.

Positive diversions on the momentum indicators and break outs of reversal pattern.

When euphoria enters the market, it is a signal for reversals.

Stage 1 - cash Stage 2 - Long Stage 3 - cash Stage 4 - Short

Time Frames and Trading Perspectives

Setting up a time frame means time period during which the price data is accumulated for one candle.

From the candle you can get Open, High, Low and Close.

You can be Intra day trader, Scalper, Swing Trader, positional Trader or Long Term Investor.

In intermediate Position Trading, you hold the stock from few weeks to few months. In short Term Position Trading, you hold no more than a month. In swing Trading you hold for three to seven days and long term position trading you can hold from months to years.

For day trading, look at 15 minute chart. For scalping, your chart should be a five minute chart. For position trading, you should look at daily chart, in which our trading perspective is for few weeks to few months.

How to Read the Current Trend

Try to read Apple stock chart with a weekly option. Look back period for long term trading should be 7 to 8 years.

The look back period for positional trading should be 2 to 4 years.

Intra day trading should be in 15 minute charts.

Knowing the trend is important and as beinginner trade in the direction of the trend.

Short Selling

Short selling is a process of selling a stock that you do not own. You borrow the security from your broker and sell it. You have to buy the stock back at a later date and return it to your broker.

When you enter into a short sell trade, you will need to deposit a margin amount which is simply a percentage of the contract value and that margin is called initial margin.

Depending upon the broker, maintence margin is the minimum amount you have to maintain at all times.

Futures can be sold only in lots.

• Buy and exit for buy trade.

• Sell and exit for sell trade.

Trend Lines

When the direction changes the movement in the trend can be analyzed with the help of trend lines. Trend line is the most important tool of technical analysis.

On the price charts while joining all the lows in the uptrend and all the peaks in the downtrend we get a trend line.

We join the lows in the uptrend and the peaks in the downtrend to get a trend.

trend line confirms the trend and we can make maximum profit by trading in that particular direction. It is very risky to trade in opposite direction and we have to suffer loss most of the time.

If you want to trade in counter trade direction, first we should learn complete technical analysis and know about all the tools and indicators.

So this is a confirm uptrend as it is an uptrend we will buy every time when we get a point on the trend line but we will not sell here because it is very risky, it is a counter trend direction.

Trend line tells us where the retracement or profit booking should stop and when the price will run again in its trend.

By doing this the maximum part of profit will be in our possession without keeping our time and money invested in the consolidation phase.

It is only trend line which tells us that trend is changing.

Whenever price crosses the trend line it indicates the beginning of the new trend but its not necessary that the new trend is always a reversal, it can be a continuation can be a reversal or it can be a sideways trend.

Prices retrace upto the trend line and they cross down the trend line then the new trend we get a new trend line that is also an uptrend line.

This is a breakout when Prices are crossing down the trend line.

Once a breakout is witnessed the prices tend to come back touch the trend line but failed to go back to its previous trend and we get a new trend.

They are moving in the confined range between a resistance and support line and they are in a sideways trend.

How to Draw Accurate Trend Lines

In an uptrend trend line moves in upward direction and in a downtrend, trend line moves in downward direction.

A trend line acts as a support in up trend and resistance in down trend.

In an up trend, if a trend line has a positive slope. It means that net demand is increasing with prices more and more Buyers are participating in the trend.

A break below the trend line shows the weakness of net demand and weakness of buying pressure.

Similarly if a trend line has a negative slope prices decline with increase supply and the selling pressure is also increasing.

A break above the downtrend line shows that demand is more than supply and it can be a starting of uptrend.

As long as prices remain above the trend line we should focus on buy positions only and as long as the prices remain below the trend line.

We should focus on Sell positions only so it is very important to draw accurate trend line.

To draw a long term trend line Often we see a large change in prices.

So it is very confusing at that time to draw a smooth trend line.

So we should always draw a trend line on a log scale setting.

In an arithmetic scale The prices are displayed evenly as they move on Y-axis but on a log scale it was set the log scale prices are displayed in percentage

For example a move from $20 to $40 is $20 Gain and it is a 100% Gain. But a move from $100 to $120 is also a 20$ Gain but it is only a 20% Gain.

Therefore a move from 20 to 40 should appear much larger than a move from 100 to 120. Therefore if you apply the log scale instead of arithmetic scale we get a clear and smooth trend line.

The prices are grouped in a range.

Now in this situation we can ignore the spikes this is spikes so we can ignore the spike and we can draw a trend line here by choosing the first one point this is the first one point so we will choose this point not this point and we will ignore the spike of this point.

How to Draw Accurate Trend Lines Continued

Positional trading prospective are charts should be daily chart. These are daily chart of Apple incorporation and we will draw trend line on this chart.

So for position rating perspective, our look back period should be 2 to 4 years. And in this timeframe you can see.

Now, one more thing I want to suggest to you that first of all, you should change the color of these candles.

And you can see this was the current retracement, this was the current correction.

And at this trendline line, there was consolidation.

Prices were taking support on this trend line.

And then we have seen a sharp up move in the prices from this point.

There was a gap of opening on this trend line.

Now for drawing a trend line, I always suggest to draw trend line on logarithmic setting.

So this is y axis.

If we right click on this y axis, then we will see this panel.

Initially, the chart will be at regular setting, so we will change the settings from regular to logarithmic.

So on logarithmic setting, this is our chart and I have drawn the trend line for this uptrend.

And here, after taking support on this trend line, we have seen an up move in the prices. Now this was our main trend line, but to get trading signals, we can also draw internal trend line for this trend.

Now see, this is the daily chart of Vedanta Ltd and if we see the previous action and our look back period should be 2 to 4 years. So you can see. This was a prayer. And then after this point, prices are going in a downward direction. So the current trend for the stock is downtrend. So we will draw a trend line for this downtrend.

Then you can see this was the first swing. This was the second swing and this is the third swing. So first point was this swing. And the highest point of this swing was this.

And there was a sideways trend, but prices were not able to go in upside.

And again, prices breached this trend line and downside and there was a sharp fall in the prices below this downtrend line.

So in this way, we can draw trend line on different charts for the current trend.

Let’s take one more example.

There were five points on this internal trend line, and then there was a pullback rally.

There was a cluster of candles. So here I have joined the line touching the wicks of all these candles.

We can draw different trend lines on different trading perspective for different trends. Trend line is very useful to know about the current trend, and with the help of other indicators, we can get our confirmed signal if we know about our current trend and our current trend line.

Basic Terms of Technical Analysis

Trading View Platform

You can draw trend line and you can use Fibonaccci tool.

You can use indicators and the stock screener so you can analyze your chart here but your data will not save on this chart on my website.

• candlestick chart.

• line chart.

• Heikin-Ashi chart.

• Fibonacci retracement

• The support and resistance zone.

• head and shoulder pattern.

• XABCD pattern.

• harmonic patterns like bad pattern, crab pattern and butterfly pattern.

• cypher pattern.

• RSI indicator

• Exponential moving average.

• Simple moving average.

Support and Resistance

Support and resistance is the basic tool of technical analysis and tells us about the range of the stock within a particular time frame.

When particular level is respected many times by price it becomes a support level.

And when price of a stock fail to cross a particular level many times becomes a resistance level.

By observing carefully on chart we can easily find out support and resistance level.

When demand is strong enough to prevent the price from declining further that level becomes the support level.

• Moving averages and price channel are the example of Dynamic support and resistance levels.

• In this chart you can see this is the fibonacci tool and prices are taking support on this 61.8% level.

• Moving average is an example of Dynamics support and resistance level.

• In bull trend moving average is acting as a support line you can see every time prices touch the support line and then go back in the bull trend.

Demand and Supply

The fundamental bases of technical analysis is that prices move with demand and supply.

The level at which the demand is strong enough prevent the price from decling further is known as support level and the level at which a sufficient supply is available to stop the prices to increase is known as resistance level.

It is very common that support and resistance are often thought of as absolute price level. But in reality support and resistance levels are not exact prices but rather price zones.

The clue for determining how much the prices are tested by is how quickly or slowly prices move into that resistance or support zone.

Volumes

Volume is the number of shares that changed hands during a specified time span. Volume is a variable term that is totally independent of price.

Volume measures the enthusiasm of buyers and sellers so analyzing volume gives us a better understanding of how and why prices move in a direction. Volume is shown as bars and if we get a long bar as compared to the average bar it means that that the relative volume is high on that day due to some unusual buying and selling.

In stock market There is a buyer for every seller and there is a seller for every buyer.

See this red candle is showing us that on this day there is a huge buying and selling but all the people are buying the stock because stock is rising.

Smart investors always buy or sell in millions.

So a huge volume is seen at the extremes of the uptrend and downtrend.

volume also affect support and resistance levels.

If a stock is at resistance level and volume increases at the break out the stock may continue to rise.

Candlestick Chart

Welcome back everyone.

In this lecture we will learn about candlestick patterns as we know that investors psychologically do enforces greatly influenced the stock prices and the all our market psychology can be tracked through candlestick analysis candlesticks were discovered in Japan and they are the most efficient ways to do stock trading.

So let’s understand some powerful kind of stick pattern in this lecture.

There are basically two types of candlesticks green and red colored candlesticks a green candlestick indicates opening price of the session being below the closing price and a red candlestick shows the opening price of the session being above the closing price.

So in a green candlestick This is open and this is close.

Close is always above the opening price and in a red candlestick opening price is always above the closing price.

So this is the opening price.

And this is the closing price.

See this is the real body and these thin lines are the shadows.

These are also called wicks of the candle and these shadows indicate the high and the low of the session.

So in this green candlestick this was opening price and this is closing price.

This is upper shadow.

This is lower shadow and this is a high of the candle.

And this is the low of the candle.

In a red candlestick This is opening price.

This is closing price.

This is lower shadow and this is upper shadow.

This is the high of the candle and this is the low of the candle.

We can also change the colors of these candlesticks but the most basic colors are green and red.

Green color is for bullish candle and red color is for bearish candle.

So for every candle here we are getting the data of that candle.

Suppose I’m choosing this candle.

So this is the red candle This is opening price.

This is closing price because in a red candle closing price is always below the opening price.

And these are the shadows.

This is upper wick and this is lower wick.

So this is the high of this candle and this is the low of this candle Now if we choose this candle.

This is a green candle.

It means open is below the close.

This is opening price.

And this is closing price.

This is the low of this candle.

And this is the high of this candle All these four parameters are shown here.

You can see this is opening O and this is high H This is low L And this is close C So if I want to get the data of this candle.

All the four levels for this candle have been displayed here.

Now let’s choose one minute chart.

Now see This is the current candle.

We will study the next candle and see the next candle is green.

It means this is the opening price and currently the candle is green.

Now currently this is the high of this candle and now we have another candle.

So for this candle this was opening price.

And this was the low of this candle And this was high of this candle and prices closed at this level for this candle now for next candle this is the opening price.

And this was low of this candle and this is high.

And we will see where we will get the closing price.

And based on that closing price we will get this candle as green candle or red colored candle.

OK.

The close was above the opening price.

So this candle is a green colored candle and it is a bullish candle.OK now see in this candle.

This was the opening price and the opening price is the high of this candle.

And this is the low of this candle We will see where it will close now see this is a dozy bar.

We will learn later about this candle This is a dozy candle in which this is the opening price and the closing price is also the same.

And this is the low of the candle High is also the same.

So in this candle you can see see the data for this candle here opening price is 204.6 0.

High is also 204.60 low is 204.45 and close is also the same.

204.60 So in this candle opening price high and close are same and low is this.

So in this way we can get the data for each candle Now in this lecture we will learn about some important candle that gives a signal about the future movement of the prices.

First is hanging man pattern.

This is the Hanging Man candle and this is a long candle in which we have a long shadow and a small real body at the top.

The body is small enough and the wick or the shadow will be almost twice the body.

There is a possibility you may find a very small Wick at the top of the body but there should be very long wick on the bottom.

Now if this candle is found in a downtrend then it is called a hammer candle And if it is found in an uptrend then you can see this is uptrend and in an uptrend.

We have found this candle.

Then this is called a Hanging Man candle.

See this is downtrend And if we get this candle in a downtrend then this is called Hammer pattern the candle is same It means we should get a real body at the top and the shadow should be at least twice the real body In downtrend It is called a hammer candle because it hammers out the bottom.

The color of the body is not much important but if we get a green colored candle in a downtrend then it is more important one.

And if we get a red colored candle in an uptrend then it has a lot of importance for us.

Now both these candles are the reversal candle it means if we get this candle in an uptrend then it is a hanging man candle and this candle gives a signal about reversal or the correction in the prices so we can assume that prices will go in downward direction.

And if you get this candle in a downtrend we can assume that prices will bounce back and we can see an up move in the prices.

Now in a hammer pattern the next candles clause should be above the close of this candle And it gives the confirmation about the pullback and in a hanging man pattern.

The close of this candle should be below the close of this candle Now let’s understand the pattern psychology here.

The market is in downtrend and sentiments are bearish price is open and start to trade lower but market returns here to the high of the candle.

And it shows that bulls have stepped in they start bringing the price towards the top.

Thus the resulting candle will have a small real body and a long wick.

Here bears couldn’t maintain the control and the confirmation would be a higher close on the next candle Now the Hanging Man candle here prices were in uptrend.

So we should get higher open and higher close but when we get this candle it means that buyers are stepping in and bringing the price near the low of the candle.

It shows that the demand has been pushing the prices higher.

But there was a significant selling during this candle formation.

The next candle confirms the downtrend.

If it closes below the close of this candle now for this candle there should be a support level near this candle that confirms our position and there should be resistance Level near this candle that confirms about the correction in the prices.

Now see prices were in downtrend and this is the support level and at this support level.

Here we are getting hammered Candle and the next candle is the green one.

Its close is above the close of this candle that gives us a confirmation about the up move in the prices and you can see after this candle here we are getting an upmove in the prices and this is a sharp up in the prices.

Now see in this example this is a hanging man candle prices were in uptrend and this is one point six one eight.

Fibonacci level that is acting as a resistance level about Fibonacci tool that you will learn later in the course but here this level is acting as resistance level so near this resistance level we are getting a Hanging Man candle and the close of the next candle is below the close of this candle so with this pattern we are getting signal about the correction in the prices and you can see after this candle here we are getting a correction in the prices.

In this case we can employ the stop loss level slightly above this resistance level and in Hammer candle we can place our stop loss slightly below the support level and see in this case the low of this candle is below the support level.

So in this case we will place our stop loss below the low of this candle.

Shooting star now the next candle is shooting star.

That is a very strong candle reversal candle.

And this candle is similar to the previous two candle But in this candle the real body will be at bottom and the shadow will be in upside.

See this is small real body and this is a upper Shadow shooting star is exactly opposite of a hammer or a hanging man candle In some cases it can also have a small wick at the bottom as well.

But the upper shadow should be at least two times the length of this real body.

This candle if found in an uptrend and near the resistance level then we can expect a trend reversal from uptrend or downtrend Obviously the color of candle is not significant but the next candle close should be below the close of this candle And if we have a green candle before the shooting star candle then it has a lot of significance.

So this is a shooting star pattern and now we will see this pattern on the chart see here prices are in uptrend.

And this is an important Fibonacci level that is acting as a resistance level for the prices.

And at this resistance level we are getting a shooting star pattern.Here the color of this candle is green.

That is not significant but the candle is a shooting star candle.

And the previous candle is green one.

We have a gap up opening and the close of the next candle is below the close of this candle.

So this is a shooting star pattern and we can expect a reversal in the prices when we get this pattern and we can place our stop loss slightly above the high of this candle now again in this chart prices were in uptrend.

And this was the resistance level.

From this Fibonacci grid and near this resistance level you can see we are getting a shooting star candle in this case the candle is red and after this candle there is a correction in the prices and prices are going in downward direction.

Here is one more example.

Prices are in uptrend.

And this is the resistance level near this resistance level we are getting a green colored shooting star.

The previous candle is green color and the close of the next candle is below the close of this candle So this is a shooting star pattern and it is giving us a signal about the correction in the prices.

And after this candle prizes are going in downward direction.

Now you can see after this pattern we are also getting a hanging man pattern.

See this is a hanging man candle because we are getting this candle in an uptrend after an uptrend.

If we get this candle then it is called Hanging Man pattern and so here we are getting two candles.

This is shooting star and this is a hanging man candle and these two candles gives a signal about the correction in the prices.

And after this upmove there is a sharp reversal in the prices.

In this chart You can see this is a hammer candle because we are getting this candle in an downtrend, prices are in downtrend and then we are getting this candle the close of next candle is above the close of this candle and after this candle prices are going in upward direction next candle is doji candle Doji is a candle with the same open and closed price.

It is also a significant reversal candle if found near support and resistance level.

See In this candle this is the opening price and the closing price is also the same.

This is the high and this is the low though opening and closing price of doji are same But in some cases they are very near see in this candle The opening and closing price are very near.

And in this case also the opening price is above the closing price but they are very near to each other.

But doji candle represent indecision this candle reflects a balance between the buying and selling forces and signals that bulls will not maintain the uptrend because buyers are stepping in.

So the uptrend can change into a downtrend.

Similarly a doji found in a strong downtrend near a support level signals about the trend reversal aSee here prices are in a strong downtrend and this is a support level So at this level we are getting a doji candle that signals about the indecision among the buyers and you can see a pullback in the prices.

See here in this chart this was the resistance level for the prices here and near this resistance level We are getting our doji candle.

That gives a signal about the correction and at the same level here we are getting a shooting star candle That is also giving us a signal about the correction and we can see there is a correction in the prices then after reaching this level in upside.

This level is acting as a support level and at this support level We are getting a doji candle that gives us a signal about the reversal in the pricesand after this downtrend Here we are getting an uptrend in the prices.

Now two important variations of doji are gravestone doji and Dragonfly doji.

Dragonfly doji is a candlestick in which open high and close are same with a long lower shadow.

This is a bullish reversal candle and gives a signal like a hammer candle gravestone dojii is a candle in which open high and close are same with the long upper shadow.

This candle is similar to the shooting star candle and signals about the reversal from an uptrend toward downtrend.

See in this chart this is the resistance level and near this resistance level.

We are getting two gravestone doji and it looks like a shooting star candle and it gives signals about the downtrend from uptrend.

Here Prices are in an uptrend and after these two candles we can see a correction in the prices here also you can see prices are in uptrend and then here we are getting a doji candle and after this candle You can see a correction in the prices then at the low of this correction we are getting a hammer candle that is giving us a signal about the pullback and after this correction prices are going in an upward direction now let’s see this is dragonfly doji and this is the support level at this support level we are getting our Dragonfly doji and prices are in a correction phase.

So this candle is giving us a signal about the upmove in the prices and after this candle there is an upmove in the prices you can place the stop loss slightly below the support level or at the low of this candle.

Also this is the support level you can see at this support level we are getting our doji candle then after this candle prices are going in upward direction so all these candles are the reversal candles and if we get these candles near support and resistance level we can get a signal about the future direction next is Marubozu candle now all previous candles were the reversal candles but the Marubozu candle is not a reversal candle It is a momentum candle Marubozu candles are the candles which have long real body and no wick or no shadow.

You can see in this candle there is no upper or lower shadow.

This is open and this is also the low of the candle And this is the close of the candle and there is also the high of the candle Similarly in a bearish candle This is open and this is also the high.

And this is close.

And this is also the low of this candle So in these candles we don’t get any wick And in some cases we can get a very small wick But the major part of the candle should have a long real body.

Of green colored Marubozu shows strong bullishness and a red colored Marubozu shows strong bearishness Now green Marubozu shows that bull are in full control and very confident and a red colored Marubozu shows buyers are in full control and they are very confident a bullish Marubozu indicates that buying pressure is so high that buyers are willing to buy the stock at every price and prices close near the high of the session so we can expect that bullish sentiments can continue over the next few trading sessions.

And it is a buying opportunity.

You’ll see in this example.

The stock was making a head and shoulders pattern that is a bearish reversal pattern and then we are getting a red colored Marubozu That is a long red candle and wicks are very small in this case.

But this is a momentum candle and you can expect a further down move in the prices after this candle volume should be high at these candles and you can see volume is very high at this candle Again in this case you can see prices are in downtrend and this was a support level prices are taking support at this level.

But suddenly we are getting a Marubozu candle breaching this support level and downside and this is our momentum candle so we can expect a further down move in the prices after this candle See in this case prices were in uptrend and after this correction we are getting a green Marubozu candle.

That is a bullish candle volume is high at this candle.

That is giving us a signal about the further up move in the prices and see buying momentum is so high that we can see a sharp up moving in the prices here in this case also.

This is a support level and near support level We are getting our Marubozu candle that is giving us a signal about the father up move in the prices.

And after this candle we are getting a very sharp up move in the prices you’ll see in this chart here.

We are getting a red Marubozu candle and after this candle prices are going in downward direction.

And this is a green Marubozu candle at each green Marubozu candle We are getting a bullish momentum and after this candle prices are going in upward direction.

Now sometimes we get this candle Marubozu candle near the support or resistance level at the end of the move see prices were in uptrend.

And near this level this is the resistance level we are getting a red Marubozu candle the previous candle is hanging man candle that is a reversal candle and this candle is engulfing this candle.

It means the open and close of this candle is above the open of this candle and below the close of this candle this candle is totally engulfing this previous candle then this candle gives us a signal about the pullback in the prices.

So this pattern is known as engulfing pattern and as the candle is bearish candle.

So this pattern is known as bearish engulfing pattern So when we get this candle near support or resistance level after sharp upmove or sharp down move then we can expect a pullback in the prices.

Here is one more example of bearish engulfing pattern.

See this is the resistance level and near this resistance level we are getting a red Marubozu candle and this candle is engulfing the previous candle.

This is a long red candle.

So after this candle we are getting a reversal in the prices.

Now in this chart this is the support level.

Prices are taking support here and then we get a green Marubozu candle that is totally engulfing the previous candle the previous candle is red colored candle.

So this candle is giving us a signal of an up move and after this candle we can see an up move in the prices.

And as the previous trend was downtrend it was a correction in the prices.

So this pattern is bullish engulfing pattern and gives us a signal about the uptrend after the downtrend So these were some most important candlestick pattern.

