Technical Analysis rules by Mr. Chartist

  1. अगर आप चाहते है की आपका चार्ट Analysis आपको Follow करे तो आप कभी भी 1 साल से कम Data वाला Chart न देखे क्युकी टेक्निकल Analysis होता ही Historical Data को Analyse करके Future को Predict करते है और जब Data ही कम रहेगा तो ये Accurate नहीं होगा.
  2. आप Intraday में Analysis करना चाहते है तो पहले Market को settle होने का Time दे, & Chart Analysis केवल 10:00 PM के बाद करे ताकि Shares का Movement Stable & Analysis Accurate हो.
  3. Analysis में आप केवल Price पर विश्वास न करे, आप Price के साथ साथ Volume को भी महत्वपूर्ण अंग माने & जब भी कोई Chart Breakout या Breakdown पर हो तो उसको वॉल्यूम से कन्फर्म करे & बिना वॉल्यूम के किसी भी पैटर्न को Breakout या Breakdown ना माने.
  4. जब भी आप Support & Resistance Draw करते है तो सबसे पहले आप Horizontal लाइन को तरजीह दे & उसके बाद ही आप Diagonal लाइन को महत्त्व दे, & अगर आप Diagonal Line Draw कर रहे है तो उसके पीछे एक महत्व कारण होना चाहिए.
  5. Pattern की ताक़त & Pattern का Time एक दूसरे से संबद्ध रखते है, जितना ज्यादा Time Frame का Pattern होगा वो उतना ही मजबूत Pattern होगा, तो आप हमेशा से ज्यादा Time Frame वाला Pattern खोजे.
  6. अगर आप मार्किट में नए है तो Indicator उपयोग कर सकते है, लेकिन कुछ सावधानियाँ बरतने की जरूरत है
    a- कभी भी Indicator को मुख्य/प्राइमरी टूल की तरह उपयोग ना करे
    b- Indicator, Price & Volume के Calculation से ही निकलते है तो हमेशा से इंडिकेटर आपको लेट अलर्ट देते (Lagging View)
    c- आप जब नए होते है तो आपको इंडीकेटर्स सबसे सरल लगते है लेकिन जैसे जैसे आपका अनुभव बढ़ता जायेगा आपको Indicators के Drawbacks भी मालूम चलते जायेंगे
  7. यदि कोई व्यक्तिगत स्टॉक घटना (Event- News, Earning, Announcement etc) के बाद चलता है, तो अपने स्टॉक चयन के दौरान उस स्टॉक से बचने का प्रयास करें क्योंकि घटना स्टॉक में कुछ विफलता की संभावना जोड़ती है।
03. The Charts

The Charts

Introduction of ChartsA stock chart is a visual representation of the current and historical stock prices displayed on an X & Y-axis graph. Stock charts allow you to see the past and recent price performance of a financial instrument. Charts plot historical data based on a combination of price, volume as well as time intervals.The […]

02. Introduction of Technical Analysis

Dow Theory

Dow Theory is named after Charles H Dow, who is considered the father of Technical Analysis. Dow Theory is very basic and more than 100 years old but still remains the foundation of Technical Analysis.

Charles H Dow(1851-1902) ,however, neither wrote a book nor published his complete theory on the market, but several followers and associates have published work based on his theory from 255 Wall Street Journal editorials written by him.

The Dow Theory is made up of six basic principles. Let’s understand the principles of Dow Theory.

1. The Average Discount Everything

The market Price takes everything into consideration, all of the time. The value of the stock price, for example, reflects all investor sentiment – the hopes, fears, concerns, optimism, and pessimism – of all its participants. It also reflects everything else that is known about a market at any given moment. Interest rates and expectations for them are known. The current business climate is well documented, as are predictions for the future. Company earnings, and expectations, are already in the marketplace. The politics of the day and impending electoral change is already priced in. Shocks to the market, unexpected events, wars, or political upheaval, may occur. These will affect the market in the short term, but then it will return to a trend.

2. Market has Three Trends

A trend is a general movement in a particular direction. Trend analysis is a technique used in Technical analysis that attempts to predict future stock price movement based on recent obscene data. Trend Analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.

