⛏The hammer candlestick is found at the bottom of a downtrend and signals a potential (bullish) reversal in the market.
⛏The hammer candle has a small body, little to no upper wick, and a long lower wick - resembling a ‘hammer’. (2/13)
🔨Hammer candle can be of any colour – It can be either of Green or Red colour.
🔨The lower shadow should be at least two times the height of the real body. (3/13)
Psychology;
This candle pattern indicates that the price dropped to new lows, but subsequent buying pressure forced the price to close higher, hinting at a potential reversal. The extended lower wick is indicative of the rejection of lower prices. (4/13)
•Reversal signal – Entry for Bulls: It indicates the rejection of lower prices.
When found in a downtrend it could signal the end of selling pressure and begin to trade sideways or reverse, after confirmation such pattern can give the best entey to play reversal. (5/13)
•Exit signal- For Bears: Traders that have an existing sell position, can view the hammer candle as an indication for reversal and they can take exit to existing sell position. (6/13)
•Confirmation is important :
Entry in any trade should be taken only after the confirmation.
Fomo of entering into a trade without any confirmation can trap you in a wrong trade. (7/13)
•Stoploss:
Once entered into any trade after the confirmation, stoploss can be placed below the low of hammer candle. (8/13)
Examples 1) TECHM - Stock
•Here we can see the clear downtrend,
•Then formation of hammer candle,
•Next candle gives confirmation and the trend reverse. (9/13)
2) CHOLAFIN - Stock
•Here we can see the clear downtrend,
•Then formation of hammer candle,
•Next candle gives confirmation and the trend reverse. (10/13)
3) NATURAL GAS - Commodity
•Here we can see the clear downtrend,
•Then formation of hammer candle,
•Next candle gives confirmation and the trend reverse. (11/13)
•Target/ Exit point –
✔I always follow next resistance level as my target.
✔Always mark strong resistance areas in your chart and use them as a target for a perfect exit. (12/13)
♥If you found this thread useful, please RT the first tweet.🔁 (13/13)
A thread: To learn BULLISH ENGULFING candlestick pattern. 👇
We traders, always make our trading so complicated & in live market that results into losses.
Simple range breakout strategy to catch Index trades.
A Thread 🧵
(1/14)
#StockMarket #trading
@kuttrapali26
✨What is range bound market?
When the stock prices generally flow back and forth near the old highs and then fall back to the recent lows.
When we mark such highs and lows, we find a range, and when the price move between that range, it can be termed as range bound. (2/14)
✨What is Range breakout?
When the price breaks the range which we marked earlier, it means now the price is no more trading in thein congestion area, then it can be termed as range breakout.
After such range breakout, we can see good price movement in that particular direction. (3/14)
An ETF where we can park our cash – As an alternative to keeping funds in your trading account. (2/15)
This Exchange Traded Fund exclusively invests in the overnight money market, providing a high level of safety and liquidity.
It is monitored by the RBI to ensure there are no challenges in terms of repayment or liquidity. (3/15)
There are various ways of investing, and two of the most popular are mutual funds and Exchange-Traded Funds (ETFs).
Both are pooled funds that allow investors to access professionally managed funds that offer diversification in a wide variety of asset classes and industries. 2/20
MFs includes stocks, bonds, and money market funds that are bundled together in a single mutual fund. They offer investors a way to own a diversified portfolio of investments at a lower price which is not possible if they own each instrument separately. (3/20)
Step 1:
Identify the stocks which are in short term downtrend phase.
Let’s understand it with the chart of Wipro.
Date: Feb 2021
Here we can see, stock is in short term Correction/ Downtrend. (2/13)
Step 2:
Draw a trendline by connecting all swing highs & wait for the price to break the trendline.
The Trend Line Breakout technique helps you time your entry in a trending market. (3/13)
Fibonacci Retracement is an important technical analysis tool used for charting potential Support and Resistance levels on any given chart.
These Fibonacci levels are also extremely important when trying to spot potential reversals within a chart. (2/20)
These Fibonacci levels are based on a numerical sequence created by Leonardo Pisano in the 13th century.
The reason these levels hold weight or are significant, is because so many people use them. (3/20)