There are so many other patterns also but these patterns are the most powerful candlesticks and tells about the market psychology.

But we shouldn’t trust these patterns until they are very near to support or resistance level And until you don’t get same signals with other indicators as well so we should also add other indicators with candlestick.

When we get these candles near support and resistance level.

And with this setup we can get different trading signals for our entry and exit positions.

Heikin Ashi Candlestick Chart

Now we will learn one more chatting style that is hewkin ashi charting style among All charts candlesticks Chart is the best and fastest way to understand the conditions of the market And the psychological Situation of the market But heikin ashi chart that came after Candlestick chart is one of the several different Achievements Of the Japanese Traders Because Heikin Ashi charts Even are easier than candlestick To understand heikin ashi can be translated as Average pace And it is sort of an indicator that makes the price chart to look smoother

Skip those False signals By using Heikin Ashi chart.

Heikin Ashi charts Look like the candlesticks chart but method of calculations and ploting of the candlesticks.

by using some tool or indicator we can draw a trend line We can use RSI moving average or Mac D

3D Candlestick Chart

3D charting the most interesting concept of trading the reason why most people fail in trading with the help of charts and indicators is they fail to know and understand the concept of multiple time frame and they are trying to trade a stock based on signals received on single time frame that is very dangerous so always monitor the charts in three dimensions.

Now the question is What is 3D charting and how to trade in three dimension charts So what 3D charting first use the holding period of your trades and charts that relates your trading perspective.

For example if you are a day trader your chart should be a 15 minute chart And if you are a positional trader your chart should be daily chart.

And if you are an investor your chart should be weekly chart now find one segment above and one segment below the time frame of your chart.

For example if you are an intraday trader your focus should be on 15 minute chart but you should also watch 5 minute chart and 60 minute chart here 15 minute chart is center of focus and 60 minute chart is used to check major support and resistance levels and five minute chart is used to find low risk entry points.

For positional trader we will use one hour chart daily chart and weekly chart.

Our focus should be on daily chart but weekly chart will tell us the major support and resistance level and one hour chart will tell us our entry point.

For long term positional trading We will focus on weekly chart but also watch monthly and daily charts monthly chart will tell us resistance and support levels.

That is our buying and selling limits.

In this way 3D charting is very important in trading.

Now we will understand the concept of 3D charting by an example.

This is the chart of Infosys and we will analyze the chart on weekly time frame First of all on weekly time frame we will draw trend line for this stock because this is the middle timeframe chart.

We will know about the trend and draw trend line for this chart.

This is the uptrend line then we will choose monthly chart That is the higher time frame chart We will mark all the support and resistance levels on this chart.

This is our first resistance level touching 3 peaks 1, 2 and 3 and this is our support level and we will draw one more resistance level Currently this level is acting as a support level Now these are the support and resistance level on monthly time frame chart.

Now we’ll select daily time frame to know our entry and exit points.

On daily time frame chart you can see prices are inbound and taking support on trend line.

We will draw one more internal treandline This was our first point.

This is second point.

Currently prices are taking support on trend line so you can go along in this stock because this is the support level for the prices.

If prices breach these level in upside we can see and up move in the prices.

Now we will analyze one more stock that is ICICI Bank.

This is the daily chart of ICICI Bank and on daily chart we will draw our trend line for the stock.

Our view is positional trading so for position trading our chart will be daily chart.

We will draw trend line on this chart to know about the current trend and this is the uptrend line for the stock We’ll draw one more trend line for the stock to know about the range of this stock.

So this is the upward trend line for the stock and we can expect that stock will move in this range.

Now we will shift to weekly time frame that is the high time frame chart for short term prospective and we will draw all the support and resistance levels on this chart.

So this is our first resistance level and this is our second resistance level.

This is our support level now we will go to hourly timeframe chart That is a lower timeframe chart for positional trading on hourly time frame chart.

We will know about our entry point now see prices are taking support on trend line so this was the support level then this was the first point this was second point and every time when prices are taking support on trend line we can go along in this stock now currently you can see prices are trading near the upper resistance line from the higher time frame chart So we will not make any fresh entry in this stock we will wait for the prices to retrace upto the extent of trend line then we will make a fresh entry in this stock currently it is very risky to make any fresh entry in this stock because prices are trading near the resistance level and near the upper level of the range.

So in this stock we will not make any long position here.

We will wait for the retracement and when prices will touch its trend line.

We then make our fresh entry for the long position for positional trading perspective.

So in this way 3D charting help us to know about support and resistance levels and they also helps us to know about our entry and exit position.

Support and Resistance Levels

Welcome to our next lecture.

Now in this lecture, we will draw support and resistance levels on a chart and understand how to draw support and resistance levels.

First of all, we will choose our 3D charting with respect to our trading perspective.

And then we shall draw support and resistance level on the higher timeframe chart.

so for position trading perspective, our 3D charting is weekly daily and hourly so we will try to draw support and resistance level on the weekly chart of EURUSD.

To draw a support or resistance level, We should draw a level that is near to our current position.

So we will try to draw a level near our current position.

we will choose horizontal line from here and we will see the lows and the highs of the swings that are close to our current position.

Now you can see near our current position, These are the highs and lows of the swing so we will draw a support or resistance line joining the lows or the highs of these swings.

Near our current position, This is the low of this swing and then this is the low of this swing.

we should draw a horizontal line joining the maximum lows and highs.

So if we draw a line from the low of this swing then that line is also touching the low of this swing.

And then here also, this line is touching the low of this swing.

And here you can see this line is touching the highs of these two swings.

So this is our confirmed support or the resistance level and currently, you can see prices are taking support on this level.

The line has been drawn on weekly chart.

If we see the price action on daily chart on daily chart, we can adjust our line because on the daily chart, we can clearly see the wicks of all these lows and highs.

So here this was our line because this is the low of this swing and this line is touching the lows of other swings also.

So this is our support level and prices are taking support on this level and consolidating at this level.

So in this way we can draw our support level or the resistance level.

Now if we want to draw a resistance level, here you can see there are so many swings lows.

So if we draw a trend line joining the low of this swing.

This is our horizontal line.

This line is also touching the law on this swing and then again this line is touching the law of this swing.

So this is a support line but when prices breached this line in downside there was an up move in the prices.

And you can see prices were resisting this line.

Now this support line became a resistance line and prices resisted this line here and then there was a downfall in the prices up to this support line.

Now to draw a support or resistance level we should get at least two touches on this line.

But if we get more taps on this line then you can consider that level as the strong level.

Now for the current price action if you want to draw the next support level.

See this was the swing low.

If we want to draw a line from this low then you can see here this is the low of this swing.

And this is the low of this swing but these lows are not touching this line.

That’s why we will adjust this line joining the lows of these swings because the lows of these swings is very close to our previous point.

We will draw one more horizontal line touching the low of this swing in this way.

Now here we are not getting any single support level but here we are getting a support zone because these two lines are very close to each other and you can see after this point there was a fall in the prices and prices breached this level in downside.

But after breaching this zone in downside prices were taking support on the upper level of this support zone so currently prices are here.

If prices go in a downward direction then we can expect that prices will take support on this support zone.

So for the current price action, this is our support zone and this is our resistance level.

Let’s take one more example.

See this is weekly chart of Reliance Industries.

The stock was an uptrend.

And here you can see there was a sideways range after this sideways range, If we want to draw the support and resistance level for this sideways range then we will choose our horizontal line and you can see if we draw a horizontal line joining the peaks of these swings.

See there are so many swings here in a sideways range so we will draw a horizontal line joining the highs of these things and you can see here also there was an up move up to this resistance line.

This line is acting as our resistance line here.

Again prices are resisting this line.

And then there was a green momentum candle.

see this breach candle, It was a long green candle that is also a momentum candle And after this candle, this was the starting of the uptrend.

I have drawn the uptrend line for this uptrend and there was a sharp fall in the prices and after this sharp fall if we see on a daily chart see prices were going in upward direction.

And this is the uptrend line for this up move and prices were resisting this trend line.

See there is a shooting star candle near this trend line.

Now this trend line is acting as a resistance level.

And if we want to draw horizontal resistance level we will draw a level joining the peaks of these swings.

You can see this shooting star candle, the high of this up move is touching the resistance level.

There was an up move in the prices exactly up to this resistance level.

So this is our confirmed resistance level and this level is also acting as a resistance Level with this trend line.

So there were two resistance level.

That’s why here we are getting our shooting star candle and there was a retracement in the prices.

But as long as prices are trading above this trend line we can expect that prices are in an uptrend.

But as this is a strong resistance level In fact we can see that this is a strong resistance zone, So we can expect that prices may consolidate here and we should get a breakout of this resistance zone in upside for a further up move in the prices.

Our next support level will be this level because this line is joining the highs of these swings.

So this is our next support level.

And then this will be our next support level below this level.

So these are all resistance and the support level for this stock on daily time frame chart for the perspective of positional trading.

So in this way we can draw different support and resistance levels or the resistance and support zones if we get two levels that are very close to each other then we can call that zone as the support or the resistance zone.

But here you can see these levels are not very close to each other.

That’s why we will not consider it as a support zone.

We will consider these levels as different support levels But suppose here we are drawing one more level joining the highs of these swings and here also prices are taking support so these levels are very close to each other.

That’s why we can consider it as a support zone in this case.

So here this is our support zone, this is our resistance level and this is our next support level for the prices on this chart.

Thanks for watching, see in the next lecture.

How to choose stocks

A lot of students often ask me that there are more than 4000 stocks.

So how to choose the stock for trading? should I analyze each and every stock? No, we cannot analyze the chart of each stock.

In this lecture We will learn how to choose the good stocks for trading and investment.

First of all I suggest you do divide your capital in five equal parts and invest in different sectors.

For example pharma sector, I.T.

sector, banking sector sector etc.

for long term perspective in which we invest our money for more than two to three years we should choose the stocks that are fundamentally strong and then analyze the 3-D charting of those stocks.

If the stock is in long term uptrend and fundamentally strong and it is taking support on 200 EMA or its trend line you can buy that stock.

For example, Bank of baroda is a very good stock and its fundamentals are strong.

So when it was in uptrend and every time when it was taking support on its trend line it was a very good opportunity to buy the stock but currently it is in downtrend.

So we have to wait for the trend reversal.

For short term perspective, I would always suggest to invest in blue chip stocks because they are highly liquid stocks and usually follow a trend so we can easily analyze the chart of these stocks and make trading decisions.

Blue chip stocks are the stocks that have their market cap in billions so we can scan These stocks.

Here on trading platform We have an option to scan the stocks.

This is stocks screener And if we click on this option we will get the stock screener and here This is column option we can save our screener here and in this tab we can scan for the stocks for different parameters for blue chip stocks, We should scan the stocks that have market cap in billions.

So this is the column of market cap.

If we scan the stocks from 200 billion to more than 2000 billion.

Then we get only 264 stocks that have their market cap more than 200 billion.

We will also scan for the 90 day average volume more than 500 K.

Now we have only 130 matches that have these parameters.

so in all these stocks we can trade for short term perspective because they have very clear chart.

For example if we click on the first chart, reliance industries see the stock is moving in an uptrend and it is moving in an uptrend by making different swings.

So within these swings we can trade the stock by applying short term strategies that I have given in my second course, ‘Stock trading strategies’ and applying those strategies we can trade the stock for short term perspective.

The second is TCS and see the chart of TCS is also very clear and it is moving in an uptrend.

Currently it is in retracement phase so every time when it was taking support on its trend line, we could go long in the stock.

Similarly The next stock is in Hindustan LVR and the chart of this stock is also very good.

So on hourly chart we can trade this stock for the short term perspective.

But for this your basics should be strong and you should know the strategies that I have explained in my second course.

For options trading, We want those stocks which have their derivatives so you can trade in NIFTY 50 stocks because they are highly liquid stocks and have very clear chart.

So we can adopt different option strategies in these stocks.

It doesn’t matters whether we are buying or selling options.

For day trading, We want the stocks that is highly volatile so that it can move up and down in a single day and we can get an opportunity to go long as well as to make short position during intraday.

There are so many settings in the screener with respect to eech strategy of day trading that I have explained in my ‘Day trading course’ but that is an advanced level course.

So first practice my basic course then only enroll in that course If you want to be a day trader.

So with this easy to follow procedure, we can choose stocks to invest in stock market.

I hope you are enjoying the course so stay tuned.

Technical Indicators

The study of Technical Analysis is done with the help of various indicators which are important technical tools helps us to know the momentum, trend, volatility and range of market or a stock.

There are many indicators in market that serve different purposes but we will focus on the popular ones.

But before using these indicators make sure that with a few selected indicators we are able to do a proper study of technical analysis because so many indicators using simultaneously can confuse us in taking accurate decision.

We should use a selected set of indicators in combination so that we initiate a clear position or trade .

There is no one indicator that is suited to all market conditions.

Indicators are very useful to predict the future trend.

To alert before the reversal and to conform the trend.

Most indicators are categorized into two groups leading indicators and lagging indicators.

Leading indicators generally lead the prices means prices follow the moment of such indicators.

The main benefit of these indicators is to get signals of early entry and exit.

Lagging indicators are also known as trend following indicators.

They are more suitable in trending market and not effective in sideways market.

The main benefit of lagging indicators is the ability to catch a move and remain in a move.

But the drawback of lagging indicators is that they signals late.

Both leading and lagging indicators perform different functions.

Some indicators are used to know momentum, some indicate trend.

And there are indicators that can shows us the strength of the trend and some indicators can help us to get trend reversal signals.

So knowing the use of technical indicators is very important to get success in technical analysis.

In the upcoming modules we will know and learn about these technical indicators that is lagging indicators and leading indicators.

Lagging Indicators

That present the trend of the market or a stock from history.

Moving Average

In this lecture we learn about moving average That is a lagging indicator.

Moving average is a trend following indicator and is used to know changes in trend.

A moving average is a way of calculating the average price in a given time frame.

Moving Averages are used in a trending market.

They are ineffective in ranging market.

So use this indicator only when the stock is trending.

Moving average helps us to know about price trend but they don’t tell us top or the bottom.

moving averages should be used on their own But we should use moving averages in conjunction with other indicators.

The disadvantage of moving averages is that they are trend following or lagging indicator.

They signals late but the advantages completely outshines the disadvantages.

Moving average can be simple moving average that comes by averaging the price of the stock in a time span.

in order to reduce the lag in simple moving average technique, we use exponential moving average.

we use the exponential moving average because exponential moving average reacts quicker to recent price changes.

simple moving averages are used when the time frame are big.

For example if we are using weekly chart or the monthly chart then we should use simple moving average.

But if we are using small time frames for example hourly chart or the 15 minute chart then we should use the explanation moving average popular moving average is the 200 day moving average.

It is said that the bulls live above 200 day moving average and bears live below 200 day moving average so moving average also tells us about the resistance and the support zone.

Above 200 day moving average.

the trend is bullish and below 200 day moving average.

the trend is bearish.

You can see in this chart 200 day moving average is acting as suburb level a dynamic Support level because prices are trading above this moving average and whenever prices touches this moving average.

we can say that prices are taking support on this moving average and when prices are in downtrend This 200 period moving average is acting as a resistance level dynamic resistance level.

For long term Investor 200 Day Moving Average, 100 moving average and 50 day moving average are useful for positional trader who can hold their trade for a few days or months can use 50 period, 21 period period and 14 period moving average.

And for trading purpose, for intraday trading a lesser parameter can be used either we can use the set or 14, 7 and 3EMA.

Or we can use the set of 20,10,and 5 moving average.

You can use moving average crossovers to know exit and entry signal when lesser day moving average crosses above the greater value moving average buy signal is generated and when lesser day moving average or fast moving average crosses down a greater value moving average sell signal is generated.

The most important thing is to remember is that don’t use moving averages in choppy market when there is a great noise.

use them only when the market is in trend either in uptrend or in downtrend.

always check monthly and weekly charts first to get bigger picture now we will learn how to use moving average crossovers in trading.

Now see this is the hourly chart of Invesco and in this chart we will see the signals for positional trading prospecting.In lecture 3D charting, you have already learned about the trading perspectives and the respective charts, so for positional trading our chart should be hourly chart on which we will get the trading signals so on hourly chart that is the lower time frame chart of our 3D charting we will use the moving average set and for position trading, our moving average set will be 21,14 and 50 So I have applied three moving averages to this chart and you can see here the stock is in uptrend and this is the uptrend line of the stock I have applied the moving ever set for positional trading and see this blue line is the 50 period moving average and I have also applied twenty one and fourteen period moving average.

so when prices were taking support here on trend line it means you can expect a further up move in the prices.

So here you can see this blue line is 50 period moving average.

the greater value moving average will act as a resistance or the support level.

So in this set, 50 period moving average will act as support level as prices are in uptrend so here as long as prices are above 50 period moving average it means the trend is bullish and we can get the trading signals with the rest two moving averages that is 14 EMA and 21 EMA see here when 14EMA is crossing above the 21EMA, it means it is a buying signal and both moving averages are above 50 period moving average, So here we can make our buy position and here when 14EMA is crossing below the twenty one period moving average we are getting an exit signal similarly here both these moving averages are above the 50 period moving average it means trend is bullish so we can make our buying position here.

and here 14 period moving average is crossing below the twenty one period moving average it means it is an exit signal, we can exit here.

Now you can see here this is the uptrend line for the stock and here prices are crossing below the uptrend line it means it can be a starting of a downtrend and you can also see that twenty one and 14 period moving average are below the 50 period moving average now in downtrend 50 period moving average is acting as a resistance level you can see this is a resistance level a dynamic resistance level.

so as long as both these moving averages are below the 50 period moving average we can make use of short sell signals.

so here 14 period moving average is going below the twenty one period moving average so we can make a short sell position here and when 14 period moving average is crossing above twenty one period moving average, we will exit here.

WE will cover our short sell position here.

Now currently in this portion, this is the current portion and here 14 period moving average is crossing above the 21 period moving average so it can be our buying signal.

and still it is a buying signal.

Both the moving averages are above the 50 period moving average.

So if somebody has entered in a long position at this candle, he can hold his long position as long as 14 period moving average crosses below the twenty one period moving average.

So in this way with the help of moving averages we can get very clear signals and moving average is the most important indicator that traders use.

I always use this indicator in conjunction with other indicators.

as this is a lagging indicator, It gives signals late.

That’s why we should also use some leading indicator with this set to get to confirmed signals.

Now this was about the lagging indicators.

Now in the next sections we’ll learn about some leading indicators.

Thanks for watching! See you in the next lecture.

• Moving Average

• Exponential Moving Average

MACD

And that is called moving average convergence divergence indicator.

It is a trend following indicator and pronounced as MACD .

MACD uses two moving averages 12 EMA and 26 EMA and MACD is calculated by subtracting 26 EMA from 12 EMA MACD also acts as a momentum oscillator.

Thus it is very helpful indicator to know about trend as well as momentum.

The two moving averages that are used in the calculation of MACD are slow moving average and fast moving average.

The default settings in the software are twelve, twenty six and nine.

The settings can be change depending on time horizon you want to trade but I always suggest to use default settings.

So this is the MACD indicator.

The blue line is the fast line that is MACD and the orange line is the signal line.

This is histogram.

These green bars and the red bars above and below are the histogram and this is 0 line.

This is the center line and MACD oscillators above and below this central line when MACD crosses above zero line then we can assume that the trend is uptrend and sentiments are bullish and when MACD crosses below zero line then we can assume that the sentiments are bearish and trend will change into our downtrend so you can see here when MACD is crossing above zero line and prices are going in upward direction and here when MACD is crossing below zero line the central line there is a decline in the prices.

Now we will learn how to use MACD for our buying and exit position First of all we should find out the trend for a stock or index whatever you are trading on middle time frame chart For example I’m using the chart of gold and for commodities i always prefer to use 4h chart for positional trading and the middle time frame chart is daily chart for position perspective.

So on daily chart we should find out the current trend and for gold you can see this was uptrend then prices were going in downward direction Again prices are in uptrend.

And here prices are in uptrend.

So we will see in this portion how to use MACD indicator to get our trading signals on lower time frame chart So in this case I will choose 4h chart And lets start from here.

When this blue line That is a MACD line crosses above this signal line and they are above 0 line the central line.

We get a buying signal.

So at this candle we are getting a buying signal.

And when these two lines are converging you can see at this point both the line starts converging and histogram is also falling down.

That is an exit signal.

So this was our buying signal and at this candle We are getting an exit signal.

Now similarly here again we are getting a bullish crossover of both the lines and these two lines are diverging So we are getting a buying signal histogram is also going upward.

So at this candle we are getting a buying signal in the stock and see at this point both the lines are converging.

So we are getting an exit signal at this red candle.

Now see here these both the lines are giving us a bearish crossover because this blue line is below Orange Line.

It is a bearish crossover.

But as the trend is uptrend prices are trading above uptrend line and these both the lines are a above center line.

So we will not make any short sell position here because it is very risky to trade in opposite direction.

But if you know the stock trading strategies that I will discuss in my next course and get conformed signal with other indicators or divergence then you can go short and opposite direction also.

But if you are a beginner then I would not suggest you to go for counter trend trade.

Now see again prices are going near the trend line and MACD is giving a bullish crossover.

Both the lines are diverging and histogram is also rising up.

So at this green candle we are getting a buying signal.

We can make a buying position here and here both the lines are converging that is showing that momentum buying momentum is low and also histogram is falling down.

You can see the color of histogram is changing here.

It is of dark green color and now the color of the bars is light green.

So we can exit here at this red candle.

Now see here at this point we are getting a bearish crossover.

Now some people say that you can trade every signal in MACD indicator when you get a bullish crossover you can buy and when you get a bearish crossover you can sell the stock.

But here you can see we are getting a bearish crossover.

But still prices are going in upward direction.

So if prices are in uptrend I would never suggest to go short if MACD is above zero level But you can make a short sell position when these both the lines going below zero level.

Like here see this is a bearish crossover and MACD is going below the center line.

You can see this is a bearish crossover for both the moving averages and histogram is also going below the center line.

These are the red bars So this is the retracement phase in uptrend.