Trends classifications:-

  1. Based on Price Movement
  2. Based on the Time Period
Based on Price Movement
I. Uptrend- 

In an uptrend, both the peaks (tops) and troughs (bottoms) of a stock chart keep increasing successively. So, every day or so, the stock price touches a new high and falls lower than it did previously. Don’t be a mistake; this need not be a lifetime high. It could be the highest the stock touched in the past few days, weeks, or months too. This steady rise in tops and bottoms indicates that the market has a positive sentiment. It expects the stock has a higher chance to appreciate more than depreciate. So, more investors buy, thus driving the price higher. Similarly, each time the stock falls, investors see it as an opportunity to buy even more. They don’t wait for it to fall to the previous level. They buy the stock before that. This arrests the fall.

II. Sideways Trend- 

In finance and economics, a sideways trend, also known as a horizontal trend or a range-bound market, refers to a situation where the price of an asset or security moves within a relatively narrow range over a period of time. This can be seen in the movement of a stock’s price on a chart, where the price is not generally moving upwards or downwards, but rather staying within a specific range. A sideways trend can last for various lengths of time, and is often a sign of uncertainty or indecision among investors. It is important for investors to carefully monitor the market and be prepared to adjust their investment strategies if the trend changes

III. Downtrend- 

A downtrend is a pattern, where a stock is falling constantly. Not only are successive peaks lower, but successive troughs are also lower. This means that investors in the market are convinced that the stock will fall further. Each little rise in the stock’s price is used by investors to sell their existing quota of shares. No further buying takes place at these levels. Such a stock must not be bought, no matter how much its price has fallen especially if you are a short-term investor. If you are a long-term investor, you may want to wait until the stock price falls further.

Based on Time Frame
Based on Time Frame
I. Primary Trend

The Primary trend can either be a bullish (rising) market or a bearish (falling) market. This is the longest and the most important trend of the three. This is because it has the ability to influence the other two trends. Basically, the primary trend sets the tone for the other two trends. A primary trend generally lasts for one to three years. That said, it can go beyond this timeframe sometimes. Unless there is a clear sign of a trend reversal, the primary trend is considered to be the main trend. A primary trend may be in the form of a constant increase in stock prices for a period of one to three years.

In such a case, peaks would be constantly higher than previous ones. (A recap, this is when the stock price touches higher highs consecutively.) Similarly, a primary trend may also be marked by a constant fall in stock prices for multiple years.

II. Secondary Trend

A secondary trend is a temporary price movement in the contrary direction to the primary trend. It is hard to find a one-to-three-year phase in history during which stock prices only went up without a single decline. This is because of secondary trends.

Let’s look at an example. Suppose stock prices constantly moved up for a period of 2 years. However, during these two years, there was one phase during which stock prices constantly declined for three months.

This phase will then be called the secondary trend. Similarly, if the primary trend is a fall in stock prices, the secondary trend would be a short-term rise in stock prices.

Each primary trend contains many secondary trends within it. A secondary trend normally lasts for three weeks to three months. It is a weaker trend than a primary trend. This is because it cannot reverse the primary trend and lasts for a smaller period. If the primary trend is upward, a secondary trend may be able to cause a temporary downward movement.

However, it cannot cause a decisive downward movement that would last for years. For example, markets are bullish about the potential of the Indian economy. So, the market is primarily moving up. Yet, there are phases when markets fall because say, lackluster corporate earnings or because a particular reform Bill is not passing in Parliament. This causes a secondary trend.

III. Minor trend

A minor trend is a phase within a secondary trend. It is to a secondary trend, what a secondary trend is to a primary trend. In other words, it is a short-term movement that is contrary to the direction of the secondary trend. However, it lasts for an even smaller duration. Its duration typically ranges from a few days to a week. As such, if the secondary trend is a two-month-long downward movement, its minor trend would be an upswing that would only last a few days at best.

3. Trends have 4 Phases

Trends have 4 Phases
Trends have 4 Phases
I. Accumulation Phase

The first stage of a new bull market is referred to as the accumulation phase. To get you to thinking market psychology a little, try to imagine after a considerable sell-off, the buyers that step back in to pick up the bargains are the Pros. They have seen this type of market action before and recognize the stock prices are ‘on sale’ so to speak. They are normally the ones buying in the Accumulation Phase. No, they didn’t rupee-cost-average all the way down as the market kept declining; they didn’t buy in at the previous market top and sell out at the bottom. No, they were sitting on the sidelines with cash in hand waiting for the market to hit bottom. Once it became reasonably apparent the bottom was in place, that the risk of further decline was minimal, and the chance of a future advance was very good, then, and only then, did they risk their money.

