Strategy 6: Rising Wedge Pattern

 The rising wedge is a popular reversal pattern that is predictive in nature and can give traders a clue to the direction and distance of the next price move.

Rising wedges appear regularly in the financial markets and traders gravitate towards the pattern because of its simplicity in identification and application

WHAT IS A RISING WEDGE PATTERN?

The forex rising wedge (also known as the ascending wedge) pattern is a powerful consolidation price pattern formed when price is bound between two rising trend lines. It is considered a bearish chart formation which can indicate both reversal and continuation patterns – depending on location and trend bias. Regardless of where the rising wedge appears, traders should always maintain the guideline that this pattern is inherently bearish in nature (see image below).

HOW TO IDENTIFY A RISING WEDGE PATTERN

The rising wedge pattern is interpreted as both a bearish continuation and bearish reversal pattern which gives rise to some confusion in the identification of the pattern. Both scenarios contain a different set of observation dynamics which must be taken into consideration.

Continuation Pattern:

1. Established downtrend
2. Rising wedge consolidation formation
3. Linking higher highs and lower lows using a trend line assembling towards a narrowing point
4. Confirm divergence between price and volume using volume function - MACD may also be used
5. Overbought signal can be confirmed by other technical tools like oscillators (RSI)
6. Look for break below support for short entry

Reversal Pattern:

1. Established uptrend
2. Rising wedge consolidation formation
3. Linking higher highs and lower lows using a trend line assembling towards a narrowing point
4. Confirm divergence between price and volume using volume function - MACD may also be used
5. Overbought signal can be confirmed by other technical tools like oscillators
6. Look for break below support for short entry

HOW TO TRADE THE RISING WEDGE PATTERN

The chart above shows a rising wedge ‘continuation’ pattern after a determined downtrend. The rising wedge is outlined by the blue dashed lines showing diminishing bull strength in the uptrend. Confirmation of the uptrend waning in strength can be seen using the volume tool on the chart which depicts fading volume in concurrence with the ascending price in the market. This is known as divergence, showing that the upward movement is coming to an end.

The entry point (labelled) occurs once the trend support line of the rising wedge has been breached. There are two common methods of entry:

1. Wait for a candle close below the support trend line before entry
2. Enter into the short position as soon as the price breaks the support line, regardless of the candle close

The stop level as highlighted on the chart is elected from the high point of the rising wedge located on the resistance trend line. This identification point makes it relatively simple to locate the stop level for novice traders. The limit in this example was taken from the previous swing low giving this trade an extremely positive risk-reward ratio.

Strategy 5: HEAD AND SHOULDERS PATTERN

 

key action points when identifying this pattern:

1. Identify the overall market trend using price action and technical indicators (preceding uptrend)
2. Isolate the Head and Shoulders chart construction
3. The distance between the ‘Head’ and ‘Shoulders’ should be as close to equidistant as possible
4. Delineate the neckline at the low point between both ‘shoulders’ – preferably horizontal but not obligatory

The Head and Shoulders chart pattern is a price reversal pattern that helps traders identify when a reversal may be underway after a trend has exhausted itself. This reversal signals the end of an uptrend. The Head and Shoulders pattern has a distinctive appearance resembling its namesake which includes a distinct ‘left shoulder’, ‘head’, ‘right shoulder’ and ‘neckline’ formation.

WHAT IS THE INVERSE HEAD AND SHOULDERS PATTERN?

The Inverse Head and Shoulders (informally known as the 'Reverse Head and Shoulders pattern) resembles the same structure as the standard foration but reversed. The Inverse Head and Shoulders is observable in a downtrend (see image below) and indicates a reversal of a downtrend as higher lows are created.

There is a general rule of thumb to designate stop and limit levels. Taking the high point off the ‘right shoulder’ will specify the stop level whilst the vertical distance between the neckline and high of the ‘head’ will approximate the limit distance – 1832.8 pips in this case. The risk-reward ratio on this trade is roughly 1:1.2 which is still within the DailyFX recommended risk management parameters.

Machine Learning

                                               How to start:

1. Analyze the Train Data completely :

1. Skewness : https://www.kaggle.com/getting-started/110134 
2. Null values
3. types of data or values

SMOTE: https://imbalanced-learn.readthedocs.io/en/stable/generated/imblearn.over_sampling.SMOTE.html 

Where available, you should select among these using the average parameter.

• "macro" simply calculates the mean of the binary metrics, giving equal weight to each class. In problems where infrequent classes are nonetheless important, macro-averaging may be a means of highlighting their performance. On the other hand, the assumption that all classes are equally important is often untrue, such that macro-averaging will over-emphasize the typically low performance on an infrequent class.

• "weighted" accounts for class imbalance by computing the average of binary metrics in which each class’s score is weighted by its presence in the true data sample.

• "micro" gives each sample-class pair an equal contribution to the overall metric (except as a result of sample-weight). Rather than summing the metric per class, this sums the dividends and divisors that make up the per-class metrics to calculate an overall quotient. Micro-averaging may be preferred in multilabel settings, including multiclass classification where a majority class is to be ignored.

• "samples" applies only to multilabel problems. It does not calculate a per-class measure, instead calculating the metric over the true and predicted classes for each sample in the evaluation data, and returning their (sample_weight-weighted) average.

• Selecting average=None will return an array with the score for each class.

While multiclass data is provided to the metric, like binary targets, as an array of class labels, multilabel data is specified as an indicator matrix, in which cell [i, j] has value 1 if sample i has label j and value 0 otherwise.