This is not a confirmation of downtrend but we can assume that prices are in retracement phase and we can make a short sell position because both the lines are going below zero line at this candle at this red candle we can make our short sell position but here both the lines are converging.

So we will exit from our short sell position.

This is our short sell point and this is our exit point.

Again here at this candle we are getting a bullish crossover.

And prices are in uptrend because prices are trading above this trend line uptrend line so we can make our entry at the bullish crossover at this candle and when both these line starts converging we can exit from our long position.

So here at this candle at this red candle we are getting an exit signal.

This is our buying point and this is our exit point.

Now see here.

This was the uptrend line.

And here prices are going below uptrend line so we can assume that this is the starting of our downtrend and as MACD is also going below zero line histogram is already giving a sell signal because all the bars are red So as soon as prices are going below this uptrend line we can enter in our short sell position both the lines are diverging at this candle and here both the lines starts converging at this green bar.

So we can exit from our short sell position here.

This was our entry point and this was our exit point.

So in this way we can make use of MACD indicator to get buying and selling signal.

But as MACD is a trend following indicator MACD don’t give accurate signal in our ringing market it gives accurate signal in our trending market and always trade in the direction of the trend.

In this chart The trend was uptrend.

So we are getting very good buying signals with MACD indicator.

This was our buying point and after this signal you can see very fast up move here in the chart in the prices.

And again this was a buying signal with MACD indicator.

And you can see the momentum is very high in the buying side now when prices are below trend line this was the cell signal and we can go short here and see after this signal there was a sharp decline in the prices.

But we should never trade based on only one indicator.

We should add three or four indicators simultaneously and get the confirmed signal with the help of all indicators.

Oscillators

RSI

• RSI

RSI is a momentum oscillator that measures the speed and change of price movements.

RSI is a popular and widely used indicator.

RSI is a price following indicator And as the name indicates it measures the relative strength of the stock.

Most analysts use RSI amongst another set of indicators they used and it is one of my favorite indicators.

RSI oscillates between zero and 100 level.

Its important level are 70, 60, 50,40 and 30.

14 day RSI is a popular one.

It is mainly used for checking momentum and over sold over bought range.

Here one important thing to remember is that use of RSI in ranging market is different and in trending market is different.

So before analyzing a chart based on RSI first we must get clarity on the trend in place of whether the market is in range or not.

If we make mistake in doing this we will make mistake in interpreting that particular indicator.

RSI is used to know over bought and over sold levels that emerge in short time cycle of a long term trending market.

When RSI is above 70 levels the stock is considered over bought and when RSI is below 30 levels the stock is considered as oversold.

RSI tells us whether the stock is up trending or trending down.

When RSI remains above 50 the stock show overall bullish trend.

And when RSI means below 50 the stock is in bearish trend.

RSI helps us to take early entry and exit by showing diversion signal that happened between RSI and price.

When RSI after going below 30 levels manages to give a positive break out above 30 level.

One can initiate a buy position.

And when RSI breaks below 70 after retracing from above 70 levels one should exit from a trade.

RSI is used to know momentum though not primarily designed for it RSI can indicate increase in momentum in trending market by remaining above or below certain levels for longer period.

In ranging market when RSI goes below 30 and takes support at 30 It gives an opportunity to buy.

But in trending market one must not make haste and try to buy the bottoms.

As RSI can remain below 30 level for a long period.

In this situation we do not get chance to exit on rise and we can get stuck in a position for a long time.

We must never buy or sell based on illusion that the stock is available cheap.

When RSI remains below 30 bottoms can be established at a lot lower level than our expectation.

Now will take an example and understand how RSI helps us in trading.

This is the hourly chart of NIFTY and here are so many up trends and down trends.

This is up trend.

We are getting a trend line here.

Now see RSI is in over sold range.

and now it rises above 30 level.

Now it crosses above 50 level.

This is a confirmation signal we will buy here we will make our buy position here.

This is our buying position.

Now RSI is going to over bought range.

This is the over bought range and this is the over sold range.

Below 30 is over sold and below 70 is over bought range.

RSI is going in over bought range and when RSI crosses down the 70 level then we will exit from our buying position.

We will buy here and exit here again when RSI is crossing above 50 level this is the 50 level.

We will buy our position we will buy here and RSI now in is in over bought range and crosses down in 70 level.

So we will exit here.

We will buy here and exit here.

Similarly this is the down trend an RSI is taking support as at 70 level it is not going in over bought range because now it is a starting of a down trend, short term down trend.

At this level RSI is going below 50 level so we can make our short sell position here.

We can sell here.

Now RSI is in over sold range and after coming in over sold range RSI is going above 30 level.

So we will exit here.

We will sell here and exit here.

In ranging market when RSI crosses 70 or faces resistance near 70 or 60 we can sell.

And when RSI crosses down 30 or take support near 30 or 40 we can buy.

But in trending markets when RSI crosses above 70 its like a car going into the fifth gear.

The momentum at this time is strong and once side sharp move can be seen.

As long as RSI doesn’t go below 70 and faces resistance of 70.

Again we can keep long it is advised that RSI crosses above 30 we should wait for the confirmation signal that we get when RSI is above 50.

Now there market is moving in a range between two lines this is the resistance line this is the support line.

So we can make use of RSI here when prices are touching 70 level they are going in over bought range and now facing resistance 70 level many times we can sell here.

And now RSI is going in over sold range and now again facing this level second time so we can buy here.

This will be our buying position.

Again RSI is going at 70 level and facing resistance three times here.

You can see facing resistance three times.

So we can sell here.

So every time when we get a resistance near 70 we can sell at every time when we get support at 30 we can buy.

This was the case when market was in sideways trend.

But now market is in trend this is a trending market bull trend And RSI is in over bought range.

Here RSI is in over bought range for long time because the momentum is high here.

So we will not make any short sell position when RSI is in over bought range because this is a bull trend market.

RSI is a very useful tool but like other indicators RSI is also prone to providing false signals.

So price analysis is still needed with the use of RSI.

Stochastic

Stochastic oscillator is a momentum indicator used to find out support and resistance.

Stochastic is also used to know over bought and over sold levels of a stock or index.

This Stochastic Oscillator is displayed as two lines that is K line and D line.

We will see this in chart this is stochastic oscillator and if we set the settings then see this is the K line and D line.

D line is a moving average of k line.

The indicator oscillates between 0 and 100, 0 line and hundreds so it oscillates between 0 and 100.

But the important levels to look out is 20 level this 20 level and 80 levels and above 75 there is a 80 level.

So, the important levels are 20 and 80 we will set the settings and see the colors of this K line is 14 and D line is 3.

This is default setting K line is of blue color and D line is of orange color.

You can see here in settings when K line crosses above D line This blue line crosses above this orange line.

Orange line is D line as we have seen and this blue line is the K line.

When this blue line crosses above D line and they crosses this 20 line crosses above this 20 line then this is a buy signal.

And also we can buy when oscillator falls below 20 it falls below 20 and then rises above 20.

This is the signal of buying.

When K line crosses below D line.

Look at here.

When K line this blue line crosses below D line this orange line and they crosses down this 80 line.

The is the 80 line crosses down this 80 line then a sell signal is generated.

This is a signal of selling.

Stochastic above 80 above this line 80 line this pink zone is considered as over bought.

This is a over bought range and Stochastic below this 20 line is considered as over sold range.

This is a over sold range.

And this is a overbought range.

When stochastic forms a narrow bottom It means the weakness of bears.

This is the bottom and we can see this is the stock of Infosys and in this chart stock is moving in up trend.

This is the up trend.

Now see at stochastic This is the bottom and these are the tops so when stock makes narrow bottom and broad tops than this is the weakness of bears and bulls are strong here and in the down trend just see this is the down trend tops are very narrow but the bottom is broad.

This is the bottom.

So is the weakness of bulls and bears are stronger.

In this way Stochastic tell us about the bearish and bullish trend now you’ll see how to use stochastic for trading.

Just see here.

One thing that is very important to know it is that it accurately measures the short term shift in price momentum.

This is the short term chart as you can see this is the one hourly chart and it measures accurately in this chart but fails completely in strong trending market.

If we set the chart as one day market it fails completely in that trend.

In longer time frame but in shorter time frame it accurately gives us the results.

Stochastic and RSI are similar nature.

So you can use one of the indicators if you used both in combination than it is not a fruitful thing.

It is better to stick to one indicator each of different nature and avoid use of more indicators of similar nature.

That gives similar signals either use RSI or stochastic.

Now just see how to use stochastic see here.

This is the over sold range and this blue line is above this orange line and this is moving above this 20 line.

So you can buy here and just see this is the candle when we will buy.

Now stochastic is moving in over sold range and now see here this blue line is below this orange line and the both are moving below 80 level.

This is the 80 level.

So we will sell here this is red candle where we will sell, so we buy here and we sell here.

Again this is a over sold range and this blue line is now above the orange line.

We will buy here we will initiate our position here.

And Stochastic giving us a signal when the blue line is below this orange line and they are crossing below this 80 level.

So we will sell at this candle.

Buy here and sell here.

Again stochastic is in over sold range and this blue line is above this orange line and they’re crossing above this 20 line we will buy here but see in this case this is the 50 line So OK one thing more I want to tell you that about 50 if these moving averages this K line and D line is above 50 then the stock is in bullish mode and below 50 it is in bearish mode.

So in this case when this blue line is above this orange line and they’re crossing above 20 we will initiate our position but from 50 level it is not going to over bought range and come back from 50 level.

So we will sell here at 50 level again we will buy when this blue line is above orange line but this time we will buy when this crosses the 50 line.

Crosses above this 50 line we will buy here and see this is a candle when we will again buy.

In this way you can see stochastic gives us a accurate results in not in trending market but it’s when the market is in range.

See this is the portion when market is in range.

This is the price of a stock that is 967 and the low the support line is 922.

So the stock is moving in this range 967 to 922.

So in this portion this is the ranging market and stochastic gives us very accurate results.

If we draw the resistance line and support line there’s a resistance line and now we will draw a support line, this is the support line you can see.

So the stock is moving in this range that is the upper limit and lower limit.

Now see we will buy here and this is first candle we will buy here and touching the support line and sell here this is the candle when we will settle this is candle touching this resistance line.

Again this is the over sold range and we get signal here.

So we will buy here this we will buy at this candle.

You can see this is the candle this is the last candle that is in the downtrend and from this candle up trend is starting.

See we will buy with this candle and it is giving signals here of selling at this candle.

See this is a candle.

This is the last one candle that is touching the resistance line.

So we will sell here again when stochastic is in over sold range and giving signals here so we will buy here.

You can see this is the last candle of downside.

• Stochastics

Leading Indicators

Leading indicators are those indicators which are used to predict the future trend.

Divergence

That is a very important concept and observe between price and indicator.

With the help of divergence, one can get early signal to exit the trade.

Whenever such divergence signals are seen, one can take position.

Combining other indicators, we can find divergence between price and indicator.

When there is a divergence between price and other indicators such as RSI, MACD, stochastic, we get the signal of trend reversal.

Divergence can be positive or negative.

A positive divergence is also known as bullish divergence and a negative divergence is also known as bearish divergence.

If we are able to spot such divergence at different stages of bull and bear market, we can make a good percentage gain in short.

But there is some risk involved in this because after a divergence, the trend reversal could take some time.

So we must have patience and confirm our position.

Only then we should enter or exit in our trade.

So let’s understand what is divergence and how to spot divergence in an uptrend or downtrend.

If prices make lower lows, prices are going in a downward direction, but indicator fails to do so.

And if indicator goes an upward direction, then it is known as a positive divergence or a bullish divergence.

They get the signal from indicator because prices are going down, but indicator is going in upward direction.

So indicator is giving us a bullish signal and it is known as bullish divergence.

So here we get a signal of uptrend.

Similarly, if prices make higher highs and go in a poor direction but indicator goes in downward direction, then it is known as negative divergence or the bearish divergence.

This is a signal of retracement in the prices or a trend reversal in downward direction.

Let’s understand it on the price chart.

See, this is the daily chart of pretty light industries and you can see the stock is going in upward direction in this channel.

So if our view is for positional trading, we will see the divergence on hourly timeframe chart.

That is our trading chart for positional trading perspective we have discussed in 3D charting lecture.

So here you can see prices are moving in this channel and prices are very near to the upper level of this channel.

This is the resistance level and near this resistance level you can see prices are making higher highs.

But if we see the peaks of RSI, we see RSI peaks are going in downward direction.

This peak and this peak are going in downward direction.

If we join these peaks, the line is going in downward direction.

But if we join these peaks in chart, in price chart, then we can see the line is going in upward direction.

So this is our divergence because both the lines are going apart from each other and this is known as bearish divergence because the line in RSI is going in downward direction and it is giving a signal of downtrend and we can expect that near this resistance level, prices will go in downward direction and we can see a retracement in the prices.

So with the help of this divergence signal here we are getting an early signal of this retracement.

So with the help of this signal here, we can exit from our long position.

With the help of divergence, we can also enter in a trade in the opposite direction, and we can also trade this retracement phase.

But that is slightly risky and we should confirm our position that I have explained in Masterclass two calls.

With the help of some techniques, we can also make our short sell position here and we can make profit in this retracement phase also.

But mainly we use the divergence concept to get early signal to exit the position.

So in an uptrend here we are getting an early signal to exit the trade from our long position.

Similarly in a downtrend, we get the signal to exit our short position.

You can see this is the chart of Indus Bank and the stock is in downtrend.

This was the support level.

Prices breached the support level.

There was little consolidation near the support level, but prices were not able to go in upside.

So it was a signal to go short in this stock because here we are getting a signal in this chart that prices will go in downward direction.

But after making a short position, you can see prices are going in downward direction, but RSI is going in upward direction in a downtrend.

We see the troughs.

We see the lows of RSI in an uptrend.

We were analysing the peaks of RSI, but in downtrend we will see the lows of RSI, or we can also see the troughs of RSI.

So they are going in upward direction, but prices are going in downward direction.

So this is a divergence, this is a positive divergence.

Or we can see this is a bullish divergence because indicator is giving us a bullish signal.

So here, if we short the stock here, then RSI is giving us a signal to exit our short position because we can expect a pullback in the prices.

And after this candle you can see there was an up move in the prices up to this level.

The support level is now acting as a strong resistance level and prices are touching this resistance level.

So with the help of divergence, we got an early signal to exit our short position in the stock.

Similarly here you can see prices are again going in downward direction.

There was a fall in the downward direction.

You can see prices are going in a downward direction.

But if we see the lows of RSI, RSI troughs are going an upward direction.

So this is also a positive divergence here.

We are getting an early signal to exit the short position and you can see after this point, prices are going in a poor direction.

There was a pullback in the prices.

So in this way, divergence is very helpful to get early signal to exit the trade, how to enter in a fresh position with the help of divergence that we will learn in next course.

Multiclass too.

But here I’m explaining the concept what is divergence and how to support the divergence on price chart and with the help of indicator here I’m using the RSI indicator, but we can also get these signals on MACD or the stochastic.

For example, you can see this is the chart of Euro USD and in this chart here, prices are going in a downward direction, but RSI is troughs are going in upward direction.

So this is a case of bullish divergence.

And here we are getting a signal of pullback in the prices.

And you can see MACD is also giving us a bullish divergence.

Stochastic is also giving us a bullish divergence because all the three indicators are going in upward direction so we can get the signal from any indicator.

But I prefer to use RSI because with the help of RSI, we can also get signal to enter in a fresh position to trade this pullback.

And here you can see.

This is a bearish divergence.

Prices are going in upward direction, but also peaks are going in downward direction, maybe is also going in downward direction and stochastic is also going in downward direction.

So indicators are giving us a signal of retracement in the prices.

And you can see after this point there was a retracement in the prices.

One thing I want to mention here that we should notice the divergence.

Only one indicator is trading in overbought or the oversold range here.

If prices are giving us a divergence in this area, when RSI is trading in this headed position because it is neither an overbought range or oversold range, then we will not consider any signal of divergence.

And that is not a valid divergence.

So we should see the signal.

One indicator is trading either in overbought range or the oversold range in an uptrend.

RSI should trade above 70 level in overbought range.

See, all the peaks of RSI are trading in overbought range, so the first peak must trade in overbought range.

Then we should find out the divergence signal with the help of RSI and in our bearish divergence RSI falls trough should trade in oversold range below 30 level.

Then we should find out the signal of positive divergence and that will be a valid divergence.

So divergence is a very important concept and I always use this concept while I trade the stock and this is my favorite indicator because this is a leading indicator.

RSI is an oscillator, but with the help of RSI here we are getting hourly signals.

That’s why it is also called the leading indicator.

But there are so many types of divergence also like failing divergence, multiple divergence, simple divergence that all we will learn in Masterclass two and how to find out the trading signals with the help of these concepts, where should you adopt the Stop-Loss level? What should be your target level? When we get a divergence signal on the chart that all you will learn in the next course? So this was the explanation of divergence and I hope you are enjoying the course.

Bollinger Bands

Now, in this lecture, we learn about one more indicator that is Bollinger Band.

Bollinger band is commonly used indicator discovered by John Bollinger in 1980s.

It is a powerful indicator and it can be used for all types of trading.

One in Japan is a volatility indicator, and the purpose of Bollinger band is to provide a relative definition of high and low.

It consists of three bands in center.

There is a simple moving average that is 20 period moving average, and on both the sides there are bands of standard deviation lines.

They provide us relative boundaries of highs and lows.

The default settings for simple moving errors.

That is the middle band of Japan is 20.

Period.

It means this is a 20 period simple moving average and the upper band is placed to standard deviation above the 20 period moving average and the lower band is placed to standard deviation below the 20 period moving average.

Of course you are allowed to use any inputs that you like, but I suggest default settings.

There are so many users of polling Japan and the first use of Bollinger band is they indicate high and low volatility.

The expansion and contraction on band indicates the volatility of the prices of that particular stock.

When banks are expanded, it means there is a huge volatility and we can see a sharp up move or a sharp down move in the prices.

And when banks are close together, volatility is lower.

In a real market, the banks become very narrow.

You can see here the banks are very narrow and the volatility of prices is very low.

Prices are sideways and they are range bound.

But when there is an expansion in Bollinger band, after this narrow range, you can see prices are going in uptrend and there is a sharp up move in the prices.

So whenever prices move sideways and Bollinger band goes sideways, we shouldn’t trade the stock.

You can see here prices are going in upward direction and Bollinger Band is also going in upward direction.

All the bands are going in upward direction so we can trade the stock in upward direction.

But here from this point, there is a sideways movement in the Bollinger can see from this point.

Let me mark this point.

See from this point, Bollinger bands are coming close to each other, so it indicates that volatility is going to decrease now.

And see after this point there is a sideways movement in the prices.

So in this range, when Bollinger band is going sideways and volatility is low, we shouldn’t trade the stock.

Second use of Bollinger band is in Japan is used to tell the breakout in the prices when bands contract too much like here, the probability of a breakout increases.

See after this point when bands are too much contracted.

From this point, sea bands are expanding and after this contraction here we are getting an expansion in the Bollinger bands.

So here we can expect a breakout in the prices, and we can expect that prices may move in a trend after this sideways range.

Here also, you can see after this uptrend from this point.

From this point.

BOLLINGER Bands are coming close to each other.

See, the upper band is going down and the lower band is going up.

So both the bands are coming closer to each other.

It means volatility is decreasing and we can get a sideways movement in the prices.

So from this point to this point, you can see prices are sideways.

If we want to draw support and resistance lines, then you can see.

Prices are moving between these two lines.

And see they are sideways.

So we shouldn’t trade the stock if prices are moving in this range.

Now, some people say when Bollinger bands move sideways, then we can buy the stock when prices touches the upper band and we can sell the stock when prices touches the lower band.

So it is very risky to trade like this because you can see in this case.

Here.

Prices are touching the Upper Bollinger Band.

So if we are going to sell the stock here, then you can see prices are not touching the lower band and even we are getting one more candle above our entry point.

So in this case our stop loss would get hit.

So I never suggest to trade when Bollinger band going sideways.

We can trade this range only on the lower timeframe chart.

For example, this is the hourly chart and if we are getting a sideways range on early chart, then we can trade this range on 15 minute chart or five minute chart by getting signals with other indicators.

But on hourly chart, we shouldn’t trade the stock as long as prices are bound and there is a contraction in the Bollinger band.

But see, after this contraction here, bands are expanding.

This was a gap down opening after a pullback.

Now prices are going in downward direction, so they are in trend.

As long as Bollinger band is expanding, prices are in our trend.

But from this point you can see upper band is going in downward direction, lower band is going in upward direction.

So both the bands are coming close to each other.

It means volatility may decrease now and we should exit from our position because we can get a sideways movement in the prices.

The third use of Bollinger band is it signals about the continuation of the trend.

When we get a candle outside the bell in Japan after the contraction, it means that prices can continue in the same direction for some time.

Say here.

This was the contraction in Bollinger Band and this was the starting of the expansion.

Both the bands are expanding and here you can see this candle is closing outside the Bollinger bands and this candle is also closing outside the Bollinger bands.

It means the trend can continue, momentum is high and we can ride the trend in the upward direction.

The uptrend can continue for some time.

More now see this candle.

This candle is totally outside the Bollinger band.

See the length of this candle? Only the low of the scandal is touching the upper bowl in Japan and the whole body is trading outside the Bollinger band.

It is a signal of pullback in the prices, so you can see there is a pullback in the prices.

There is a red candle and prices are again entering in the range of Bollinger bands.

So when we get a candle totally outside the Bollinger band, that is a signal of pullback in the prices.

But it doesn’t mean that we will get a reversal in the prices after a pullback.

Prices are going in upward direction and it is also a signal of continuation of the trend.

So with the help of other indicators, we can get our entry and exit signals.

But Bollinger Band tells us about the continuation of trend here.

As long as prices are trading near the upper band, this is a signal of continuation of uptrend.

And as long as prices are trading near the lower band of Bollinger bands, this is a signal of continuation of the downtrend.

See here, this was a rangebound market because Bollinger band is getting narrower and this is a very narrow range.

After the contraction here you can see both the bands are expanding and they are going apart from each other.

So prices are trading about 20 EMA.

So we can get a signal of uptrend and we can expect that prices will go in a poor direction.