Accumulation Phase
II. Participation Phase

As the accumulation phase materializes, a new primary trend moves into what is known as the Public Participation Phase. This phase is usually the longest-lasting of the three phases. This is also the phase you want to be invested in, an advancing market.

During this phase, earnings growth and economic data improve and the public begins to tip-toe back into the market. As the economy and the related news improve, more and more investors move back in, and this sends stock prices higher. These advances can last several years. Historically, there is a bear market on average every three and one-half years. Therefore, an advancing bull market should last around three years before another bear market begins.

Participation Phase
III. Distribution Phase

The third phase is the distribution phase. This phase is the one that seems to always catch investors and traders unaware. The market has been in an advancing primary trend, and many think it will continue to move higher.

Dow correctly named this phase because of the trading activity going on during this phase. Remember the smart money buyers who were ‘accumulating’ during the accumulation phase, buying while there was blood in the streets? They are the ones selling in the distribution phase. The investors and traders that are often caught unaware are the ones normally doing all the buying during the distribution phase, buying from the smart money investors and traders.

Some say it is harder to call a market top than a market bottom. That is somewhat true. But a market top always has certain characteristics that can be recognized. Market tops form after a long advance. The market seems to get tired and stops advancing and begins moving sideways. The market stops making new highs. It no longer has the momentum to push higher, so it starts trading sideways and then begins to rollover. Volumes also dry up.

Distribution Phase
IV. Participation Phase

The participation phase is characterized by declining fundamentals, rising corporate losses, and declining public sentiment. More and more trader participates in the market, sending prices lower. This is the longest phase of the primary trend during which the largest price movement takes place. This is the best phase for the technical trader.

Participation Phase

4. Volume Must Confirm the Trend

Dow recognized volume as a secondary but important factor in confirming price signals. Simply stated, the volume should expand or increase in the direction of the major trend. In a major uptrend, the volume would then increase as prices move higher, and diminish as prices fall. In a downtrend, the volume should increase as prices drop and diminish as they rally. Dow considered volume a secondary indicator. He based his actual buy and sell signals entirely on closing prices. Today’s sophisticated volume indicators help determine whether the volume is increasing or falling. Savvy traders then compare this information to price action to see if the two are confirming each other.

5. Average Must Confirm Each other

Dow, referred to something called Industrial & Rail Averages- this meant that no important bull or bear market signal could take place unless both averages gave the same signal, thus confirming each other.

To understand this better- the Dow Transportation Index was seen as a key gauge of economic activity- as the US rail network was extensively used to ship goods. With factories dotted throughout the country, the rise or fall of rail use was considered an important indicator. Dow said one should correlate the Dow index & Dow transport index.

Dow’s idea of seeing confirmation between two stock indices holds value even today. Taking those two indices as an example, Dow said that when both were moving in the same direction, it provided greater confidence compared to times when there is a divergence between the two. It makes sense to look for confirmation utilizing the case of whether both create higher highs and higher lows for an uptrend. Nowadays traders may wish to look for alternate markets, yet the notion of using correlated and related markets to find confirmation remains valuable.

Participation Phase

6. A Trend Is Assumed to Be Continuous Until Definite Signals of Its Reversal

This tenet forms much of the foundation of modern trend-following approaches. It relates a physical law to market movement, which states that an object in motion (in this case a trend) tends to continue in motion until some external forces cause it to change direction. A number of technical tools are available to traders to assist in the difficult task of spotting reversal signals, including the study of support and resistance levels, price patterns, trendlines, and moving averages. Some indicators can provide even earlier warning signals of loss of momentum. All of that notwithstanding, the odds usually favor the the existing trend will continue.

Uptrend to Downtrend Reversal
Downtrend to Uptrend Reversal
02. Introduction of Technical Analysis (1)

Introduction of Technical Analysis

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volumes. It is a popular tool among traders and investors, as it can help to identify trends and patterns in the market that can be used to make informed investment decisions. Technical analysis is based on the idea that market trends, as shown by charts and other technical indicators, can provide valuable insights into the likely direction of prices. It is often used in conjunction with fundamental analysis, which examines the underlying factors that drive the market, such as a company’s financial performance and industry conditions. Technical analysis can be a useful tool for traders and investors, but it is important to remember that it does not guarantee success and that past performance is not necessarily indicative of future results.