How to handle Multicollinearity

 : https://www.analyticsvidhya.com/blog/2020/03/what-is-multicollinearity/ 

To be checked: https://scikit-learn.org/stable/auto_examples/ensemble/plot_adaboost_multiclass.html#sphx-glr-auto-examples-ensemble-plot-adaboost-multiclass-py

https://scikit-learn.org/stable/auto_examples/ensemble/plot_adaboost_regression.html#sphx-glr-auto-examples-ensemble-plot-adaboost-regression-py

Strategy 4: Bullish Flag Pattern

 

                                        Bullish Flag Pattern

Strategy 2: V shape

                                             V shape Strategy 

As the name implies, the "V" chart patterns have the letter "V" shape and prices shift their momentum from an aggressive sell-off to aggressive rally in its structure. 

The key factors of the pattern identification:

1. Sharp Downtrend
2. Sharp Uptrend
3. V shaped Pattern (usually 1-3 bars reversals)
4. Volume increase in both breakdown and breakout phases
5. Breakout over neckline
6. Pullback to the Neckline
7. Target

Stop loss: The stop loss is placed under the last lowest one

How to Do Option Chain Analysis

                                         OPTION Chain Analysis

NSE LINK:

Old Link:

 https://www1.nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp?symbolCode=-10006&symbol=NIFTY&symbol=NIFTY&instrument=-&date=-&segmentLink=17&symbolCount=2&segmentLink=17 

New Link:

Nifty Bank Analysis 18 oct 2020

                     NIFTY Bank Analysis

As we can see it is formed V Pattern we can see the retracement of the 5% from the Top. 

So We can short it and Target Around 22600 by Oct End. 

INTRADAY: strategy 1

 Today will see the intraday simple strategy it is mostly 90% looks good for me, but need to do the RND

1. 2 Min/ 1 Min strategy ( time frame)
2. BUY Signal
1. PRICE is Uptrend 
2. 20day EMA is UP
3. 200 day EMA is up 

Example: 

Nifty:

3. SELL Signal:

• 200 day EMA is Down.
• 20 day EMA is down
• Price is down

Example Nifty

CandleSticks Basic

 Type of Candle stick:

1. Bullish

1. Bearish
2. 
   
   
   
3. DOJI: The Doji is an excellent potential reversal signal. It occurs when the open and the close are the same. Usually, the open and the close are found in the middle of the price range.
4. 
5. HAMMER : It is important to recognize this sing as and indication of a potential reversal When it develop in Harmonic area. 

HARMONIC PATTERNS

                                         HARMONIC PATTERNS:

Content from Below Book: 

BOOK: The Harmonic Trader  

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1. Everyone knows that October historically has been a troubling month for the major markets.
2. particularly evident when several harmonic calculations converge at a specific price area to define critical support or resistance. This area is known as the Potential Reversal Zone.
3. The Key to utilizing these harmonic measures when analyzing a price chart is to determine the area where the greatest amount of calculated rations congregate.
4. When three, four or even five numbers come together within a specific area as defined by their respective structure, you must respect the high probability for some type of reversal.

                                                                    RULES

• Bigger the Pattern, the more significant the potential reversal ( Example : Weekly chart)
• If a PRZ contains four or five numbers, the area should be considered  very harmonic. If the price action reverse from this area, the PRZ could be considered as an important turning point. BUT if the price action doesn't reverse it worked indicate that the predominant trend is quite strong. 
• To determine valid reversals and to optimize trade executions. These skills require consistent dedication to research past harmonic examples and to analyze current set-ups.
• Price Gap in the PRZ occurs most frequently and is the strongest of all the warning signals. A price gap is an extremely significant indicator of an invalid setup and has kept me out of my bad trade

INTRADAY RULES for Stocks

                                                 INTRADAY RULES for Stocks

I have divided the level in three categories L1/L2/L3. it is up to you what you think in Which Level. 

What I have felt in my journey  on the Trading sessions I have kept it here. 

IMPORTANT LINKS:

•  https://in.tradingview.com/chart/WITCkega/
• https://www.tickertape.in/stocks/pvr-PVRL   : Used for check the status of any STOCK it will give more details
• https://in.investing.com/portfolio/?portfolioID=Y2dhNzZgYz01azsxZzU3NQ%3D%3D
• https://www.screener.in/?gclid=CjwKCAjw_NX7BRA1EiwA2dpg0tnuutOo63PAgEdFF4KuaIwXiMWeEaa8oQxujZK2RL_uQr_0ZN2YWhoCkXoQAvD_BwE   : Company Analysis 
• https://www.moneycontrol.com/markets/technicals/  More details on the Market 
• https://www.moneycontrol.com/mutual-funds/nav/canara-robeco-blue-chip-equity-fund-direct-plan/MCA212   : Check on the which MF and adding the stock or deleting the stock. 
• Option Chain Analysis: https://www1.nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp?symbolCode=-10006&symbol=NIFTY&symbol=NIFTY&instrument=-&date=-&segmentLink=17&symbolCount=2&segmentLink=17 
• https://www.subhashtechlive.com/   : For Daily Resistance and supported provided

                      =========BEGNIEERS ( L1)============

1. NO BTST ( Buy Today and Sell Tomorrow or vice versa) 
2. NO HYPOTHESIS/ ASSUMPTION 
3. TRADE WITH ONLY 1 lot in OPTIONS
4. Don't go 1st with the Target after, taking the Entry first set the Stop loss. do the Trailing Stop loss. 
5. Target for the Minimum  500/1000 per day.
6. Stick on the Trendlines and Strategies 

STRATEGY:

2_Min_with EMA

                      =========INTERMEDIATE (L2)============

                      =========EXPERTS (L3) ============

                                Entry Exit when the W Pattern  seen

Above diagram we can see the W pattern Making so Making the Entry when we see the upward Move. 

Keeping the Target Minimum of  Middle of the W . Later keep the Trailing Stop Loss

                                             Trading Strategy 

1. Step trend line then book profits.

2. Shadow trend line is to go reverse.