But you can see after three or four candles there is a sharp downfall in the prices.

So this was a fake signal and with the help of support and resistance levels, we can eliminate these fake signals if we see the previous price action.

See this level was the support level for the prizes.

And here when we are getting a fake signal, prices were resisting this level and this is a formation of head and shoulder pattern.

This has left shoulder.

This has had formation.

And these are right shoulders.

So it is head and shoulder formation above this line.

And this is the neckline of this head and shoulder formation.

That’s why here prices were resisting this level.

And here we got a fake signal.

So with the help of support and resistance, we can avoid fake signals and see after this thing, this line.

There was a sharp downfall in the prices at this candle.

Bands are going apart.

It means volatility is increasing.

So we can get an idea here that downtrend may continue and you can see prices are trading near the lower band.

Downtrend can continue for some time more.

But here you can see from this point you can see this band is going in a poor direction.

This band is going in downward direction.

So we can expect that volatility will decrease.

Now and after this point, you can see prices are going in a poor direction.

There is a retracement in the prices and this was the end of this downtrend.

So with the help of other indicators, like RSI moving average, we can trade in the same direction.

See here, when there was a huge volatility, candles were closing outside the Bollinger band.

But there is no candle that is totally outside the Bollinger band.

That’s why all the candles are going in downward direction.

But see here, prices are not able to touch the Bollinger band.

That is a signal of decreasing volatility.

And if we add RSI here, you can see RSI is giving a positive divergence.

So it is a signal of decreasing volatility and momentum is also decreasing.

That’s why you can see after this down move there is an up move in the prices.

The same is here.

Bands are getting close to each other and there is a contraction in the prices.

So we can assume that there will be a breakout in the prices.

And see here we are getting an expansion in the Bollinger band and prices are going in upward direction.

But this is the resistance level.

Near this resistance level, prices were not able to cross this level and suddenly prices are going in downward direction.

So here, as prices are trading at the lower band, we can assume that downtrend may continue now and we can trade in the downward direction.

All the candles are closing outside the band, but here prices are not able to ride at the lower band and RSI is also in oversold range.

So this is giving a signal of pullback in the prices so we can exit from our position here.

So.

There was a slight pullback in the prices and volatility is very low.

You can see prices are approximately sideways and bands are coming close to each other.

But from this point, both the banks are going apart and there is an expansion in the Bollinger band and you can see candles are closing outside the Bollinger bands.

So we can expect that downtrend may continue now.

But see this long candle when the candle is closing outside the Bollinger bands and this was a long candle, so it was a signal of pullback in the prices.

After a pullback, there was a slight consolidation in the prices.

But again, prices are going in downward direction and prices are moving near the lower band.

And when there was a divergence in RSI, so this was a signal of and of this down move, we can assume that prices will go in a poor direction or we can see a sideways movement in the prices.

So with the help of other indicators, we can get entry and exit signal and we can trade the stocks very effectively.

Bollinger Band is a very good indicator, and with the help of this indicator we are getting hourly signals.

That’s why it is called a leading indicator.

You can see here there is a contraction in the prices.

So here we are getting an early signal of the breakout and here as we are getting a positive divergence and Bollinger band is also going sideways.

So here we are getting an early signal of the end of this downward.

So in this way you can use this indicator on your charts and you can get very clear signals if you add other indicators with Bollinger Band.

• Bollinger Bands

Fibonacci

Fibonacci is a very important indicator in technical analysis.

• Fibonacci

Fibonacci Theory

Welcome back everyone.

till now we have studied lagging and leading indicators with the help of these indicators we can get trading signals based on that.

We can enter and exit the trade But in this section we will learn about a trading tool that is also an indicator and that tool is Fibonacci retracement tool when we apply this tool We get some levels that are known as Fibonacci levels.

These levels are very helpful and can be very effective component of your trading strategy Leonardo Fibonacci was a great Italian mathematician who first observe certain ratios of a number series that are regarded as describing the Natural proportions of things in the universe including price data all the Fibonacci ratios arise from the number series And this series of numbers is derived by starting with one and followed by two and then adding one plus two to get three the third number then adding three plus two to get five and five plus eight to get 13 and so on.

Now if we divide any number in this series by the preceding number the number is always one point six.

For example if we divide 5 by three then we will get one point six.

If we divide thirteen by eight we will get one point six.

And if we divide 144 by eighty nine we will get one point six one eight number and the inverse of this ratio is zero point six one eight.

Now these two ratios are refered to as golden mean or the golden ratio.

Now you can see the occurrence of this golden ratio everywhere in the nature see golden ratio has been used in postage stamps.

This is one point six one eight and it is also used in designing the characters.

The face is in the proportion of one point six one eight and one Google logo has been designed in golden ratio the painting of Leonardo da Vinci’s is also design in golden ratio the U.N.

secretary building logo of Toyota various product design and the Aston Martin.

Now the question is why this golden ratio is so important for us when we apply this Fibonacci tool you can see there are so many ratios in this tool these are the Fibonacci levels and these levels can be derived from this Fibonacci sequence and as we know this is golden mean point six one eight is the golden mean that is the inverse of golden ratio if we subtract this number from one we will get 0.382 our second Fibonacci level and if we subtract this number from Golden Mean We will get zero point two three six that is our first Fibonacci retracement level now half of 1 is 0.5 that is also Fibonacci ratio under root of Golden Mean is zero point seven eight six that is our fifth Fibonacci retracement level and zero point six one eight is the reciprocal of one point six one eight we have studied earlier that is also called the golden mean now one point six one eight is the golden ratio and under root of this number is 1.272 that is a Fibonacci extension level if we multiply this number two times then we will get 2.618 That is our next Fibonacci extension level and in this way we get all these ratios now in this tool you can see all these ratio this is 0.236 this is 0.382 this is 0.5, .618, .786, 1.272,1.618 that is golden ratio all these levels are very important levels and the reason is traders all over the world are watching these levels and placing buy and sell orders at these levels that’s why these levels act as important support and resistance levels now we will learn how to apply this tool on the chart first of all we will identify swing high and swing low for the current trend.

You can see this is an uptrend and for this uptrend this is our current swing.

So for this current swing this is the low of this swing.

And this is the high of this swing.

So to know the Fibonacci retracment level We will apply this tool from low to high in an uptrend.

So we will click here and then extend the tool to the high of the swing and we will get all these levels These are the Fibonacci retracement levels.

In downtrend We will apply this tool from high to low.

Now you can see prices are in retracement phase in connection phase And now the expectation is that if market retraces we will find support at any of the Fibonacci levels because traders will be placing buy orders at these levels as the market pullbacks.

So currently you can see the correction is taking place on 0.382 level and if prices take support here then we can place our buy order here with a stop loss slightly below this level you can see in this stock prices are in uptrend and we are choosing this swing.

So we have applied Fibonacci from low to high because in uptrend we apply Fibonacci from low to high.

And these are the Fibonacci level prices are taking support on 0.5 level 50 percent level and then resume its previous trend So we can place our buy order here with a stop loss at the next level.

And it was a very good opportunity to buy this stock here.

Now in this stock prices are in downtrend and if we are choosing this swing.

So for this swing we will apply Fibonacci from high to low in downtrend we applied Fibonacci from high to low to know the Fibonacci retracement level.

And see this was the pullback rally and this pullback rally was up to 38.2 percent level So it was a very good opportunity to sell the stock with a stop loss slightly above this level then this was the next swing and we have applied Fibonacci to the next swing and for this swing you can see prices are resisting this thirty eight point two level again in this swing There was a pullback rally up to thirty eight point two percent level and in this swing also the pullback rally was up to thirty eight point two percent level So when prices were resisting this level it was a very good opportunity to short sell the stock with a stop loss slightly above the high of this candle and you can see there was a sharp fall in the prices but currently prices are again resisting this level Now if prices will breach this level in upside then we will see the next level as the resistance level and all these level will act as the resistance level for the prices.

Now see in this chart Prices are in uptrend and these are the different swings for this uptrend.

So I have applied Fibonacci for this swing for this swing.

It was a 50 percent retracement in the prices and then this was the next swing for next swing It was seventy eight point six percent retracement and for the next swing it is 50 percent retracement and currently this is the current swing.

There was a retracement up to thirty eight point two percent level and after taking support on thirty eight point two percent level prices are going in upward direction though Fibonacci is a very important tool but there are some problems to deal with it first is there there is no way of knowing which level will be the ultimate support level at which the correction takes place you can see in this swing there was a retracement up to 50 percent level and in this swing there was a retracement up to 78 percent level for this swing Again it was a retracement up to 50 percent level and in this swing retracement is up to thirty eight point two percent level.

So we have to add other indicators to get our entry signals and to confirm our position like moving average, bollinger band and MACD.

Second problem is that market will not always resume its uptrend after finding them support.

For example in the current swing prices has taken support at thirty eight point two percent level.

But if prices breach this level in downside again Then we don’t know at which level prices will took support before resuming the uptrend.

So we should always place stop-loss below our entry level.

For example if prices are taking support here and we are going to buy the stock here then we should please our stop loss at the next level below this level and if prices breach this level in downside and take support on any of these levels then if we are going to buy the stock then we should place our stop loss slightly below our entry position.

Third problem is we cannot identify the current swing because there are so many swings in the current trend.

You can see in this current trend this is a shorter swing and this is the long swing Then there are so many short swing in between this swing and this is another swing so there are so many short swings within the big swings.

That’s why I suggest to choose current swings but on higher timeframe chart.

Now all these levels are the Fibonacci retracement level.

These are the support level in uptrend and resistance level in downtrend up to which the correction takes place.

Now we will learn how to apply Fibonacci extension tool for Fibonacci extension level.

We will apply.

Fibonacci from high to low in an uptrend and low to high in an downtrend.

We will simply interchange the points of our Fibonacci retracement tool.

The tool is same this is Fibonacci retracement tool but we will apply this tool in the opposite direction.

For example for this swing this is high and this is low.

If we want to apply Fibonacci extension tool we will simply apply it from high to low and we will get our Fibonacci extension level.

These are the Fibonacci extension level.

Fibonacci extension levels are used to know our target levels for example after taking support at thirty eight point two percent if we are buying the stock here with a stop loss slightly below our entry point then we can see the target level as these levels we can set our target at this level or at this level or at this level because we can expect that prices will resist these levels for the future move and in a downtrend to know the Fibonacci extension level target levels we will apply Fibonacci retracement tool from low to high of the current swing so this is the low of this wing we will apply Fibonacci tool from low to high and we will get our Fibonacci extensions level if we are short selling the stock we are making a short sell position here then we can expect that prices will take support on any of these levels and we can set our target near these levels for example in this stock prices are in uptrend and this is the current swing so to know the Fibonacci extension level we have applied Fibonacci from high to low and these are the Fibonacci extension level you can see there was an up move up to one point six one eight level.

And after touching this one point six one eight level that is also the golden ratio prices are consolidating and taking support on one point two seven two extension level.

So in this way with Fibonacci extension tool we can know our target levels and we can set our target near these levels because prices will resist these levels and we can expect that prices will touch these levels so in this way we can apply Fibonacci retracement and Fibonacci extension tool with this tool We get very important levels and you should always see these levels when entering the trade because prices take support on these levels and resist these levels also.

Fibonacci Retracement and Extensions

Hello everyone and welcome to our next lecture by using Fibonacci tool we can not find out the curent trend It is only useful to predict support and resistance levels.

It is believed that the Fibonacci ratios behave as the major support and resistance levels.

Fibonacci analysis is helpful when there is an noticable upmove or downmove in the prices.

Whenever a stock moves in any particular direction and retrace back before moving in previous trend it is believed that prices retrace up to the anyone of the Fibonacci levels and these levels are called Fibonacci retracement level .

To know the Fibonacci retracement levels First we should have a clear uptrend See this is the uptrend so we will take two points of this uptrend The trough the low and the high.

This is the peak of this uptrend and this is the trough of this uptrend So this is the Fibonacci tool.We will select the tool and we will apply from low to high and these are the Fibonacci retracement levels so we will mark all these levels and see these all are the support levels for the prices because this is the uptrend and now prices are in downtrend and see this is the sixty one point eight percent level and we can clearly see that at this level this downtrend is complete here because this is the candle the last candle.

The candle is breaching downside this level but the next candle is above this level and at next level 50 percent level prices are consolidating for approximately 10 days after consolidating that level now prices are in uptrend You can see here that this level is the significant support level now because prices are moving now in the range and they are taking support on this level but not able to breach this level in downside so every time when prices are coming back to this level and we have a buying signal with other indicators we can buy the stock and see this is the range of the stock.

The stock was moving in a sideways channel.

So when we get a clear breakout of this resistance level this channel than we can assume starting of new uptrend now stock is moving at high and we don’t have any resistance level in upside.

So we will use the Fibonacci extension’s to know the resistance levels for this we will simply reverse the Fibonacci tool This was the high of the swing and this is the low of the swing we will just reverse this tool means we will reversing the points of Fibonacci tool we will apply the Fibonacci from top to low These levels are the Fibonacci extension’s levels and act as the resistance levels.

So again we will mark all these level and see the price action near these levels.

Now see this was the break out of the range and at this level this was the next resistance level.

Prices are just touching this level and take some time to cross this level in upside.

And then prices are taking support on this level.

Now this resistance level is the support level for the prices and after taking support on this level now prices are touching the next resistance level.

This is the next resistance level Next Fibonacci extensional level.

The second time when prices test this resistance level they are not able to hold this level and fall down but this peak level is now the support level for the prices.

So they are consolidating at this level and again testing this resistance level then breach this level in upside.

and see this was the next resistance level of Fibonacci extension and now they are taking support on this level after taking support on this level two times Now prices move in uptrend See this is the chart of Facebook incorporation and these are the trend lines for the stock.

The stock is in uptrend So this was the correction phase and it is not the downtrend on daily chart.

So we will set the chart on hourly time frame so that we can assume this correction as our short term downtrend In downtrend Fibonacci retracement level are used to know the resistance level see prices are in down trend and we will apply the Fibonacci retracement from high to low.

This is a swing.

So this is the high this is the low we will apply Fibonacci from here to here.

So this is a pullback rally and we can know the resistance level to which the pullback rally can occur so we will mark this level this is sixty one point eight level and we can see that prices are testing this level And again here prices are testing this level but they are not able to hold this level and again make a sharp down move up to the extent of this trend line.

So if we apply the Fibonacci tool to know the extension’s level we will reverse the Fibonacci tools It means we are applying the Fibonacci tool from low to High.

This was a swing and this was the low and this was the high so we will apply Fibonacci tool from low to high So these are the Fibonacci extensions level.

Now see prices are touching the trend line.

But it is also a major Fibonacci extension level And this is in downtrend so these levels are the support level.

see prices are just touching this level.

And then after consolidating here for some time they resume the uptrend.

Fibonacci Practical

First of all you should be aware of your trading prospective.

For example if your trading prospective is a positional trader than your chart should be weekly daily and hourly chart so open the higher time frame chart.

That is the weekly chart in this case.

This is a weekly chart of TATA steel and we can see that the current position of the stock is the retracement face of this uptrend so we will find the support levels and we will use Fibonacci to know the retracement levels.

For this we’ll apply Fibonacci from low to high.

This is the low point of this uptrend and this is the high so we will apply from low to high and these levels are the support level retracement levels for the stock So we will mark the levels that are near to our position because those levels are only significant for us.

So this is a 23.6 percent level.

And then this is thirty eight point two percent level and the next level is 50 percent level.

Now the stock is in between these two levels and these are twenty three point six percent level and thirty eight point two percent level than we will open the middle time frame chart.

That is our daily chart in this case So this is a daily chart of TATA steel and on weekly chart we are in retracement phase it means on daily chart we are in downtrend So this was the first swing.

And if we apply the Fibonacci to this swing we can see that the stock made a thirty eight point two percent retracement.

Here We will apply Fibonacci from high to low because we are in downtrend after making a pullback rally or we can say retracement up to this thirty eight point two percent level.

Now stock is moving in downtrend so to know the Fibonacci extension levels we will just reverse this tool.

We’ll interchange the position of the pivots And these are the levels.

Now the Fibonacci extensions levels are the next level is this 1.272 level So we will mark this level you can see here that stock exactly made a downfall up to this level.

And now after touching this level stock is again moving in a pullback rally.

So this time we will take this swing.

So we’ll apply Fibonacci from high to low of this swing Now these are the Fibonacci retracement levels because stock is in downtrend and this is a retracement phase.

This is a pullback rally so we will mark all these levels the first one is twenty three point six percent level.

The second is thirty eight point two percent level then 50 percent level and sixty one point eight percent level.

Now see stock is making a retracement up to this sixty one point eight percent level.

That is also a golden ratio.

And here it is consolidating between these two levels.

Now we will open the lower timeframe chart that is hourly chart in this case So this is hourly chart of the stock.

Now we’ll apply our moving average set.

The moving average set for positional trading is 50 period 21 period and 14 period So we will apply this set to hourly chart and we can see that these are our resistance and support levels.

We will also add RSI tool to the chart and now see when stock make a downfall up to this level here.

We are getting our positive divergence on RSI So then we get buying signal from this moving average set at the support level this is a support level for the prices we can make a buying position.

Now here prices are consolidating for some time because this is now the resistance level for the prices.

But this is a green candle crossing this resistance level in upside at this level rises take support and then they touch the next resistance level at this point.

They make support on this level.

This is now the support level and now they are pitching this Lauerman.

And here we are getting exit signals.

So our buying position was this and selling position was this when we get a buying signal from this moving average set we will employ our stop loss slightly below this support level at the low of this candle We will take one more example this is the weekly chart of Vedanta Limited This is the uptrend and now the prices are in retracement phase so we will apply Fibonacci from low to high and these are the retracement levels then we will shift the daily chart See this is the daily chart of Vedanta and this was the first swing and this is the second string.

So first we will apply the Fibonacci tool to this swing to know the extension level when prices cross this support level in downside.

So these are the extensions level and we will mark all these levels.

Now we can see on this level prices consolidate for approximately 15 days and now and now after testing this support level of weekly chart prices are consolidating at this level.

That is the daily support level.

Now we will shift to hourly chart and apply the moving average set to the chart.

Now see here when prices were consolidating at this when then crossed this level.

We are getting a buying signal already with the moving average set so we can make our selling position at this candle now stock made our downfall.

and see on RSI we are getting now a positive diversion-so we should be very cautious at this point because this was our sharp downfall.

Now here moving averages are going sideways so we will exit from our short position.

Again prices are testing this level but couldn’t hold the level.

And here we are getting a selling signals with the moving average set we will make our short sell position.

And this was the support level.

Now when prices are near this level we will exit from our short sell position.

Now again here prices are taking support on this level this is the support level and when this red candle is crossing down this support level.

We can make our short sell position but the next level is very close to this level.

So we will be very cautious about this level We can make our position here and exit here because this is the major support level of weekly chart now we will see on RSI, RSI is giving up positive divergence because stock is making a downfall.

But RSI is going in upward directions so when this green candle is crossing above this black line and also moving averages are giving us our buying signal.

We can make our long position by employing a Stop-Loss slightly below this level at the low of this candle.

And at this point we are getting exit signals prices again making our support on this line.

And this is a green candle crossing above the support line in upside where we are getting a buying signal and we can buy by employing a stop loss at the low of this candle.

And at this red candle we can exit from our long position because this candle is very far from the moving average set And also we are getting a negative divergence on RSI Now see here again prices are consolidating at this level.

This is the support level.

Now currently prices are below this level and if they take support on this black line we will see the price action near these levels and make our position accordingly.

RSI is giving a positive divergence if prices cross this level in upside and take support on this we can make our long position up to the target of this blackline.

So in this way we can make use of Fibonacci retracement and extensions level forgetting entry and exit signals if we employ a support and resistance strategy here that we will learn in our next course Thanks for watching the lecture.

Chart Pattern Analysis

Gap Theory

Welcome to the next lecture in which we’re learning about the gap psychology A gap is the unfilled space or Area on the price chart in which there were no trades These are the gaps where there is no trade normally these occurs between the close of the market on one day and the next day’s open lots of things can be responsible for this such as earnings reports coming out after the stock markets have closed for the day.

If the earnings were significantly higher than expected a lot of buying interest will be generated overnight resulting the increased demand from buyers and when the market opens the next morning the price of stock opens above the previous day’s close if the trading that day continues to trade above that price a gas will exist in the price chart If the opening price of the next day is higher than the previous days close then we get an up gap And if the opening price of the next days candle is lower than the previous days candle’s close we get a down gap Some times gaps are filled it means price has moved back to the original pre Gap level ones gap gets filled, gap tends to reverse direction and continue its way in the direction of gap Gaps can offer evidence that something important had happened to the fundamentals or the psychology of the crowd Gaps are of four types common gaps, runaway or continuation gaps, breakaway gap and exhaustion gap we will understand the types of gaps one by one.

common gaps occur in quite market when market more sideways.

Supply and demand are in balance and these gaps are closed rapidly with in a few days you can see here that these are the common gas because the prices are moving in sideways range And it is making a symmetrical triangle pattern We are getting many Common gaps in this range This is gap down opening and we get a volume slightly higher than the average volume on this day.

But the next day the volume is average and here we are getting a gap up opening and the volumes are higher than the average volume on this day and the next day it is also higher.

But on the following day the volume is quite normal here we are getting a gap up opening but this gap is also filled in next few days is here also the gap is filled And here also the gap is filled by this red candle So these are the common gaps which are very common and they not very important for trading purposes Breakaway gaps are important ones.

They occur when price action is breaking out of the congestion area volume is usually significantly high on these gaps due to the increased buying in price.

The point of breakout usually becomes a support level in an uptrend and the resistance level is down trend.

A new trend Starts from this gap and we should buy if we get an up gap and we should sell if we get a down gap with the breakout if we get a breakaway gap with any chart pattern it is a better opportunity to trade For example in this chart the prices are making a rectangular pattern and we get a breakout from this pattern so it is an opportunity to buy here.

The prices are taking support on this.

resistance level for this channel and now a new trend begins from this gap They are easiest to identify and are most profitable to trade.