Price and volume are two key concepts in the world of trading and investing. Price refers to the amount of money that is charged for a product or service, and volume refers to the number of units of a product or service that are traded in a given period of time. In the context of the financial markets, price and volume are often used together to analyze the performance of a security, such as a stock or bond. For example, if a stock has a high price and a high volume, it may indicate that there is strong demand for the stock and that investors are willing to pay a premium for it. On the other hand, if a stock has a low price and a low volume, it may indicate that there is weak demand for the stock and that investors are not willing to pay a high price for it. By analyzing the relationship between price and volume, traders and investors can gain valuable insights into the market and make more informed investment decisions.

Derivation of Price

Market/Price Action-

Price data (or as John Murphy calls it, “market action”) refers to any combination of the open, high, low, close, volume, or open interest for a given security over a specific timeframe. The timeframe can be based on intraday (1-minute, 5-minutes, 10-minute, 15-minute, 30-minute, or hourly), daily, weekly, or monthly price data, and last a few hours or many years.

Technical Analysis Working

Technical Analysis is basically the study of an asset’s current and previous prices. The main underlying assumption of technical analysis is that fluctuations in the price of an asset are not random and generally evolve into identifiable trends over time.

At its core, Technical Analysis is the analysis of the market forces of supply and demand, which are a representation of the overall market sentiment. In other terms, the price of an asset is a reflection of the opposing selling and buying forces, and these forces are closely related to the emotions of traders and investors (essentially fear and greed).

Effective Technical Analysis –

Technical Analysis is considered more reliable and effective in markets that operate under normal conditions, with high volume and liquidity. The high-volume markets are less susceptible to price manipulation and abnormal external influences that could create false signals and render Technical Analysis useless.

Liquidity- Market liquidity is the extent to which a market allows for assets to be bought and sold at fair prices. These are the prices that are the closest to the intrinsic value of the assets. In this case, intrinsic value means that the lowest price a seller is willing to sell at (ask) is close to the highest price a buyer is willing to buy at (bid). The difference between these two values is called the bid-ask spread.

 

Liquidity

Quick & Time Saving –

Quite simply, technical analysis is a fantastic tool for making and saving you money. Nowadays everyone wants to trade day by day or swing basis (10/15 Days position), here we can’t apply fundamental analysis so we need to analyze stock trends with the help of price. It saves you bundles of time (over the fundamental analyst). You will find it removes huge chunks of the ‘psychological’ game of trading and investing from the equation. It creates discipline and is essential for the risk and trade management of your portfolio – whether that be knowing when to take profits, setting stops, or getting out of bad trades.

Assumptions in Technical Analysis –

Quite simply, technical analysis is a fantastic tool for making and saving you money. Nowadays everyone wants to trade day by day or swing basis (10/15 Days position), here we can’t apply fundamental analysis so we need to analyze stock trends with the help of price. It saves you bundles of time (over the fundamental analyst). You will find it removes huge chunks of the ‘psychological’ game of trading and investing from the equation. It creates discipline and is essential for the risk and trade management of your portfolio – whether that be knowing when to take profits, setting stops, or getting out of bad trades.

Technical Analysts don’t care whether a stock is undervalued or overvalued. In fact, the only thing that matters is the stock’s past trading data (price and volume) and what information this data can provide about the future movement in security. Technical Analysis is based on a few key assumptions. One needs to be aware of these assumptions to ensure the best results.

Assumptions in Technical Analysis
1. Price Discount Everything –

Demand and supply create price and this price includes all things. Technical Analysis assumes that the company’s fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.

Price Discount Everything is not the discount act of god.

Nasdaq was down before 9/11 Attack
Election result was discounted even before announce market and market moved by 27% before result.
2. Price Moves in Trend –

One of the biggest assumptions technical analysis makes is that prices follow trends and aren’t random. They follow a given trend, which can be either bullish/long or bearish/short, following identifiable patterns that tend to repeat over time. Whenever a trend is established, the underlying asset is likely to continue moving in a given direction until a new trend is established.

When it comes to price movements, technical analysts believe that price moves, in short, medium, and long-term trends. For long-term traders who hold trades for days, weeks, or months, long-term charts such as hourly, daily, and weekly charts become most valuable. Short-term traders who hold trades for minutes should pay attention to short-term charts, which can be in five- and 15-minute periods.

Market movement aren't random
3. History Tends to Repeat Itself –

The basic idea in technical analysis is that history will always repeat itself, be it in the short term or long term. For this reason, technical analysts spend most of their time trying to understand past price movements to try and accurately predict future price movements.