Runaway gaps occur in the middle of the trend and are caused by increased interest in the stock these gap usually not filled and occurs in the course of rapid straight line advances they are also known as continuation gap because the trend continues in the direction and in the middle of this trend we get this runaway gap.

they are Also known as measuring gaps because they give us a target for the end of the move This is that gap we get in the middle of the trend because the trend starts from here.

So we can get a target point for this trend that the trend will end approximately here because it is the middle of the trend a good uptrend have runaway gaps because they caused by significant news events that cause new buying interest in the stock in downtrend these gaps occurs due to increases liquidation of the stock position by the buyers there fore the price continues to drop.

The volume is significantly high on this gap usually two or three times more than the average volume exhaustion gap occurs at the end of the move They are highly significant like runaway gaps these gap are Also associated with rapid extensive advances or declines during uptrend it is not followed by any new higher high and in downtrend It is not followed by new lower lows volumes are crucial for recognising these gaps.

usually volumes are low till the opening of the gap.

despite of continous increase in the price.

Once exhaustion gap begins volumes spikes up significantly exhaustion gap are quickly filled and price reverse the trend during uptrend a bullish euphoria overcomes traders the price gap up with huge volume and a great profit taking takes place by the buyers The demand for the stock dries up and price drops suddenly and the reversal takes place with high volumes exhaustion gaps are most attractive and profitable to trade If price moves back into the gap area.

A gap opposite to the exhaustion Gap is known as island reversal gap leaving an island behind it is a strong signal that stock is on its way down And these gaps are the confirmation of the reversal after the exhaustion gap.

It is because when the trend reverses after the exhaustion gap the opposing forces are so strong the price gaps opposite to the trend in this example the stock is in down trend and here The stock is making a pattern that is a rising wedge pattern this is sideways trend, here we are getting many common gaps you can see And when we get a break down from this pattern we get a gap down opening and this is the break away gap the volume is usually high at this gap it is approximately twice the average volume Now this is the run away gap and it is in the middle of this trend giving us our target for the end of the move.

Now we are getting exhaustion gap here and you can see the prices are getting lower and lower but the volume is very low during this down move.

It is usually less than the average volume.

Now after this gap volume suddenly increases and this is the confirmation of this exhaustion gap And the end of this down move this was all about the gaps.

Trend Patterns Reversal

Welcome again to EWTA Till now we have learnt about Trend and trend lines Continuing this topic, today we will learn about trend patterns We can easily recognise up trend and down trend But when the market is sideways trend do we know about future trend Yes when market is trendless or ranging Some Chart pattern formation is there Which helps us to know and understand about the new trend Chart patterns Show buying and selling in the pictorial form so that we can take decision about the future Trend Accordingly trade in that particular direction They can be used on short term and long term time frame both The data can be intraday daily weekly or monthly And patterns can be as short as one day or as long as many years Majority of chart patterns fall in two groups Reversal and continuation pattern

In this part we will cover only reversal pattern Reversal patterns Give us Indication of change of trend When the direction of trend changes as from uptrend to downtrend or down trend to uptrend These patterns can be Seen in the chart Our first Reversal pattern Is Head and Shoulder pattern Head and Shoulder pattern is the reversal pattern mostly seen in uptrend In an Establish uptrend sellers become dominant at highs result in decline and forms Left shoulder Which take support on a line which you called neckline Buyers try to push the prices and resumes buying which takes the stock market to new highs forming head this Is the head formation but it also take support on neckline this is a same line as a support line and head is Also taking support on this neckline As market rallies Once more But fails to move above the previous high and once again Test the neckline

This is the right Shoulder formation We can see here that the peak of the right shoulder is below the peak of the Head formation It should always lower than the heads high When the prices Falls below neckline The prices are now trying to close down this Neckline and they also trying to cross this neckline But fails Then the downtrend extend We can make our short sell position at breaching point of this neckline And prices cross this neckline in downward direction so we can make our short sell position And we can employ a stop loss at the peak of this right shoulder If we get the high volume on this breakout Then the pattern is confirmed And We can surely make a short sell position here In this example prices are in uptrend And this peak is taking support on a line then A Head formation is there The peak of the head is Always higher than the peak of left shoulder It is also taking support on the same line line which we call the neckline Now it is the formation of left shoulder And when we get a Breakout on the neckline in downward direction we can make Our short sell Position here Here we can see the prices are also trying to touch This neckline They are trying to cross this neckline in upward direction but they fails It means it is the End of this uptrend and a reversal of this downtrend downtrend So We can make our short sell position here with the stop loss at the peak of this right shoulder Points to remember here are Most Head and Shoulder pattern are not as perfect symmetrical as shown in this figure Many Head and Shoulder pattern consist of either multiple left shoulder or multiple right shoulder In this chart we can see there are two shoulder here and they both are taking support on this neckline Also there are two shoulder Right shoulder here they both are taking support on this same neckline Instead of being horizontal the neckline might be sloping a little up or down But if the neckline is upsloping Make sure that the lowest point of the right shoulder Must be lower than the Top of left shoulder It means If this neckline is Slightly stopping up In this way Then The support of this right shoulder Should be lower than the top of this left shoulder Inverted Head and Shoulder pattern Is simply the inverse of Head and shoulder top formation This formation to consist Of A left shoulder ahead and right Shoulder It suggest a trendreversal from down to up as it is commonly seen in downtrend At the end of the downtrend The left shoulder is formed usually at the end of an Extensive decline At the end of the left shoulder there is a small rally And this rally usually occurs On low volume The head is then formed and finally the right shoulder is formed by a rally A neckline can be drawn Across the top of the left shoulder head and right shoulder This is the resistance line and we can call it neckline An upside breach of this neckline on a rally from the right shoulder Is a final confirmation And completes the Head and Shoulder bottom for me And this is a signal to buy The pattern signals the end of the downtrend and starting of the uptrend So we can buy here.

When this right shoulder tops Is breached This resistance line in upward direction But one should remember buy when the neckline is breached on the closing basis It means that the candle should close above this resistance line on the daily basis This is the Example of inverted Head and Shoulder pattern This is the Downtrend Prices are in downtrend And the top of the left shoulder and This is the head formation Top of the head And the top of this right shoulder They are resisting this line Which we called the neckline When we get a breakout of this Neckline in the upper direction we can make our buy position Below of the head should be Lower than the low of this left shoulder and this right shoulder The volume at the Breakout should be higher than the average And This is the confirmation of this pattern Rising wedge This pattern indicates the starting of the beer or downtrend The series of higher highs And higher lows Keeps the trend bullish which can confuse us about the future Trend We can simplify the matter when the pattern is on finishing trade most of the indicators are overbough and Divergence can be seen We will learn about indicators and divergence in the upcoming modules The rising wedge pattern begins wide At the bottom and contracts At the top We can see This is the starting of the rising wedge pattern and it is wide at this Starting And this contract at the end of the pattern When we get a Breakout on this lower trendline in downward direction Make a short sell position if we get negative divergence on RSI This is the Example of rising wedge pattern Prices are in uptrend and Here they are making high tops and higher bottoms So if We get a Breakout on this trend line With higher volume and also we get Negative divergence at here at this Point we can make a short sell position it is the confirmation of End of this up trend and starting of the down trend Falling wedge is a bullish pattern seen in A down trend It is a indication of up trend Patterns begins Wide at the top And contracts at the low Positive Breakout is seen when the resistance formed by this upper trendline Of the wedge is broken If we get a Breakout at this upper trend line in upward direction We can make our buy position here it is a confirmation of the end of Of this town friend Always wait for the confirmation by the indicators And divergence Before initiating any position Because at the Breakout of This pattern We must get a positive divergence on RSI In this chart prices are in down Trend And they are Making falling wedge pattern Here we are getting a falling wedge pattern with a Breakout in downward direction So we will not make any by position here But after making this fake Breakout suddenly prices are Going in upward direction and when we get a break out from this resistance line this upper trendline in upward direction we can make our buy position here if we get a positive divergence on RSI Double bottom pattern can be seen in short term as well as long term time frame A bottom is formed and then pullback resume which can continue Till it Faces A major resistance line After touching the upper resistance line Prices Fall back to the previous low And rise again to upper limit This time prices cross the upper limit and Breakout takes place a W like formation is Completed and prices Move in UP trend This is example of Double bottom pattern Prices are in down trend And take support on a line After taking support prices Are going to touch this Resistance line and again a rally occur and we get a breakout On this resistance line in upper trend line In upward direction when we get a break out in In upper direction from this line we can make our buy Position here with the Stop loss at the low of this candle Double top pattern Is a bearish pattern and can be seen before the starting of a down trend In an established uptrend when the Last peak is Formed this is the last peak And the next peak fails to cross the old one This is the second peak And This is at the same level of the The first peak These peaks are taking Support on the same support line And when we get a breakdown From this Support line in the Download direction we can make Short sell position The letter M like formation is there And the pattern is completed When we Get a breakout In downside at this support line Which we call the neckline Between the double top and double bottom pattern a gap of minimum 3 to 4 weeks can be considered And never assume the formation of a Double top pattern until the neckline is actually breached Because in an uptrend each new rally after reaction could appear to be Making a double top The two tops must be separated by a deep and long reaction If the two peaks Are close together in time then it signifies consolidation rather than reversal Volume during the Rise of the second peak must be lower than That during the rise Of the first peak this Is the example of double top pattern prices are in uptrend And the both peaks are taking Support on the same support line which we call the neckline Here we get a break out On this neckline in downward direction Prices are touching this neck line and trying to Cross it In upward direction but they fail So we can Make a short sell position here With the stop loss at the top of This right peak Broadening triangle pattern Appear much more Frequently at Tops then At bottoms They are assumed as the top reversal pattern and have bearish implications A broadening triangle pattern is a powerful reversal chart pattern Which occurs Frequently in the later part of an Overextended Bull rally It consists of three successive Peaks.

each higher than the previous one The peaks can be three or four in some cases in this case the peaks are higher than the other and lows are lower than the other When we get a break out on lower trendline we can make a short sell position With the stop loss at Top of this last peak.

here prices Are in uptrend And we are getting a broadening triangle pattern At the top of The bull trend As you can see the peaks Are higher than the Other peak and they are making lower bottoms We get a break out at this lower trend line with a gap here In this example we are Getting a gap With the higher volume So at the Starting of this red candle we can make Make a short sell position With stop loss at High of this last peak Rounding bottom is a Long term reversal pattern It takes a lot of time to complete on Daily charts It is not clear because of noise but on weekly charts Its formation gives a clear Signal After a long consolidation period it Turns from abearish trend to Bullish and forms a soccer like shape we can buy stock near the end of the soccer curve From where the beginning of

Trend Patterns Continuation

In this part we will learn And understand about the continuation pattern Continuation pattern indicator a pause in the trend and signals the continuation of the established trend The first continuation pattern is symmetrical Triangle This pattern can be found in uptrend or downtrend both During an uptrend or downtrend Opossums When the stock cause in the consolidation forming successive higher bottoms and lower tops Volume generally decreases to the completion of the Triangle At one stage volume rise up and range Is almost at Suddenly a breakout is observed With heavy volume And the trend continues In its Direction This is example of Symmetrical triangle pattern Which has join all the highs and lows with the trendline and get a triangle that is a Symmetrical in shape At this point the range is almost zero and Breakout occurs in the upward direction The previous trend was uptrend And for sometime the prices goes into the consolidation and after this breakout in upward direction The trend resumes we can make our buying position here When we get a break out in the upper direction Ascending triangle is a bullish formation that generally forms During an uptrend Ascending triangle pattern indicates Accumulation and has a bullish buy before the breakout In An established uptrend current prices consolidates in upward direction for sometime But faces a resistance every time when peak is Formed This resistance line is same for all the peaks All the laws in the triangle are higher and higher Every time when prices reaches this resistance line they fail to cross the line In upper direction Volume diminishes from the starting of the triangle to the end At one point We get a positive breakout With huge volumes and uptrend resumes We can make our buying position here at the break out of this resistance line This is example of Ascending triangle pattern The prices are in uptrend and they are registering a upper trendline every time if we join all All the bottom of this Triangle pattern we get a ascending triangle pattern When we get a Breakout on this resistance line upper trendline With heavy volume we can make our buying position here As it is the indication of continuation of the uptrend The descending triangle is a bearish pattern usually seen in downtrend Successive lower highs are formed With prices taking support at certain level On downside everytime It shows that the Selling pressure is high at every peak Short term traders can use this pattern for trading by selling at every peak But long term investor Must stay away The stock making this pattern As the pattern approaches it’s Completion Volatility and volume decreases A breakout is witnessed on the downside with heavy volume Showing the great pressure of Selling In This with this pattern gives the signal of the continuation of downtrend This is example of descending triangle pattern The prices are in downtrend and they are making here A Descending triangle pack Here we are getting a break out in upward direction so we will not make any position here Because this is a bearish pattern and We are getting A Bullish Break out here When prices Cross this lower trendline Here we can make our short sell position because this the Bearish continuation pattern And After getting this break out at this Lower trendline We can make our short sell position as the prices resumes the downtrend Flag pattern Is a short term pattern seen in UP trend and downtrend both the prices mark a A small consolidation and Preceded by A short advance or decline Flag pattern slope a little And if not then it It is a rectangle path Sloping so Is the flag pattern Is the pattern is horizontal than it It is the rectangular pattern If the established trend is up Then flag Would slope down And if The established trend Is Down then the flag should Slope up A Breakout is achieved with great volumes in the opposite direction of the flag This is the flag pattern in uptrend so Flag pattern is sloping down the flag pattern is in downward direction we will get a break out in Upward direction And we can make our buying position here when prices break this upper trendline This is example of flag pattern prices are in Uptrend And they Are going in consolidation phase for sometime Flag pattern here prices are in Uptrend so The flag pattern is Slightly sloping down We are getting a break out in Upward direction when prices break this upper trendline so we can make our buying position here If the range Is white This range is white Then alert trader can take advantage of this range They can sell here and buy here If the range is white This is the example of rectangular pattern This Black pattern is sloping down but this Rectangular pattern Is horizontal So if we get the break out at this Upper trendline this resistance line at Upper direction we can make our buying Position here The cup and handle is a bullish pattern that Makes a consolidation period for sometime forming the cup like shape In an established Uptrend a cell of takes place by forming the initial part of the Cup trend remains uncertain for sometime and then An up move is witness After reaching the previous high Prices correct Again to form a handle like shape If the Volume increases and a Breakout is witnessed Then trend can considered stronger This example of cup and handle pattern The trend is up Trend And for sometime prices are going in consolidation face The cell of is Taken place here Forming a cup like shape this is a cup like shape And Then we get a handle here The Handle usually makes the shape of falling wedge here and when we get a Break out on This handle With the heavy volume we can make our buying Position here Falling wedge is a continuation pattern and is a bullish pattern We have learn about the two patterns That is falling wedge and rising wedge in the part 1 also that are reversal pattern So please don’t get confused We can differentiate between the patterns with the help of trend If falling wedge pattern Seen in the downtrend Then it is a reversal pattern And when it is seen in an Uptrend Then it is a continuation pattern Moreover During reversal pattern these two patterns shows the overbought and oversold range of oscillator But In continuation pattern There is nothing like that In an uptrend stock gets is consolidation forming the wedge sloping down After positive Breakout prices resumes uptrend We get a positive Breakout so we can make our buying position here This is example of falling wedge prices are in Uptrend And they are making a falling wedge pattern sloping down we get a break out here with a gap In this example we have Getting a gap here so It Is the confirmation of the Continuation of this pattern This uptrend We can make our buying position at the Opening of this candle Rising wedge Pattern is a bearish continuation pattern After a heavy sell off Prices rise for sometime making higher highs and higher lows But contracting They are contacting at the The end of this pattern And Breakout occurs at Lower wedge and trend extends it Selfs The prices are in downtrend and For sometime they are giving a pullback rally at the contraction of this patter we are getting Breakout at the Lower Trendline This Support line So we are getting a break out here We can make our short sell position here

Risk Management

Stop Loss

Welcome back in this lecture we will learn how to employ stop loss We trade and invest in stock market with an expectation of profit But if our decision go wrong we must have the ability to exit from such position in time Is that important factor for you can say tool Which helps us to exit from a wrong trade When market crashes suddenly due to panic most of the face decision paralysis And prices of are holding fall sharply in front of Eyes That’s why before we face with such circumstances We must follow the stop loss An exit the position in time Sometimes it happens that In case of sudden panic the prices fall sharply And the rebound equally sharply and so During the short decline a stop loss is triggered And later on sale stock Rises back to the old level Put a stop loss being hit of you Say 2 out of 10 So Two times you could get slight loss due to the stop loss But the other eight times you are saved Applying stop loss is like applying brakes to a car at right time All you can say that a stop loss is like a parachute When we plug from Heights we have to open a parachute in time To safely come to the ground Same is with stop loss If you do it in time it save us from further erosion of a capital or big losses Market always give at least one opportunity to everyone To save themselves And exit at right time Seldom does market crashes without giving signal in advance So we must follow a stop loss to save our capital from huge losses Stop loss are of two types Primary stop loss and trailing stop loss Primary stop loss is a level below your initial by price It can be based on crucial support levels on charts When support is broken we should exit the stock It can be a Fibonacci level, trendline or it can be a moving average Trailing stop loss is a level above are initial by price This kind of stop loss enables us to take a maximum portion of profit home in an opposite trend In the worst scenario We may not take Entire profit home What we can take maximum possible profit If you employ trailing stop loss technique Even if market crashes We will exit by taking major portion of our profit And not losing our Profit in bearface Trailing stop loss can be a moving average based on your trading style Or it can be percentage of profit that we are earning Now we will take an example to understand how to employe a stop loss In this Example of nifty 200 day moving average is acting as a support level here And in the downtrend it is acting as a resistance level So We can take our buying position When prices crosses above the support level and we can employe our primary stop loss slightly below This moving average so We can employ a stop loss at the Low of this candel And we can make our buying position here In this case we can make our buying position here when candles cross This support level this moving average And a stop loss can be low of these candles Here we can employ a primary stop loss in Downtrend When prices process below this resistance line or you can say 200 m moving average We can initiate a short sell position here And our primary stop loss will be at high of this low candle now see Now see this was are primary support Line this is the moving average And we set 7 and 14 Period moving average to this chart Then We can say we are making a buying position here And out primary stop loss will be slightly below this supportline Now as long as prices are above This blackline this 14 Period moving average We are in a safe position And now here This black line is below this pink line So are trailing stop loss in this case will be this black moving average It keeps on changing with the change in price Now here pink line is below this black line so We will exit from a long position In this stage we are safe from this replacement face and the maximum part of profit in our hand This is a trend line and As stock is in uptrend, this is the uptrend line and When we are Initiating our buying position This time when price is crosses above this trend line we can initiate are by position and stop loss Will be at the low of this candle In this stage our stop loss will be at the low of this candle This is hourly chart of Nifty And here This is the trend line And this is the moving average on which Prices Are taking support every time So these two are acting as a primary support For the prices Now see we are choosing our 8 period and 20 period moving average to employee a trailing stop loss Suppose we are initiating our buying position here is black line is above the red line And here When black line is below the red line This red line is a trailing stop loss and now as stop loss get hit So we will exit our buying position here Similarly you can buy here and prices touch trend line We can buy here And Here When a black line is below this red line we can exit from a long position Prices are crossing below this trendline also this moving average these two are the Support levels So we will Wait for the confirmation when prices crosses above this trend line or this moving average To initiate our buying position But if you want to trade for 15 minutes at home intraday trading then we will see How to employee are primary and trailing stop loss we will zoom in this part And see how to employee stop loss Now see this was a part you are discussing This was the trend line And this is a 15 minute chart And these Are the Fibonacci levels This is the Fibonacci tool And prices are causing down this trend line And now they are touching this 50% Fibonacci level By touching this after touching this level prices are Going in upward direction.

But This is a Moving average Resistance line now because prices are lower the trendline so it is behaving as a resistance line Again they are falling to the Level of this 61.8% level but they are not reaching this level And They are going in upward direction So we can Employe our primary stop loss at this level 61.8 level And we will initiate a buying position Intraday position when prices crosses this 50 level this will be Our, Confirm position We will employ a primary stop loss as at 61.8 Level Now this is a buying position These red pink and this brown line Are Short term moving average so We will Keep our trailing stop loss at this brown moving average because it is the Slow moving average Now prices are above the brown moving average And it the here it is behaving As a trailing stop loss Prices Are crossing this Green moving average that is a 200 period moving average this is 15 minutes chart so This is the 200 Period moving average for 15 minutes Low prices are above this moving average so They can cross the trendline also But Now This trend line is behaving as a resistance line now because prices are lower than this trend line This trend line is behaving as a resistance line Here And here But this pink line is above this brown line At this point see This Pink line is below this ground line and also The prices are touching this trendline They are moving down this trend line after going above this trend line they are Moving down So will exit from I find position here for intraday trade We will Initiate our buy position at this level this was the 50% level And we will exit here We will make our another buying position when prices crosses this trend line Crosses above this trend line See this time precises crosses above this trend line And they are coming out of this bollinger band So It is a confirm signal of a buying signal We will make our buying position here and At this time our Primary stop loss will be Slightly lower than this trendline We can make our primary stop loss at the low of this candle Now This brown line is our trailing stop loss and we can hold our long position as well as prices are Above this Brown line and this pink line is above this brown line At This point .

You can see RSI is also above 50 level and RSI Is crossing above the 70 level so It is in the Over bought range as long as it is in the over bought Can hold our long position and we will exit when RSI crosses down this 70 level In this way we can employee our stop loss And it is like a safety net When trade goes opposite most of our Profit will be safe Stock market is not a place for timepass If you are not going to take your profit home then what is the use of investing in this market.

Paper Trading

Hello everyone in this lecture We will talk about paper trading.

what exactly paper trading is.

So basically paper trading is a tool that you can use to simulate the real world trading without using real money.

So it’s like using fake money but still simulating everything so that you can learn how to trade In real market.

So when you are doing trading, You can see here sell and buy panel You can rearrange it anywhere.

And if you want to buy the stock simply click on this option if you want to sell the stock simply click on this option.

This is quantity, you can fill the quantity shares you want to buy or sell.

You can increase or decrease the quantity and execute your order.

by clicking on these two options.

Let’s take an example suppose this is the hourly chart of Reliance industries and the stock was in downtrend But here at this point RSI I was giving positive divergence So if we want to buy the stock we will simply click on this option.

Then we will get the trading panel.

Now, in this trading panel you can see there are three types of orders.

The first one is market order.

The second is Limit order.

And the third is stop order.

So what are these orders.

What exactly does that mean? There are 3 ways to buy or sell a stock.

If you want to buy a stock at the current price level Suppose in this case, the price is trading at 1259.90 level So you want to buy the stock at the current level, you can simply choose the market order and buy the stock.

The quantity is 100 So your trade will execute at the market order at the current price level.

Now for this order you can also set your stop loss level and the target level Suppose in this case prices are taking support at this level and this is twelve hundred twenty seven level So we want to employ our stop loss level here.

So we will fill the value in the trading panel.

This was our position So here we can protect our position If we click on this option we will get our trading panel.

So stop loss level was 1227 So we will fill the stop loss level here and suppose if we want to make a profit at 1:2 R:R So we will select the tool from here.

This is long position This is a short position here we are buying the stock.

So we will click on long position and apply it on our buying point.

So this was our stop loss level This is our stop loss level We will select it at 1:2 R:R Now see risk to reward ratio is 1:2.

At 1:2 R:R, the level will be 1320 so we will fill the level in take profit and click on modify.

Now this is our buying point This is our stop loss level and this is our target level.

Now we can see this was our buying point and currently prices are below our buying point so it is showing the loss -8.09 it means here we are having a loss of $7 and if prices will go in upside above our buying point, it will show us our profit amount but currently it is showing the loss of eight dollar now this profit target level is at 1:2 R:R so we can simply change it by clicking it and dragging it from 1:2 to 1:1 R:R suppose we want to change it now our profit target is at the same distance of our stop loss level.

Now sometimes when we are in profit (if prices go in upside) suppose prices are trading near our profit level then we can simply scale out our trade and move our stop loss level from the previous level to the breakeven point.

So we will move our stop loss level from previous level to the next level.

So this is the first way you can do it.

Now let’s understand the other two terms, limit and stop.

Now suppose here we are getting a buying signal at the break out of this trend line and if we want to buy the stock.

But as the first candle was a green candle and we are expecting that prices will reach at this blue line only then we will buy the stock then we can simply choose the limit option.

If I believe that stock is going to decline up to this blue line then we can choose the limit option and this is the level- Rs 1246.

so we will click on buy option and choose limit order and fill our price here now this is our buy limit order.

When prices will reach here only then our trade will execute and I can fill my stop loss order and my target order.

Now sometimes when prices are going in upward direction but in upside there is a strong resistance level.

Suppose this is gap down opening so at this level there is a resistance level and we want to buy the stock only when prices will reach this level in upside so we can use the stop order this level is twelve hundred eighty four level so we can fill the level above this level.

Suppose we want to buy a stock at twelve hundred eighty nine level.

We will choose stop and fill the level here.

It means this is our buy stop level when prices will breach this resistance level only then our order will execute and at this point our trade will execute.

But if prices are not able to breach this level in upside then our buy trade begin here.

You can also choose your stop loss level and target level for these orders while placing the order.

Suppose I’m placing my buy stop order at this level at twelve hundred eighty nine level so I will click here at stop and fill my order here.

Now I want to employ a Stop-Loss level slightly below the resistance level and I want to take profit at this level.

Now you can see this is my buy stop level.

if prices will go in upside breach this level in upside, Only then my trade will execute and you can see for this buy trade stop loss and profit target level Are the virtual levels, they are not showing clear once your trade will execute at this level then stop loss and profit target level will execute for your buy trade.

Similarly you can fill the values of stop loss level and target level for the limit orders.

So these are the three types of trades.

First is market order in which we buy or sell the stock at the current market price.

Price is trading at this level and I have bought the shares at this level at the current price level.

Second is buy limit or sell limit.

if you want to buy the stock at discount then we can use buy limit order.

Buy stop- If we are bullish for the stock but there is a resistance level in upside.

We can place our buy stop order above that level.

If prices hit that level only then our trade will execute.

similarly the same thing will apply to sell orders.

if prices are going down And if we are bearish about the move then we can simply click on sell option and sell the stock.

We can choose sell limit and sell stop order in that case also.

So these are the three types of orders.

When we buy a stock in market order we buy the stock at the current market price.

For limit- we buy the stock below the current market price level.

For stop- we buy the stock above the current market price level so that is how you place orders while paper trading on tradingview platform.

Thanks for watching the lecture, I’ll see you in the next lecture.

Common Mistakes

Welcome to module 2 In this module we will understand challenges that everyone faces while trading First step to make profit is to save yourself from loss So if you want to make money from trading we should be aware of some mistakes that we generally make while doing it Most important thing in trading is to stay disciplined Weather it is short term trading or long term trading Never open or close your position until you have confirmed signal people Generally get wrong feeling about the market while watching the current scenario And predicting the future Rather The correct approach in reality is to Properly analyse the situation and understand what is going on When you make the predictions you should always have some solid reason behind that Let’s take an example You want to trade a stock And its price is $5 In the next minute it goes to $6 then 7 Next minute goes to $10 Now would you like to buy the stock Your answer will be probably yes Why not Because it is rising and you can make so much profit from it The real problem in the situation is When you buy the stock is 15 And in the next minute it fall down to $12 In the next minute fall down to $11 then 10 and $9 What will you do in this situation Majority of people will say that I didn’t expected that it will fall And I have suffered this loss to 6 dollar Let me just close my position and save myself from more loss Now there are two things to learn from the situation First is Never open up your position At wrong time Which was in the middle of the trend in this case Second thing is Never close your position at wrong time due to fear As you did in this position It was ok to close the position if you are confirmed that price is going to fall more and more For this we should analyse the position and who knows That stock may start rising from the next minute there is one more problem with people that when I want to sit in front of the system they can’t stop themselves to do some trades And this inducement leads them to heavy disasters Generally the situation is that you just close your position without taking maximum possible Returns When we have taken a huge risk why do we get back with some small reward Minimum risk to reward ratio 1 is to 1 so If you are taking risk of hundred dollar You should expect a minimum profit of 100 hundred dollars to This is another huge problem with most of us face Let’s say you are getting a profit of $50 And If you remember the last case we have taken a risk of hundred dollars Now you are thinking that you will wait for this $50 profit to become a minimum of $100 Because it is the minimum you should expect for taking that risk Now at this Particular point of time you are correct You should wait for the amount which you deserve for taking that risk But the problem is that the things always don’t go the way they should Let’s assume in the next minute this $50 profit become a $10 loss Now Whenever you will do it trade there is a great possibility that this loss will affect you And you will always withdraw from your position earlier Now just imagine This thing can also going vice versa When That $50 become $200 profit Let’s assume that you are doing a new trade And New same 100 dollars risk And same $100 profit You should be expected Let’s say you are getting that hundred dollar profit but the problem this time is You will not be willing to close your position due to your last trade When you got $200 profit Even if you are getting some indication that You can suffer loss But you will not close your position And you will try to get Same amount of profit Which you Got in the last trade Only the people who have gain control over fear and greed emotion Can think rationally Generally It is seen that many traders trade to get in cliened to do majority of trade as bulltrades or Bear trades they become either bulls or beers and tend to stick to it ir- respectable the market condition If we want to succeed in trading in stock market can’t stick to one kind of tradewe As we have to change our Outlook along with the changing Trend And follow different strategies in different market condition Our trade should always be in the direction of the trend In case of Bull trend Instead of focusing on selling at high We must focus more on Buying at support After a positive Trigger is achieved

Real Time Examples

Yes Bank

Now in this lecture we will try to draw some support and resistance line for our previous stock in Yes Bank in which we have tried to find out the current trend of the stock and I mentioned that the trend of the stock is downtrend.

So we should focus on only short positions.

So here this was the resistance level for this stock and entered in my short position here because the stock was struggling at this resistance level and it was not able to cross this level in upside That’s why when I got a selling signal in this stock I entered in a short position and currently it is nineteen hundred dollar profit in this stock.

So let’s try to understand how to draw support and resistance level for a stock or an index.

First of all we should know about the look back period when we draw support and resistance levels so if we draw these levels for short term perspective positional trading then we should draw the levels on weekly and daily chart and the look back period should be at least three to four years.

And in this chart see this is the daily time frame and we see the previous data of three to four years.

Then you can see that near our current position there is no support or resistance level There is no price action in three or four years.

That’s why we will see the price action near our current level And we will draw the support and resistance level and for this stock.

So let me delete these levels we should draw horizontal support and resistance lines with the peaks or low of the swing.

See this is a swing and this is the peak of this swing.

So our first resistance level will be the high of this peak and then we will see other peaks or lows that are touching to our this level this support or resistance level So if we draw this line here these three highs are touching the line.

That’s why I’m choosing this level And we will see if more candles are touching this line or not.Now see this line is not touching the high or lows of the swings that’s why this is not a correct level.

Then we will see other level this one because this is the low of this candle and this is the low of this candle But as we can see there are clusters of candles here so many clusters.

That’s why we will draw the line on weekly timeframe you will study in the later lecture 3D charting for positional trading is weekly daily and hourly.

So we should draw the support and resistance level on the high timeframe of the 3D charting that is the weekly chart for positional trading.

So we should draw the support or resistance level on weekly chart.

Now you can see there is a very clear price action and we can analyze the chart very easily.

Now see this is the low of this swing and candles are taking rest on this level.

Here we can see a price action at this level.

And these candles are struggling at this level here also so and you can see prices are taking rest at this line.

So this our resistance or you can say support level Now currently when prices were above this level so this was our support level.

And this blue line was our resistance level.

How we drew this level see in the previous price action this was the high of this swing and here candles are resisting this level and see this level is acting as a resistance level for these candles.

So this level was very important.

level that’s why prices have resisted this level.

And there was no price action above this level prices were not able to cross this level in upside and we have seen a very sharp down move in the stock and prices are trading at forty one point ninety rupees.

Now as prices are trading below this level so we will draw one more level one more support level and try to find out the next support zone for the prices for this.

We will see the price action and previous data now see now see this level is the low of this candle and this is the high of this short swing.

So we will draw a line that is joining these two levels.

And you can see this level is the same level the high of this short swing is the same level on which this candle is taking support.

So from the past data we have got one more support level near our current position and you can see today there was a fall exactly up to this level forty one point twenty level.

And this Upper Black Line was the high of this swing.

You can see prices are resisting this level in upside and then prices are taking support at this level.

Yes Bank 3D Charting

Welcome back everyone on this lecture We will see how to make use of 3D charting for each trading prospecting on our previous chart Yes Bank As we know 3D charting for long term positional trading is monthly weekly and daily.

And for short term perspective it is weekly daily and hourly and for intraday trading it is hourly, 15 minute and five minute.

So let’s choose the short term perspective because this is trading perspective that most traders use and for short term perspective the 3D charting is weekly daily and hourly First of all we’ll open the weekly chart and draw all the support and resistance levels on weekly chart how to draw the support and resistance level on weekly chart that I have discussed in preious lecture.

So for this stock these levels were the important support and resistance level this blue line acted as important resistance level.

And this is important support zone for the prices as this zone is near 1.414 level of Fibonacci grid So this is the level you will learn about Fibonacci in later section.

But now you can see this zone is the important support zone for the prices and this is the important resistance level.

Then we will go to middle time frame chart That is the daily chart.

For this trading perspective and on little time frame chart we will draw the trend line for the stock.

We should now draw the trend line on high time frame chart.

On weekly chart we should draw only support and resistance level but trend line should be drawn only on middle time frame chart or lower time frame chart.

So in this case the middle time frame chart is daily chart so we will draw trend line on this chart.

So this was the uptrend line for the stock and when there was a consolidation at this line prices were not able to go in upside.

Then we have seen a sharp downtrend a sharp downfall in the stock and this is the primary downtrend line for the stock.

But as prices have fallen very sharply.

So we will draw another trend line that is called internal trend line for this down trend for this sharp down move For for this downtrend this was the downtrend line.

This upper line and prices have traded in this range.

In this down move and currently there is a sideways strand for positional trading perspective and prices are trading between these two levels.

So when prices are trendless or range bound we can’t draw our trend line for the current trend.

And this was our last down trend line.

That is the Internal trend line and this is our primary downtrend line for this stock.

Now what is the use of hourly chart in this case.

As our 3D charting for position perspective is weekly daily and hourly so on daily chart we will get our trading signals with the help of all the indicators.

How to get the trading signals with the help of different indicators that you will learn in the later section So on hourly chart record the trading signals from different indicators.

Now if we choose the trading perspective for intraday trading our 3D charting for intraday trading is hourly, 15 minute and five minute so on hourly chart we should draw the support and resistance line as our support and resistance line are these lines.

For intraday prospective our look back period should be at least six to eight months.

So if we want to draw support or resistance line for intraday trading then you can see this is the important level as this is the high of this swing.

Prices are taking support at this level and prices are resisting this level here.

Prices are taking support on this level.

So this was our important level and see prices are taking support on this level.

There was a price action at this level and when prices breached this level in downside we have seen a sharp downfall in the prices up to our next support level.

Now for intraday trading we should draw the trend line on middle time frame chart as the middle time frame chart is 15 minute chart so we should draw the trend line on 15 minute chart for intraday trading perspective.

And our look back period should be at least six to eight months so for intraday trading you can see this was the uptrend And I have drawn the uptrend line for this up move.

Then there was a sideways movement in the stock and now prices are in downtrend on 15 minute chart.

So we should focus on only short positions.

But as you can see this is the downtrend line this blue line is the downtrend line and prices are very far from this line.

That’s why here we shouldn’t enter in a short position.

I’m expecting a consolidation in the prices or a small pullback in the prices because prices are trading very far from this trend line so for intraday trading on five minute chart is the lower time frame chart On five minute chart We should get our trading signals with the help of different indicators and see this is the five minute chart.

And when there was a consolidation at this resistance level.

Here we could enter in a short trade with the help of different indicators and now currently prices are consolidating at this level lower level and we can see a pullback in the prices up to this upper level.

So in this way we can make use of 3D charting for different trading perspectives On higher time frame chart we should draw support and resistance line On middle time frame chart We should find out the current trend we should draw the trend line and on lower time frame chart we should get all the trading signals where to enter in a trade where to exit with the help of different indicators and how to get different trading signals with the help of different indicators that we will learn in the later section.

Thanks for watching see you in the next lecture.

So this level is an important level.

And the next support level is this.

So in this sideways movement currently you can see prices are trading sideways.

So in this sideways movement this blue line is the important resistance level and this is the important support zone for the prices.

So as this was a sharp fall in the prices so we can see a small consolidation at this zone so in this way we can draw support and resistance level as well as support and resistance zone.

We draw the level that is joining most of the highs or lows and if two levels are very close to each other then we get a strong support or resistance zone as in this case we can see this is the strong support zone as these two levels are very near to each other.

Similarly we can draw support and resistance level for all trading perspective for intraday trading we should draw support or resistance level on hourly chart or 15 minute chart For positional trading we should draw the levels on weekly or daily chart and for long term investment.

Yes Bank Moving Average

Now in this lecture we will see how to get the trading signals with moving average set for a chart for different trading perspective and for positional trading our moving average set should be 50, 21 and 14 EMA.

So I have applied all these EMAs on the chart and our chart should be the hourly chart as this is the lower time frame chart of our3D charting for positional perspective.

So on hourly chart as the stock is in downtrend.

This is our previous stock Yes Bank So we get a short sell signal when fourteen and twenty one period moving average are below the 50 period moving average.

See this is the bearish crossover where short term period moving average that is the 14 period moving average is below See this is the point now here this red line.

This 14 period moving average is below the twenty one period moving average and twenty one period moving average is below the 50 period moving average.

So this is the bearish crossover we got our first selling signal here at this point let remark this point.

This is the point where we got our first short sell signal in the stock after the confirmation of downtrend and see as long as this moving average crossover is giving us a selling signal we can hold our sell trade and here see here we are getting an exit signal because this 14 period moving average is crossing above the 21 period moving average.

So this was our exit signal again here see this was the bearish crossover and here we are getting a short sell signal in the stock.

So this was our second signal.

For positional trading perspective and as long as moving average set is giving us a whole signal.

This 14 period moving average is below 21 period moving average We can hold our trade and here 14 period moving average is crossing above twenty one period moving average so we will exit here then.

This was our third sell signal in the stock short sell signal and see here we are getting an exit signal.

So our short sell signal was at one hundred eleven rupees and our exit signal with the moving average set was ninety two point ninety rupees.

Now again here we are getting a short sell signal.

But see this was a gap down opening and moving average set is giving us a short sell signal at this red candle so as this was a very big gap.

So we shouldn’t trade this signal because moving average set is very far from our current position.

That’s why we should wait for the another fresh signal in the stock and after this signal again we are getting a short sell signal here.

And this was our next short sell signal.

This candle and this was our previous signal and see after this short sell signal prices are going in downward direction.

And here we are getting an exit signal when 14 period moving average is crossing above twenty one period moving average In this way we can get the trading signals with the help of moving average set on lower timeframe chart.

So if we apply this moving average set for the prospective of Intraday trading then our chart should be five minute chart because that is the lower time frame chart of our 3D charting for intraday trading.

So if we apply this set on our current position.

So this is our current position.

So for 5 minute timeframe our moving average set will be 20,10 and 5 So this is 20 period moving average and this is 10 period moving average and this is five period moving average now for intraday perspective here we are getting a short sell signal with the help of moving average set This is our let me change the color of this line so this was our first short sell signal and then there was an upmove Here we are getting an exit signal then this was our second short sell signal with the help of moving average set and then this was our next short sell signal in the stock.

And there are so many signals for the intraday perspective.

And with the help of this EMA set we are getting different trading signals in the stock now currently as you can see prices are in downtrend because both the moving averages are below the high period moving average that is the twenty period moving average in this case and see there is a bullish crossover So here we will not short sell the stock because moving average set is not giving any short sell signal it is giving a buying signal in the stock So if we see all the trading signals on daily chart these pink lines are the trading signals on intraday chart.

And these blue lines are the trading signals on hourly chart for the positional perspective.

See our first signal this is our second signal on 6th of June.

This is our third signal on first of July and this is our fourth short sell signal on 30th of July.

And this is our fifth short sell signal on 19 of August so always apply different indicators to get trading signals on lower time frame chart of 3D charting.

In this lecture We have learned how to use EMA set to get trading signals.

In the next lecture We will apply MACD on this chart and see how to get trading signals with MACD indicator.

Yes Bank MACD

In the previous last we have applied EMA set for trading signals.

Now we will apply MACD to this chart and see how to get trading signals with MACD indicator.

These were the short sell signals with moving average set on hourly chart for position perspective.

And we will see how to get trading signals with MACD indicator Now see this was our first trading signal with EMA set and this was the bearish crossover and MACD is also giving a cell signal here at this candle And this was our second short cell signal with the moving average set Actually it was here because we are getting a bearish crossover at this candle.

And here EMA set is also giving a short sell signal at this candle.

Because these both the lines are going below zero level and the trend is downtrend so we can enter in our short sell position as soon as we get a bearish crossover MACD indicator and both the lines going below zero level.

Now this was a third short sell signal in this stock with moving average set and see MACD is also giving a short sell signal at this candle This was a the bearish crossover and both the lines are going below zero level at this candle So it was a confirmed signal with the MACD indicator and this is our next short sell signal with the moving average set at this candle and MACD is also giving a short sell signal at the next candle because these lines are going below zero level.

And here we are getting a bearish crossover in MACD.

So this was our short sell signal with MACD indicator.

So MACD is also a very good indicator to get trading signals but we should know about the current trend and both these indicators are the trend following indicator.

So these indicators give us accurate signals only in our trending market.

In Sideways Market these indicators are ineffective and we shouldn’t use these indicators in arranging market.

Now if we try to find out the trading sentiments on MACD indicator see this was uptrend and MACD is above zero level.

Most of the times and this was a sharp down move sharp fall in the prices and MACD is below zero level most of the times.

Now currently with moving average set here we were getting a short sell signal with moving average set and MACD was giving a short sell signal here at this candle So in this way we can combine different indicators to confirm our position and by combining different indicators we can confirm our entry position.

I always suggest to add three or four indicators on the chart to confirm our position because these indicators we get multiple confirmation.

If all the indicators are giving same signal then we should enter in our position.

And if we get contradictory signals with different indicators then we should skip that trade So in the next lecture we will see how to get trading signals how to confirm our trade.

With the help of RSI indicator.

Yes Bank Analysis - Fibonacci R/E

Welcome back everyone.

Let’s try to apply Fibonacci tool on our current stock that is Yes Bank.

first of all we should apply Fibonacci tool on higher time frame chart of our 3D charting For position trading our charting is weekly, daily and hourly so we will apply if Fibonacci on weekly timeframe As we all know that the current trend for yes bank is downtrend.

In downtrend we get swings from high to low we get the lower highs.

See this was the first swing this was down move and this was a pullback rally so this was our first swing of this downtrend then this was our down move and this was a pullback rally so this was a second swing of this downtrend So in this downtrend we have two swings and if we apply Fibonacci for this swing this first swing from high to low you can see this pullback rally was up to 50 percent level ok this is 50 percent level and there was a consolidation near this level and 50 percent level acted as a resistance allowing for the prices for this swing then to know the Fibonacci extension level in this case extension levels will be the support level so to know the extension level we will just iinterchange the points of Fibonacci tool so.

This is the low of this swing and this is the high of this swing this is the wick of this candle the high of this swing and this is the low of this candle so these are the Fibonacci extension level see this blue level is our resistance level and this is also 1.272 level of this Fibonacci extension grid that’s why this level acted as strong resistance level for the prices.

In the previous lecture where we do horizontal support and resistance level for this stock this was our resistance level because there was a huge price action at this level see this is the high of this swing and this is the high of this swing the same level is the high of this swing and this level is also 1.272 level of Fibonacci grid that’s why this is very important resistance level for the prices and as long as prices are below this level we shouldn’t expect any up move in the prices.

And the next level that is 1.414 level is this level That’s why we have seen our down move up to this level there was a consolidation at this level and today we have seen our down move exactly up to this level.