The repetitive nature of price movements makes it possible to predict future price movements. The repetitive aspect is based on the fact that both human behavior and human history repeat themselves.

Classic chart patterns, such as channels and trends as well as rectangles, ranges, tops, and bottoms, are some of the results of predictable human behavior. Technical analysts look for these patterns because most of the time they provide a predictable outcome.

History Tends to Repeat Itself
87

Markets Sanmi No Den by Munehisa Homma

According to Munehisa Homma, “the method of looking at rice market price movements to predict the following day’s movements, was first thought up by a man by the name of Sokyu Honma and was called the Sakata Constitution”.

The port of Sakata was the primary distributor of one of the most important commodities in Japan; rice. Homma carefully studied the rice market and began to notice tendencies and patterns. This method was divided into two groups called the “Markets Sanmi No Den” and “Sakata strategies”.

The markets Sanmi no den contained a set of rules for actions to take based upon different market scenarios. His original method predated the Japanese candlestick charts however he later created the candlestick chart and applied his patterns to them.

Learnings or Rules from The Fountain of Gold Book

  1. In trading, the beginning is crucial If the beginning is bad, the ensuing course will continue in disorder. You should never rush when entering trading because rushing is the same as a bad beginning. When buying or selling, wait for three days from the moment you feel you could profit from a certain market condition. This is the rule. Consider the distribution condition of the rice in addition to the ceiling and bottom prices of it before you make your decision.
  2. The rise and fall of the rice price follows the law of nature, and it is hard to identify either the down or up moments while it goes up and down continuously. Those who are ignorant of this rule should not even attempt to try their hand at trading.
  3. Wait Calmly When You Have Missed the Perfect Time to Buy – If the rice price goes up by 2 koku just when you have decided to buy rice, you may think you missed the perfect time to buy and it is a better time to sell, but this would be a big mistake. When you have missed the best time to buy, you should wait for the next opportunity to buy.
  4. Aim for a Bigger Profit: Don’t Rest on a Small Profit – There are times when just as you have made your buy at the bottom and expected some profit, the price stagnates or goes down slightly. When this happens you think you have miscalculated the market and you regret that you didn’t sell when the price went up previously. But this is the wrong way to think. When you buy at the bottom, you should never sell until the trend makes a shift.
  5. When You Have Made a Wrong Decision, Sell Quickly and Rest – You should never distribute and accumulate at a time of bad luck. When you have made a wrong decision, quickly sell off and take a break for 4-50 days. Even if the trading has happened as you expected, take a break for 4-50 days after the trading, think of the distribution of the rice and the appropriate timing based on the “Three Methods” before you make your next move. Above all, remember you are sure to cause a loss when the trading concludes if you forget about this break upon seeing an opportunity for profit. However, taking a break after concluding a trade does not mean resting without any thought of the market; you closely watch the market movement with a calm mind during this break. If you find an opportunity to make a profit based on the selling method of the previous year, you are likely to become attached to it. But the best thing is to let go of your attachment to the previous year, and think of the current year’s harvest, the volume of offerings, and the market mood. 
  6. Don’t Be Carried Away by Winning- Never let yourself be carried away by winning when you have achieved 80-90% of your goal after several months. Instead, focus on making a profit naturally. You must never ever lose yourself in greed.
  7. Eye the Bottom, Aim for the Ceiling– When you buy and sell, you have to eye the bottom and aim for the ceiling. You must keep this in mind.
  8. You Will Succeed Only When You Sell Well- There is no major change within a year, except for a rise once, and a fall once. Even
    during the rise, the price goes down slightly, and during the fall, it goes up slightly. But this repeated cycle is not the market trend that is headed to the ceiling. Don’t be fooled by the repeating cycle of market action. The first step is more important than anything. The decision to buy should not be made lightly; don’t be dispirited when you see an opportunity for profit-making. The decision to sell may look easy but it is very difficult to handle. When the price starts going down, you have to buy back because you cannot tell how far down it is going to fall. When the price falls, don’t lose yourself in the commotion of others. The best thing to do is to let go of any greed, and buy out.
  9. Going Against the Trend is Not Allowed- There are times when you decide to sell off your offerings because your forecast for the market is gloomy, but your forecast turns out to be wrong and it leads you to loss. Intending to distribute,28 some people begin to sell off their rice when the price is moving upward, but this is very wrong. You must not go against the trend. The same applies when you buy. When you realize your market forecast was wrong, take your hands off the market and remain observant. 
  10. When Tempted to Enter Trading, Wait Two Days When your inner voice tells you, “the rice price is sure to go up, I must buy it today”, wait
    for two days. It is the same when it whispers “it is sure to go down”. This is a profound secret. When the price has reached the ceiling, the best thing you can do is to identify the time to sell. The best thought you can have when the price reaches the ceiling is the thought of selling. When it is at the bottom, the thought of buying is the best. You should not forget this.
  11. Do Not Buy at the Ceiling or Sell at the Bottom- Just remain mindful of the market. You can never tell either the ceiling or the bottom while the price is moving up or down, and besides you often become caught up in the hype and insist on either selling or buying without thinking of the time when the up or down action comes to an end until you cause a loss of money. When the price is going up unusually high, count on it to go down for certain. When it goes down, count on it to go up later, all the while waiting for an opportunity with determination, and letting go of greedy minds.
  12. Mindset is Everything- When trading futures in the eleventh month of frost, your mindset is the most important. For example, you should be ready, in your mind to make 500 koku of profit when you can make a thousand koku of profit, depending on your financial situation. You should also take 50 koku of profit when you could have made 100 koku of profit. Unless your mind is set in this way, you will be tempted and reckless, trade be it at the ceiling or at the bottom until you fail to make any profit after having worked so hard. Those who want to take this path have to have this kind of mindset.
  13. Do Not Rush to Trade- Don’t rush in trading. When you sell or buy based on your personal thoughts, it is because you have no skills and you think there is no tomorrow in the market. You make your move only when you are certain of the timing after waiting for days and even
    months, all the while remaining watchful of market fluctuation. You make mistakes because you make your move without being mindful of the ceiling and the bottom. All this is because you rush to trade.
  14. Decide on the Capital Before You Start– When entering the trade, you must decide on the source of your capital, and how much you are going to use for trading. If you are on the buying side, you can begin with just a little capital and buy rice in small quantities, and when you start making profits, you can increase the volume of your purchase until you buy the volume you had targeted originally. If everything goes the way you anticipated, you must wait until you are sure of the price increase. If the price increase is far more than you expected, you can easily
    become greedy and get carried away by a few wins.
  15. Do Not Start Trading As a Pastime- is a common piece of advice for individuals who are considering entering the world of trading and investing. Trading can be a complex and risky activity, and it is important for individuals to understand the potential risks and rewards before they get started. Trading should not be viewed as a simple way to make quick money or as a way to pass the time. Instead, it should be treated as a serious business venture that requires careful planning, research, and strategy in order to be successful. Individuals who are considering trading should be prepared to devote a significant amount of time and effort to learning about the markets and developing their skills, and should only trade with money that they can afford to lose.
92

Charles Henry Dow & History of Modern Technical Analysis

Charles Henry Dow was born on November 6, 1851, in the hills of Sterling, Connecticut to a farming family. His father died when he was six years old. Though he would never finish high school, he opted out of the family business and instead pursued journalism. Without much education or training, in 1872 he found […]

87

Munehisa Homma & History of Candlestick Patterns

Homma began recording price movements in the rice market on paper made out of rice plants. He laboriously drew price patterns on his rice parchment paper every day, recording the open, high, low, and close of each day. Homma began seeing patterns and repetitive signals in the price bars he was drawing and soon started […]

66

Gap Analysis

IntroductionThe most common definition of a “gap” is the difference between a Financial Instruments opening price and its previous day’s closing price. This difference shows up visually on a technical price chart as an open space or “gap.” There are two primary kinds of gaps – Gap up and Gap down.Gaps result from extraordinary buying […]

How To Set TradingView Alerts

How To Set TradingView Alerts

If you’re new to TradingView you are unsure of how to properly set server-side alerts and alert conditions on the TradingView platform, then this post is for you!

Server-side alerts are alerts that are monitored by TradingView’s servers, meaning you do not need to leave your computer running with the charting platform open in order for them to trigger.

In this post, I will sum up exactly how to create all types of script alerts on the TradingView platform including price alerts, drawing tool alerts, and indicator alerts.

TradingView Alert Types

TradingView has several different types of alert actions, all of which can be enabled or disabled as you wish (depending on your membership plan).

Notify on App only works if you first download the (free) TradingView app (Android or iOS). If you have the app installed and a trading alert is triggered then you will receive a push notification straight to your mobile device.