So these two levels are the most important level for this price action and currently prices are inbound and trading between these two levels.

Now for intraday trading perspective.

our higher time frame chart of 3D charting is hourly chart so we should apply Fibonacci on hourly chart for interaday trading perspective.

For intraday trading see This was the uptrend and then prices are going downward So we will apply Fibonacci to this uptrend to know about the retracement level support level for this uptrend so if be apply Fibonacci from low of the trend to the high see this level is very near to seventy eight point six level of this up move so here we are getting one more level near this level That’s why this support zone will act as strong support zone for the prices for intraday trading perspective and I’m expecting a pullback from this zone.

If anyone wants to make a buy position in this stock for intraday trading perspective we can apply the stop loss below this support zone slightly below this support zone near thirty nine point thirty level and for this down move prices are in downtrend So if we want to apply Fibonacci for this downtrend we should apply Fibonacci from high to low and for intraday trading perspective.

See this was 50 percent level we have seen our consolidation at this level and it was sixty one point eight percent level So we have seen a gap down opening near this level and this was twenty three point six percent level See there was a price action at this level.

Here prices are taking support at this level.

Here prices are resisting this level And when again there was a breakdown of this level.

We are getting a sharp downfall in the stock up to seventy eight point six percent level And this was thirty eight point two percent level Also we have seen a price action at this level.

So for intraday dating perspective these levels are very important level and currently prices are trading below all these levels so these level will act as important resistance level for the prices.

And if we want to trade the stock for intraday trading perspective on five minute chart then we should see all these level as our target levels so if we apply RSI on intraday chart see there was a positive divergence near this support zone see it was a positive divergence and currently RSI is trading above 50 level.

So if anyone wants to go long in this stock then the first target level will be this level forty seven point eighty level and the next target level should be 54 level and we can place our stoploss level slightly below this support zone.

Yes Bank Analysis

This is the 3rd of March.

And in last few lectures you are analyzing the chart of your span.

So in December 2019, when you spent was trading here near this red level, I suggested to trade in your span for intraday or swing trading perspective because the stock was rangebound.

And for this range this was the longest swing for this sideways range.

And I suggested to look for these levels for intraday trading.

And let’s analyze the chart after this level.

So let’s analyze the chart from here.

See, this was the resistance level and prices registered this level and one, there was a momentum in the prices.

See the candle.

The green candle is a mariposa candle and it was a momentum move in the stock and there was a sharp move in the prices up to the next resistance zone.

This was the next resistance level and after adjusting this level, there was a down move in the prices up to this support zone.

Then prices resisted this support level because prices were trading below this level.

So this level became a resistance level for the prices.

And after a distinct two times this level, there was a sharp down move in the prices up to the next support zone.

And then prices were resisting this support zone.

It also prices registered the support zone and then again, prices fall down up to the next level.

And this red level is 88% level of this Fibonacci grade.

Then there was a sideways movement in the prices between these two levels, and now prices are trading below this red level and there is no support level below this level.

So this is the low of this swing in which prices are trading sideways.

So the next support level will be the low of this swing and this is 29.05 level.

So the next support level will be this upper level, 29.05 level.

Currently, prices are trading above this level.

So you can expect that prices will take support on this level.

So these levels were very important level for intraday perspective.

So with stock trading strategies, we can trade the stock for intraday trading or swing trading perspective by using these levels because prices are respecting these levels.

So with the help of other indicators, we could make our positions in this stock and these levels were very helpful levels for us for intraday or for swing trading perspective.

So currently prices are trading below all the levels.

So the next support level will be 29.05 level and the resistance level is 34.9 level.

AAPL Analysis

Welcome back everyone.

Now in this lecture we’ll analyze the chart of Apple incorporation for the perspective of long term positional trading as we know for a long term positional trading our 3D charting is monthly weekly and daily.

So first of all we’ll analyze the monthly chart and find out the possible support and resistance level as we know.

moving average act as dynamic support level So we will apply different moving averages to this stock on monthly timeframe and also draw trend lines upper and lower trendline for this stock to know about the range of the stock.

As the stock is in uptrend first of all we will draw uptrend line for this stock on a monthly timeframe chart To know about the dynamic support level for this stock.

So this is the uptrend line for this stock we will draw one more line that is the upper trend line to find out the range of the stock.

So these are the two lines lower and upper trend line and you can see the stock has a diverging structure.

It means both the lines are diverging and there is a lot of potential for this stock.

So we can invest in this stock for long term positional trading.

Now we will apply three moving averages that are hundred, two hundred and fifty EMA and we will try to find out the trade initiation zone that is the moving average on which stock take support every time and then resume its trend current trend that is uptrend in this case.

So these are hundred, fifty, hundred and 200 period moving average.

You can also apply simple moving average and see on which moving average the stock is taking support.

Now see here on 50 EMA The stock is taking support every time.

So this is the trade initiation zone for Apple incorporation.

This was our entry point.

This was our entry point and this was our previous entry point.

If you apply RSI indicator to this chart you can see as the stock is in uptrend RSI is above 50 level most of the times hence with the help of RSI we can find out the current trend of the stock.

Now see the stock is near its upper resistance line.

So this is not our fresh entry point.

We will wait in this stock till the prices retrace up to 50 EMA.

That is the trade initiation zone or the trend line because both are acting as dynamic support level for the prices.

So we’ll wait for the prices to touch either trend line or 50 EMA now we will analyze the daily time frame chart.

That is the lower timeframe chart for this stock for long term positional trading.

So this is the daily chart of Apple incorporation.

Again we will apply three moving averages 200, 100 and 50 And we’ll find out the dynamic support level.

That is trade initiation zone on daily timeframe so this is hundred EMA the stock is taking support on hundred EMA every time.

So we can make entry in the stock here we could make our buy position when stock was taking support on 50 EMA RSI is also above 50 level at this point.

So it was our previous entry point in this stock but now currently stock is very far from this moving average so we will not make any fresh entry in this stock.

We will wait for the prices to touch the 50 EMA that is the potential support level in this case and then WE can make our fresh entry in the stock.

Currently I’m expecting a retracement in the enterprises as RSI is also giving a negative divergence.

Microsoft Analysis

Welcome back everyone.

Now in this lecture we’ll analyze one more chart that is Microsoft Corp.

We will analyze the chart for the perspective of intermediate positional trading.

And for that perspective our 3D charting will be weekly daily and hourly So first of all we will analyze the weekly chart of the stock and we will apply three moving averages that are hundred, two hundred and fifty that we have discussed in the previous live analysis of Apple incorporation.

So for this stock hundred EMA is acting as a dynamic support level.

And this is our trade initiation zone.

Every time when prices take support on this EMA we can go long in this stock.

So this was our entry point and every time when prices take support on this EMA we can go long in the stock.

Now we will analyze the daily chart this is the daily chart for the stock and prices are in uptrend now you can see prices were in uptrend.

And then we got a cup and handle pattern in this stock.

See this was a rainbow moment.

This was cup and handle pattern.

Prices are range bound.

This is the resistance line.

This is the support level.

So when prices were range bound we got a cup and handle pattern, cup and handle pattern is a continuation pattern.

And we found a pattern in an uptrend and this pattern gives us a signal of continuation of the trend.

After the formation of cup and handle pattern prices are going in upward direction in uptrend and taking support on 50 EMA on daily time frame chart.

Every time when prices are taking support on 50 EMA we can go long.

This was our entry point and this was our next entry point and there were so many points where we could go long in the stock.

Now this is our trend line for the stock prices are going in upward direction.

So this is the uptrend line after the formation of cup and handle pattern.

we could go long in the stock every time when prices are taking support on this trend line So this was our first point.

Then second and third this is fourth and fifth and sixth and this is seventh point then at seven points on this trend line and these seven points were our entry point for the long position for intermediate positional trading now prices are very far from this trend line and we will analyze this current portion.

See this was our previous entry point when prices were taking support on this trend line.

I have apply Fibonacci tool to this last swing.

So this was our previous entry point moving averages and also giving us a buying signal RSI is above 50 level and MACD is also giving a bullish crossover So this point was our previous entry point for the intermediate positional trading on daily chart Now currently prices are going in upward direction and I’m expecting an up move upto next to resistance level But our fresh entry point will be when prices will retrace up to trend line or 50 EMA.

But those who are already long in this stock can hold their position up to next resistance level.

That is 1.272 Fibonacci extension level and 76.18 level but this time is not for the fresh entry.

We should wait for the prices to retrace up to the extent of trend line.

Live Analysis

Hello everyone and thank you so much for giving me such a good response I got a lot of good reviews that encourages me to make other new courses Also I got your suggestions that were very useful to improve my course Your feedback is very important for us So please keep on giving your valuable feedback and suggestions Today in this lecture we will not analyse a single stock Instead we will analyse the current position of 4 stocks that I have used in my course First of all you will analyse the chart of ICICI bank and Infosys About which we discussed in 8 module naming technical indicators On 21st june 2017 IBN was trading at price $8.91 And I told that we are getting a negative divergence here And the stock is moving near the upper resistance line of its range So it may fall to the extent of trendline Then only we can buy the stock This was our last position of the chat now we will analyse the current position of this chart This is IBN chart and this was our last position Now analyse the portion after that day so I will zoom in the chart Now see This was the point where IBN was trading and this was the level 8.91 This was the candle by watching carefully we can Say that This was the high range of the stock and the stock was moving Near its upper resistance line and near its High This was the all time high of the stock And we are getting a negative divergence here Also we can see We are getting a Head and shoulder pattern here Short term Head and Shoulder pattern And this was the neckline of this Head and Shoulder pattern this was the neckline And After the breakout stock is falling to the extent of trendline also It achieve the Head and Shoulder target level This was the Head and Shoulder length and this was the target so it achieve the head and shoulder target then It crosses above the trend line and it Rises again so this was our ultimate buying position This was not the buying position and this was our buying position now the stock is again Moving near this resistance line And we are getting a negative Divergence here Again we are getting a negative divergence on RSI.

this is the Negative divergence So we will not buy here Again When it will touch the lower trend line That is a support line we can buy this stock our second stock was Infosys It was in short term uptrend and we could buy the stock because it was touching the trend line, lower trend line So it was our buying position Now we will analyse the current position of the chart it was 28th June 2017 This is our last chart and this was our position 28 June And here we could buy the stock because it was touching the trend line support line And after that The stock is moving in a up trend, short term uptrend after touching this level this was the resistance Level 15.94 so we will draw the horizontal line And this is a support line if we zoom out the chart we can see Now the stock is Moving in a range This is the range of the stock Stock is moving in these two lines This is the upper line resistance line and this is a support line the stock is moving in a range This was the short-term uptrend Now after taking this resistance line the stock is touching the support line And it is going in an uptrend near its resistance line We just draw the short term trend line we can see the stock is in short term up trend But as It is near its Resistance line we will not Buy the stock it can come back to the extent of trendline or After touching this line it can Come back to this support line We can see here as the stock is in range RSI is not going in oversold range and or overbought range We can make use of RSI in this range Whenever RSI is touching the resistance level we can sell the stock And when RSI is touching this 30 level we can buy the stock In My first live analysis of Apple Incorporation On 20th August I said not to buy the stock at that level Because it was a in between trade and We were also getting a negative divergence on RSI this was our last chart This was the chart and this was the in between position as the stock is moving near its resistance line This was the resistance line now will analyse the current position of the chart This is Apple incorporation chart and this was our last position on 21st of August let me zoom in the chart And now we will analyse the situation of the chart This was our point And we were here At $157.12 Now see After touching the $165 level the stock fall down to the extent of trend line this was the trend line And this is moving average 100 period moving average the stock has retraced up to the trend line and this moving average If we Calculate the Fall The price has made a fall of 9.54 percent price is struggling at this trendline or Moving average After Getting a break out here we are getting a breakout Here here also we are getting a break out now This is our buying position And we could also Buy here With a stop loss at the low of this green candle So this was our potential entry point for the stock And we can see now it is rising in an uptrend Now it is moving Near its Range line this was the Upper line resistance line And also stock is getting a negative divergence here So our next position will be next Buying position will be When price will come down to the extent of trend line or this moving average in my 2nd live analysis on 13 September I analysed the chart of Microsoft Corporation And it was trading at 74.68 level it was Also getting a negative divergence as price was rising and it was also a in between trade I suggested To wait for the retracement When price will come to the extent of trendline this will be our Buying position This was our last chart and We were here On 13 September Now You can easily see this was our resistance level prices are going to test this resistance level but unable to cross this resistance level And they are going back to this trend line to the extent of retracement now this was our Potential buying point we can buy the stock here with a stop loss at the end of this candle and Stock is moving in an uptrend Again this is the in between position Price May come Down to the extent of Retracement this trend line then we can buy the stock If we add bollinger band To the chart then we can see this is the Bollinger band now the upper line of Bollinger band and and lower Line of Bollinger band are coming Close So the stock might move in a range Between these two lines and then It may come to the extent of this trend line that will be our Potential buying point Thanks for watching the lecture.

Live Analysis NIFTY 50

Hello everyone and welcome again to EWTA.

First of all thank you so much for your great ratings that encourages me a lot.

Today I got a five star review on my second course from one of my students in which he was saying that he made a 58 percent return in a single day by selling nifty as he adopted one of my trading strategies.

I was really glad to see his review.

And ultimately got an idea of making a live analysis on Nifty50 because Nifty is not a single stock it is an index made up of 50 blue chip companies and every movement in Nifty always has a big impact on those stocks movement.

So in this live analysis today we will analyze the chart of Nifty and try to predict the future movement of nifty on long term as well as short term basis.

First of all we will analyze the weekly chart of Nifty to see the long term movement of Nifty.

This is the weekly chart of Nifty.

And as you can see Nifty is in uptrend and it is respecting its 200 week moving average every time.

Let me zoom in the chart now see this was the last ultimate buying point of Nifty when prices retrace up to the extent of this 200 week moving average.

Here this was our last swing and if we applied the Fibonacci trade to this swing this way we can clearly see that nifty retrace up to the level of .50 of Fibonacci trade.

Will mark this level just see Nifty Exactly touch this level 50 percent retracement and then capture its uptrend.

Now we will interchange the points of Fibonacci level and will see the resistance and support levels for nifty.

Now see this is 1.618 resistance level of Fibonacci and currently Nifty is moving above this level will mark this level.

This is 10303 level and Nifty is moving above this level.

So this is acting as a strong support level for Nifty on long term bases.

Now we will analyze that daily chart of Nifty.

This is the daily chart of Nifty and this was our consolidation phase up to the .50 level Fibonacci grid.

Here we can easily see that Nifty is in uptrend and here Nifty made a cup and handle pattern this is a condemnation pattern so after the break out of this level Nifty gains its uptrend.

Now we will draw a uptrend line for Nifty we just join the two initial points of Nifty and we can see this is the trend line for Nifty.

This is the uptrend line Now we will apply the 50 hundred and 200 day moving average to noti z for Nifty here we can clearly see that Nifty is respecting is 100 day moving average.

The red line is the 100 period moving average.

So Nifty is respecting it’s a hundred day moving average and this hundred day moving average is moving parallel to the trend line so the TIZ of Nifty is 100 period moving average and we will buy Nifty when it will touch the trend line or this hundred day moving average.

Now we will analyze the current position of Nifty for this we will zoom in the chart.

This was the last retracement for Nifty so we draw the down trend line for this retracement.

This was the down trend line.

And after a break out on this down trend line Nifty made a up move up to the level of 11175.

Now Nifty is in retracement phase.

So if we applied the Fibonacci grid to this level to see the support levels for Nifty we can see currently Nifty is taking support on .38 level of Fibonacci.

And the next support level is ten thousand six hundred level.

That is also a 50 day moving average So we expect a retracement up to this level that is 10621 level.

This is the 50 day moving average level.

And this was the post-budget impact on Nifty that was announced on 1st February.

This is 1st February and after the announcement of budget by Indian government Nifty fall down up to 38 percent level Fibonacci grid in just two days.

These are the two candles two day candles.

And Nifty had to retrace up to the .38 level of Fibonacci because it was the impact of budget.

But here is one most important question that is this retracement only a post-budget result or we were already getting any signal of retracement on chart.

To find out the answer we will choose the hourly time frame.

Now.

So we will set the chart on hourly time frame.

See this is hourly chart of Nifty.

And now we will draw a uptrend line for Nifty for short term trend.

This is the uptrend line of Nifty.

And here we can clearly see that Nifty cross down this uptrend line of hourly chart.

This was the short term trend.

And also we are getting signal here of retracement when 21 period moving average crosses down 50 period moving average here.

We get a signal of selling.

So we are getting a buying signal here and we are getting a exit signal here.

Also if we apply the RSI and MACD to this chart we can see that MACD and RSI both were giving a negative divergence on Nifty because prices are going up.

But RSI and MACD both are giving a negative signal here.

So we were getting a lot of signal here exit from a long position.

Also if we notice here Nifty is making head and shoulder pattern that is sloping down.

So when Nifty opens cap down below this neck line we get a reversal signal of uptrend.

So there were a lot of signals that were telling us about the reversal of the short term trend.

And this is the real benefit of knowing the art of technical analysis as I told earlier is the most that market never crashes without giving any signal in advance.

And if we have a deep knowledge of technical analysis we can surely make profit in stock market.

Well for Nifty a level of hundred day moving average is very good buying opportunity but we can see a bounce back on 50 day moving average.

That is a level of ten thousand six hundred twenty five.

That is also a 50 percent Fibonacci trade level.

So one can buy here by executing a stop loss just below that Level but the ultimate buying point of Nifty is 100 day moving average that is also the trend line for the Nifty.

Advanced Concepts For Trading Short Term and Intraday Trends

Accumulation Distribution

Welcome back.

Accumulation distribution is a leading indicator and relates between the price and the volume of a security.

It is used to detect divergences between volume and price actions.

It measures the flow of money into and out of a security We can get Buying and selling signals from this indicator we can go long when we get a bullish divergence or positive divergence and we can go short when we get a negative divergence.

In this chart accumulation distribution is showing a positive divergence here prices are falling down but accumulation distribution is moving in upward direction.

So we get a bullish divergence we can buy the stock when this trend line breaks up and stop loss will be the last candle.The low of the last candle.

This will be a stop loss and we can buy here.

Here also we are getting a positive divergence as prices are falling down.

But accumulation distribution is giving up bullish divergence.

It is going in upward direction.

So again we can buy here when this trend line if you move this trend line in upward direction this is a like this is the downtrend line and we just buy here when this trend line is breaking and prices break this trend line.

This is our buying point and a stop loss will be the low of this candle this last candle.

Now see here we are getting a negative divergence as prices are not falling down but accumulation distribution giving us a bearish signal.

It is falling down.

So we can sell the security.

When prices crosses this line we can sell here and a stop loss will be this resistance above this resistance line.

And this way we can get early buy and selling signal by using this indicator.

Thanks for watching the video.

See you in the next video.

Stochastic RSI

Welcome back.

Stochastic RSI is an indicator of an indicator.

It applies the stochastic formula to RSI values instead of price values.

Stochastic RSI takes the high-low range of RSI for a specific time period and then uses the moving averages of that high-low range of that specific period.

For example a 14 day stochastic RSI uses the value of 14 day RSI and 14 day high-low range.

Then it calculates the three day moving average of that 14 day high-low range.

Stochastic RSI can be used to identify over bought and over sold conditions.

It fluctuates between 0 and 1 above 80 It is considered as over bought and below 20 it is considered as over sold.

As stochastic RSI is an indicator of indicators so it is a second derive indicator.

It can be used to identify the short term trading signals as stochastic RSI is an indicator of an indicator.

It can be used to identify the short term trading signals.

While trading for short term trend it is important to trade in the direction of intermediate trend.

The default settings are 14:14 3:3.

But if we are using the indicator for minor trends then we can change the setting based on our trading style and volatility of the stock.

This is the daily chart of Apple incorporation and if we see the chart is in uptrend so the intermediate trend of the chart is uptrend.

We are using the stochastic RSI for short term trading so we will said that chart to hourly time frame.

Now see this is stochastic RSI and now stochastic RSI is in over sold range.

We are getting a signal here so we can buy the stop here.

This is our buying position and then stochastic RSI is in over sold range.

Here we are getting a signal of selling because this blue line is below this orange line and it is crossing down this 80 line.

So we will buy here and sell here again stochastic RSI is in over sold range and we’re getting a buying signal here.

This is our buying point and now this is in oversold range and we are getting a selling signal here this our selling point.

In this way we can trade in short term time frame with the help of stochastic RSI.

When using stochastic RSI for minor trend and in short term time frame say 15 minutes or 1 hour it must be combined with any other volume based indicator.

We can combine stochastic RSI to chaikin oscillator to get better safe results.

We will learn about chaikin oscillator in next video.

Thanks for watching this video.

Chaikin Oscillator

Chaikin Oscillator was developed by Mark Chaikin and it is also an indicator of an indicator.

It measures the momentum of the accumulation distribution line.

Accumulation distribution line is an second derivative indicator of an on balance volume and Chaikin Oscillator is an indicator of the accumulation distribution line.

So Chaikin Oscillator is an third derivative indicator.

Chaikin Oscillator is the difference between 3 day EMA of the accumulation distribution line and the 10 day EMA of accumulation distribution line.

A change in momentum is the first step to change in trend.

So we can use Chaikin Oscillator to get early buy and sell signals.

It oscillates above and below zero line we can go long with the positive divergence and when Chaikin Oscillator crosses above zero.

Similarly we can go short when Chaikin oscillator is giving a negative divergence and crosses below zero.

As it is an indicator of an indicator.

So it shouldn’t be used alone to get trading signals.

If we combine stochastic RSI with Chaikin oscillator then we get a great result.

This is our last chart of Apple incorporation and we are using the hourly for getting short term trading signals.

As the intermediate trend of the chart was uptrend so we will ignore all sell signals and take only buy signals.

Now just notice prices are moving down here.

But Chaikins is giving a positive divergence here so we can buy the stock at this point when prices break this downtrend line.

We can buy here at the starting of this candle with a stop-loss at the end of this red candle.

Again we are getting a positive divergence here.

You can see prices are moving in a same line but Chaikins is giving a positive evidence here.

It is moving in opposite directions so we can buy the stock when prices break this down trend line at this point.

We can buy and stop us will be the end of this red candle.

Here we set the chart on 15 minute time frame and we just take the minor trend for trading signals.

We just take the minor trends for trading and we combine the stochastic RSI to chaikins oscillator and see how to trade for minor trends on 15 minute charts.

Now see here Chaikins is giving a positive divergence here because prices are moving down but Chaikins is moving in upward direction so we can buy here when Chaikins is giving a positive divergence and stochastic RSI is in oversold range.

We are getting a buying signal here.

We can buy here at this point.

This is the candle of our buying position and we can exit here when we get a selling signal.

Now stochastic RSI is in overbought range and we are getting a selling signal here.

So by buying here we can exit here.

Again Chaikin is giving a positive divergence because prices are at same level but Chaikins is giving a positive divergence so we can buy here because stochastic RSI was in over sold range and we are getting a buying signal here.

When Chaikins is giving a positive divergence we can buy here at this point.

This is a buying candle and we can exit here when we get a selling signal here.

So this was our buying point and this is our selling point.

Again chaikins is giving a positive divergence here.

This is the point and stochastic RSI is in oversold range and we are getting a buying signal here so we can buy here.

This is our buying candle and we can exit when stochastic RSI is giving a selling signal.

Now this is in over bought range we can buy here and this is our selling signal.

This is our selling signal.

This is a point we can buy here and sell here.

In this way by combining chaikin oscillator to stochastic RSI we can also trade in minor trends say 15 minute charts the signals are very safe and we can trade very safely in the minor trends also.

Thanks for watching the video see you in the next lecture.

Volume Weighted M and A

Hello everyone and welcome back to EWTA The volume weighted moving average is very much like to the simple moving average With exception that it is centered on the volume Recorded for a specific time period The trajectory of both the volume weighted moving average and simple moving averages Same but they are not mirror images because Volume weighted moving average underscores the volume but simple moving average factors the price of the security Simple moving average can be used as a benchmark for volume weighted moving average Vwma can be used for identifying current trend If the VwmaI is located between the price and the simple moving average Then it is a signal for a trending market Sometimes the Vwma test the Assamese as a support or resistance If the volume weighted moving average is below the prices but above the simple moving average Then indicates the current trend is bullish And if the prices are below volume weighted moving average But Simple moving average is above the volume weighted moving average then it is a bearish trend In this the blue colour line is volume weighted moving average and the red colour line is simple moving average You can see how Vwma reacts much faster than the simple moving average And as long as this Blue line is above this red line that is Vwma is above the simple moving average Then The trend is bullish It is in between the prices and simple moving average and trending up so the trend is Bullish In this way we can identify the current trend of a security Volume weighted moving average can help us for determining new trend When simple moving average is located between the price and volume weighted moving average It is the signal of trend reversal When prices break upwards Both averages then we can go long When prices breakdown to both averages we can go sure With the start of trend reversal the gap between the volume weighted moving average and simple moving average increases Also with the help of volume weighted moving average we can identify the end of a trend The gap between both averages decreases and after that they overlap each other This is the time to liquidate your position As it can be a starting of a trend reversal If simple moving average replaces the volume weighted moving average and doesn’t go back To its position It means this can be the end of existing Trend Now see this example This was our uptrend Now Simple moving average is above this volume weighted moving average red line is above this blue line So The prices are Moving upwards It is the time For liquidate our position Because it can be a Starting of trend reversal Now they are overlapping each other Here and When Simple moving average is Above this volume weighted moving average Now see here This blue line is below this red light So it is a Consolidating face As it is an uptrend so we will not Go short here And again we will wait for a buy position now see here Now this red line is below this blue line that is Volume weighted moving average now in between the prices and simple moving average We are getting a buy signal here And also you can see the distance between these two average increases and Now the distance between these two averages decreases and the overlap each other Now The volume weighted moving average is above the simple moving average And they are Overlapping each other but the prices are Below the both the moving averages So As long as the prices are below these moving averages we can go short The distance between the two This is not very much so we should be a little cautious here As prices Touch these averages We will liquidate a short position Volume weighted moving average can Used To Know divergence When we Vwma gives a negative divergence it is the signal Of starting of down trend And when Vwma Is above SMA and gives the positive divergence Its signals the starting of the uptrend Now You can see prices are in Upward direction but volume weighted moving average is giving a Downward direction So we are getting a negative divergence The setup of Vwma and simple moving average cannot be used alone to get trading signals Because it tells us about the increase or decrease of volume all But if we add this setup to other indicators then it will be very helpful For us to get trading signals Thanks for watching see you in the next video

Parabolic SAR

Welcome again in this lecture we will learn about parabolic SAR Parabolic SAR refers to a price and time based trading system In which SAR stands for stop and reverse It is a trend following indicator Once a trend starts up SAR on is also behave as a trailing stop The indicator is in the form of dots Appear above or below the current candle If the dot is above the candle it is a sell signal or downtrend If the dot is below the candle it is a buy signal or an Uptrend We mainly use parabolic SAR for the stop and reverse signal So When changes occurs in the position of dot As from below to above or from above tp below then it indicates a price reversal As a trend extends the gap between the dots increases Indicates that the price Momentum is high now and the trend is strong enough And when price is consolidating the SAR dots aew plotted close to each other Here we do not need to know the actual formula of any technical indicator We just need to know how it behaves In this chart you can see There are some dots they are Blow the candle and above the candles So If the dot is below this candle this is a Bullish candle And we get a buysignal And If the dot is above the candles So we get a Sell signal when dot changes its direction See Here the dots are below the candle and Now Dots changes the direction from below to above so it is a signal of trend reversal This is the bullish trend and now the trend is in bearish mode Now again The dot changes the direction Are above the candle now this dot is below the candle so it is a Trend reversal sign and now Trend is from bearish to Bullish During a downtrend These dots Acts as a dynamic resistance and during an uptrend These dotes Acts as a dynamic support level Parabolic SAR indicator generates Best signal during a Trending market But when the market is consolidating It would likely generate lots of fall signal Now see Market is trending so we are getting a clear signal here This is a downtrend market so we are getting a Bearish signal here But when market is in consolidation phase We are getting Fall signal Market is in bullish Trend Now this is the consolidating phase And we are getting a selling signal here but These are the two dots of buying signal again we are getting a three dots of selling signal so This will confuse us Now the question arises can we simply trade the dots everytime And the answer is no We should use other indicators with Parabolic SAR to avoid trapping in false signals Example we can use two moving average system MacD etc.

that tells us about the trend direction I am using the two moving average system And one is of time period 8 and others Is of time period 21 now see here moving average system giving us a buying signal here And also PSAR is giving a buying signal here Here we are getting The four dots of the bearish signal from PSAR but moving average is above Blue moving average is above this red moving average So will hold our position Again we are getting The bullish Dots So and blue line this 8 period moving average is above this 21 period moving average so We Hold our Long position As long as this blue line is about this red line We can hold our long position And here We are getting a Exit signal Also we are getting The bearish dots So we will exit from our long position here You can see then moving average is in Bearish mode and also we are getting a Bearish signal from parabolic SAR You can see when Trend extends This is the gap between the dots and Which is the starting phase of the Trend and as long as Trend extends the gap between the Dots increases This is the consolidating phase So gap between the dots Doesnt’nt increase here too The distance between the dots increases it means We can hold our position This is the Short position signals so we will sell here And we can hold our position Till the distance between the dots Decreases Here We get this candle is touching this dot this is our Dynamic resistance level so we will exit our position here I always use PSAR with SMI ergodic indicator Thanks for watching.

SMI Ergodic Indicator

SMI Ergodic indicator sometime recognised as true strength index indicator It is a variation of RSI It uses a difference in function to measure momentum And an averaging function to correlate that Momentum to the price Trend In this way this indicator combines the leading characteristics of momentum function With the lagging characteristics of an averaging function The SMI Ergodic indicator signals similar trend as does the Mac D crossovers But it is a bit faster And gives more filters signal that Mac D The default setting for this indicator are 20,5 and 10 But we can change the setting of signal line to get smoother signals When blue line is above the orange line the orange line is the signal line and the blue line is a short period Line so when blue line is above the orange line we are getting a buying signal This is our buying candle And we will exit when this blue line Crossing down this Orange lines So this is our exit position We can buy there and we will exit here Now this Blue line is Below this Orange line we are getting a sell signal here So this is our selling candle and We are getting Are buying signal here or we can exit from a short sell position here This is our Exit position We will sell here and exit hair Now if you notice the This is the daily chart and our current trend is down Trend So we will take only Sell position here because the current trend is down Trend And we will ignore all the buying position here we will Set the chart on hourly time frame And add parabolic SAR to this chart now see here We are getting a Selling signal here when this blue line is below this Orange line And also We are getting a selling signal here from parabolic SAR now see here This is the first dot and we will initiate a short sell position On second dot When we are getting a Second red candle we will Sell here Now This blue line is crossing about this Orange line so we will exit Here We will sell here and exit at this candle this green candle Again we are getting Selling position When this blue line is Below the orange line and also we are getting a selling Position With parabolic SAR We already getting a selling position here so we will short sell our stock on this red candle Now when blue line is above the orange line we will exit from our sell position now see here This is the portion of consolidating phase And we are Getting a buying signal from SMI Ergodic blue line about this Orange line but we are getting a selling signal from parabolic SAR So we will avoid this situation We will not Take any trade here We can take counter trend position here if we are getting Similar signal from both the indicators Here SMI is Giving a bullish signal Parabolic is also giving a bullish signal so we can Buy here by buying here this is our exit point So by buying here we can exit here this is the second candle but This is a counter trend positions so By buying here And exiting here We are not getting any reward That’s why We should only trade in the direction of the intermediate Trend Instead of taking position on every signal We should concentrate only on the signal about which we are quite confident For this We can add chaikin oscillator to this setup

Super Trend

Super trend is a trend following indicator.

It measures the trend direction but not the strength.

It gives excellent buy and sell signal in a trending market.

When price crosses the indicator since it changes its position from above to below price action and back it adds the feature of parabolic SAR.

The buy and sell signal changes as the indicator flips over the closing price when the Super Trend closes below the price a buy signal is generated and when it closes above the price a sell signal is generated.

The buy and sell signals are shown by green and red arrows means that the green arrow is for buy and red arrow is for sell position.

Super trend is a trending indicator and like all technical indicator it works well in trending market.

It also give false signals in ranging or choppy market.

However it gives lesser falls signals than other indicator.

So before using any indicator to your trading system you must check about the choppiness of the trend.

It uses two parameters ATR period and multiplier.

The default settings are 7 for ATR Or trading period and 3 for multiplier which means that the system will calculate the ATR value for the last seven days.

Multiplier refers to a value by which the ATR will get multiplied.

Multiply value is a crucial input for super trend if the multiply value is too high the lesser number of signals are generated and if it is too small then we get more frequent signals and chances of generating false signals are quite high.

So keep the value of multiplier between 3 or 4.

In this chart you can see there are green and red arrows here.

When we have a green arrow near the bullish candle then we get a buy signal.

This is a buy signal and this is a green arrow here we can buy and prices close below this green line and we get a red candle also a red arrow.

This is the signal of exiting our buying position and we can also take the cell position here.

Here also we get a buy position and then sell position.

This is our buying position as we get a green arrow near a bullish candle and this is our sell position because we get a red arrow above this red candle.

So this is our short sell position.

Super trend also acts as a strong support and resistance and it’s also provide a trailing stop loss for the trade like parabolic SAR and moving average set up.

You can see as long as the candles are in uptrend they are above this green line so in uptrend this green line acts as a dynamic support and trailing stop Loss.

Similarly when candle are in downtrend this red line is acting as a resistance level.

Also we are getting a trailing stop loss at this line.

In buy signal any tip towards the indicator can be used as a buying opportunity.

You can see prices.

This is an uptrend and we are getting a buying signal here.

Prices move near this green line.

This is a dip so we are getting a buying opportunity here again prices are near this green line.

This is a dip and we are getting a opportunity of buying.

similarly in downtrend any pull back towards the indicator can be used as a selling opportunity.

This is a pull back and prices are going near this red line so it is a selling opportunity.

Supertrend works best when used with other indicators such as MACD, parabolic SAR and RSI.

But the best match with super trend is RSI.

I’ll see you in the next lecture.

Thanks for watching.

Choppiness Index

The choppiness index is an indicator used to determine.

If the market is going sideways means it is choppy or the market is trending means not choppy.

Choppiness indicator is not a directional indicator as it doesn’t tell us about the uptrend or downtrend.

It basically tells us about the trendiness of the market.

The range for choppiness index is 0 to 100 and the input for the periods is 40.

The upper and lower limits are set to the 61.8% and 38.2% that are important Fibonacci levels.

If the indicator is above 61.8% then the stock is in sideways mode and in a choppy trend.

And if the rating is below the 38.2% the stock is trending it means the closer to 100 choppy the market and the closer to zero the greater the trend.

Now seen in the chart.

This is the choppiness index indicator.

And this is the area.

60 above 61.8% percent this is the 61.8% line and this area above this line is called choppiness area.

This is the choppiness area where we get prices moves in a sideways trend.

Now this is 38.2% line and below this line we are getting a trending area means market is moving in a trend now.

You can see this is a chart when choppiness index is moving in this area about 61.8% rises are in a range they are moving in a range and market is choppy.

But when choppiness index breaks below this 38.2% level.

Now market is in a uptrend.

You can see prices are more in an uptrend again here We get choppiness index above this 61.8% level.

So we are getting a ranging market prices moves in a range moving in a range And when we get a break down below this 38.2% level prices are in uptrend.

We can go with this strategy here buy or sell the stock or index which have extreme ratings above 68.8% level and then bring below that level.

And when security starts moving in a trend or the position until choppiness index breaks above 61.8 level.

We can this is an uptrend so we can buy the index when we get a break down below this level and we can hold the position until choppiness index breaks above 61.8 level.

So we can buy here and exit here at this point.

And if the choppiness index ratings come back to 38.2 level twice or thrice after touching the 61.8% level then it is a signal of strong trend.

Now just see the exits here.

This was our exiting position and we can again buy the stock when we get break down below this 38.2 level.

So we can buy here now see choppiness index ratings are touching this 61.8% level thrice.

These are the positions and come back to 38.2% level here.

It means it is a signal of strong trend and you can see we are getting here a strong uptrend and we can hold this buy position until choppiness index breaks above 61.8% level.

Important thing to remember here is some stocks are highly volatile and doesn’t respond accurately with choppiness.

So don’t trade those stocks and filter out the stocks that give best response with the indicator as we cannot force indicators to fits stocks that trade differently.

Thanks for watching the lecture.

Average Directional Index

Welcome to EWTA The average direction indicator is a three line indicator Having ADX line + direction indicator line And minus direction indicator line It is used to know if a stock is trending and how strong is the trend The ADX line helps to tell the strength of trend So when ADX is about 20 it indicates a strong Trend And when ADX is below 20 it indicates a ranging market The ADX uses three lines to tell both trend direction and the trend strength So when +Di is above - Di buying is stronger And When - Ti is above +TI selling is stronger Low ADX reading is usually a sign of accumulation or distribution When ADX is below 20 price moves in a range between resistance and support levels From low ADX rating Price Breakout into a trend when ADX crosses above 20 level The direction of a ADX line is important to know trend strength When Idiots line is rising trend strength is increasing And when this line is falling Strength strength is decreasing And price and does a period of consolidation This is the ADX indicator This black line is ADX line The straight line is - direction indicator line And green line is + direction indicator line So when red line is above green line means spelling is stronger And when green line is above Red Line Buying is stronger Now see here ADX line is below 20 and it is rising above 20 level So we get a strong Trend As Red Line is above green so Trend is Downtrend You can see Prices are moving in a strong downtrend Now here ADX line is Falling below And it is going below 20 level means Prices are moving in a range bound market They are moving in a resistance and support level Again ADX is rising above 20 level And green line is about Red Line means buying a stronger And we can Buy the stock now see here ADX is falling below but Not closing down this 20 level Means trend is weak now but It may reverse or may not It doesn’t mean that the Trend may reverse now The point to remember here is a falling ADX line only means The week trendstrenght But it doesn’t mean the trend is reversing It may reverse or not From there A Divergence can also be seen in ADX and prices It actually doesn’t mean that when will reverse But rather a warning that trend Momentum is changing You can see here prices are moving up but Idiots is falling down we are getting a negative divergence From the peaks of the ADX line So it is a warning that momentum Can reverse or may not And you can see From here prices are falling down they are going in a downtrend now Now this is a sustainable downtrend So After falling below this 29 ADX Again most about this 20 level Now Red line is above green line it means selling is stronger here you can see This is a strong trend And prices are moving in a strong downtrend In this way we can add ADX indicator to other indicator To know strength of the trend

Multi-Collinearity

Welcome back multicollinearity in technical analysis is using two of the same types indicators at the same time.

Using the same category of indicators more than once at the same time can lead to a lot of confusion and wrong trading decisions.

Multi-collinearity is a serious problem in technical analysis because collinear variable give redundant information.

The problem can be solved by combining technical indicators that are not collinear.

Basically technical indicator have four categories.

Momentum indicators trend following indicators volume or volatility indicators and chart studies indicator.

Knowing which one belongs to which category and how to combine them can help us make much better trading decision.

In this chart we can easily see that the three indicators below the chart are giving same information because they all are Momentum Indicator.

You can see here RSI is above 50 level stochastic and CCI are in over sold range and going to all bought range.

So we are getting a buying signal here.

Also here RSI is going above 50 level and stochastic and CCI are also going to overbought range so we are getting a buying signal.

But see this portion.

In this portion all the three indicators are unable to give any valuable information about the selling signal but prices are in downtrend You can see now we will remove two indicators and combine other two indicators that complement nature.

We will combine ADX and supertrend to RSI.

Now we have three indicators naming Supertrend, RSI and ADX.

The three indicators have complement nature to each other.

Now see here RSI is going above 50 level.

Also Supertrend is giving us a buying signal and later ADX is also moving above 20 level and going to 40 level means trend is strong.

We are getting a strong buying signal.

Now in this portion we have three indicators of complement nature.

So we are getting a very clear sell signal here.

The RSI is going below 50 level and ADX is moving above 20 level and going to 40 level also super trend is giving us a selling signal.

So we get a very clear information about the downtrend but in the last chart when we had three indicators of collinear nature we were unable to get any clear information about the selling signal.

Here RSI measures momentum, ADX is telling us about the trend strength and super trend is telling us about the buying and selling signal.

So perfect combination of indicators that shows complementary information is very important part of trading because combining the information that they give will very quickly have a positive effect on our trading system.

As multi-collinearity is a big problem we can resolve it by focusing on three or four indicators that are complement each other and conforming our strategy by using an additional indicator.

Thanks for watching the video.

Indicator Settings On Multiple Time Frames

Welcome to the next lecture that is the most important lecture in this course The students are regularly asking me to tell them the best set of indicators And their settings That can be applied on different time frame but the most important part of Technical Analysis Is to analyse a chart Application of indicators is the secondary thing in technical analysis Indicators only tell us the signals That is the buy signal and the sell signal To remain in a move or stay away the trade in specific interval of time They only tell about the current direction of prices but they don’t tell us what should be our direction of trade And that is the most important thing that we must know before making any position in the stock market Soin this lecture we will learn a step-by-step approach Analyse a chart and the application of different indicators on different time frames First of all you should always know your trading prospective You can be a long term investor you can be a positional trader You can be a day trader or u can be scalper Then choose the Set of 3D chart That relates to Prospective For example If you want a long term investor Your chart Should be Daily weekly and monthly And if you are a positional trader your chart should be hourly chart daily chart and weekly chart And if your trading prospective is day trading then your chats will be 5 minute charts 15 minute chart and 60 minutes chart After choosing your 3D chatting Open the higher time frame chart And draw all the support and resistance line And also apply for fibonacci To the last swing In an uptrend if you are below the peak of the last swing Apply fibonacci from bottom to top of the last swing to know the Retracement level And if you are above the peak of the last swing Apply Fibonacci from Top to Bottom of the last showing to know Fibonacci extension And In a downtrend If you are above the bottom of the last Swing Apply Fibonacci is from Top to bottom of the last swing to know the Fibonacci retracement And if you are below the bottom of the last swing Applying Fibonacci from bottom to top to know Fibonacci extension then shift to middle timeframe and analyse the chart throughly Find out the current trend Find out your current position whether You are in In trending phase or retracement phase Find out if any chart pattern Is forming Draw the trend line If you are not able to draw a trend line then draw only internal trendline Always use log scale settings to draw the trend line Find out if there is any divergence On the chart The next step is apply different indicators on middle timeframe chart And find out your entry.

Also mark Levels of Fibonacci applied to the current swing You can choose one indicator from each category But I prefer tredi tional indicators for long term perspective If you are a long term investor Then use RSI ADX Chaikins oscillator and Fibonacci to the middle time frame and if you are a short term trader then you can use RSI chaikins oscillator Mac D and Fibonacci to the middle time frame chart And if you are a day trader then used RSI Mac D and chaikin oscillator to this chat Last but the most important step is shift to lower timeframe chart and Find your various entry and Exit positions That you can make in between the current trend Based on moving average crossovers and other Indica If you are a long-term Investor then on lower timeframe chart that is the daily chart in this case Your set of moving average combination will be 200 Hundred and Fifty Ema Do not use any other indicator on this chat because your prospective is long term investment As long as 50 Ema is above the 100 em a u can hold your trade And exit the trade when 50 EMA crosses Down the 100 EMA If you are a short term trader You can use RSI or stochastic RSI And if prices are moving in a trend then use RSI And if prices are moving in a range then use Stochastic RSI If you are an intraday trader You are moving average set will be 14, 7 and 3 period but if the market is volatile and you want smooth signals You can change your set to 20,10 and 5 EMA Also use RSI and bollinger band to this chart to get confirmed entry point So this was the whole process of analysing a chart with respect to your trading perspective I am sure if you You will follow all this Steps with Discipline And practice them on past data you will never lose money in stock market And make good profit Thanks for watching the lecture.

Five Important Things