Show Popup will display a window popup inside your TradingView chart window when an alert is triggered. The popup will display on every chart you have open.

Send Email sends you an email whenever an alert is triggered. You can specify the message that is sent so that you know which indicator triggered the email alert.

Play Sound plays an audio alert whenever a signal is triggered. You can select from 8 different sounds and you can choose how long the sound plays for. This is a fantastic tool for day-traders and I use it every day.

Send Email-to-SMS will send you a text message to your phone. In order to use this feature, you must have a phone data carrier that allows email-to-SMS functionality.

How To Set TradingView Alerts

You can set alerts in a multitude of ways. The easiest way is to just click on the Alert menu and then click the Plus button. Then you can choose what to set an alert for and the conditions that trigger it.

The alert options are fairly straightforward to understand, but I’ll break them down below.

Alert Options & Conditions

 

 

Conditions

This section sets the conditions which must be met in order for the alert to trigger. You can click on the first box to select the script that you want to generate your trading signal.

In the second box, you can choose which variable you want to monitor.

The third box is used to set the condition that the second box’s variable must meet in order to trigger the alert.

Note that if the script you are using generates its own alerts based on internal conditions that the script looks for then you do not need to touch the second or third box.

Simply select the script you want to use for alerts and the script will decide when to send out the alerts. These particular options are more for using basic alerts on drawing tools which I will demonstrate below. For most script-based alerts you will only need to touch the first box to select the script.

Options

These four buttons let you choose when the alert is triggered (on a candle and time basis).

If you set it to Only Once then the alert will trigger a single time without repeating, and it will trigger during the current candle without waiting for it to close.

If you set it to Once Per Bar then it will trigger once per bar (before the candle closes), and it will repeat on any new bars.

If you set it to Once Per Bar Close it will only trigger when the candle closes. This is the most common setting that you will use for trading signals if you are a systematic trader, and it will repeat on any new bars if the alert conditions are met.

Once Per Minute will trigger the alert on any current candle multiple times, but only once per every minute. This is great for detecting potential setups before the candle closes so that you can be prepared in advance. I often use this for assistance with trading my intraday strategies, so that I spend less time staring at charts during the day.

Expiration Time

This section lets you set the expiration time of the alert.

How long you can have the alert active depends on your membership plan. On a Free account, you are limited to only 1 alert per account and the maximum alert expiration is 2 months.

On a Pro account, you can set multiple alerts (up to 20 on Pro and 100 on Pro+), also with a maximum expiration of 2 months.

On the Premium account, you can set up to 200 alerts and gain access to the open-ended setting which will leave the alert active forever until you manually disable it.

You can set any date within your maximum time period and any time of day. Expiry times are useful for tracking day-trading setups with a limited time window, but most of the time you will want to set the alert for the maximum time possible – until your setup is invalidated or you have already acted on it.

Setting Price Alerts

The Quickest way to add an alert in Stock with the ALT+A shortcut key this will provide the alert box with a setting and we can add an alert for above and below in the price. 

Alert Allow you to put alert in varios conditions, Crossing Up, Crossing Down, Greater Than, Less than, Entering Channel, Exiting Channel, Inside Channel, Outside Channel, Moving Up, Moving Down, Moving Up %, & Moving Down. 

Setting Alerts on Drawing Tools

This feature is particularly useful for pattern traders.

You can set alerts based on your technical analysis drawings. This is great for rectangles, triangles, flags, wedges, trend lines, and channel breakout signals. You can set alerts on any type of drawing tool you wish.

For example here is how you would set an alert that triggers when the candle closes beyond a trend line (signaling a breakout setup):

 

Right Click on Mouse and Next Click on Add Alert in Parallel Channel (Drawing)
Select various field in Alert and give name to Alert, add message to identity the alert with details.

Alerts

Introduction of Alerts

Timing plays a crucial role in the stock market e.g. entering at right time, booking profit at right time, exiting losing trade at right time, etc. Missing an important trade by minutes or seconds could cost you a considerable profit or result in a big loss on your Trades. Instead of using a scanner, you need to do research regularly and need to find some important levels to catch the stock at fresh breakout and breakdown and these levels must be treated as Alert levels. Once, the price break the resistance or support we will have an alert on our system.

A stock alert is a notification that some aspect of stock has passed a specific threshold that you have set. For example, you can set your alert to notify you as soon as the stock has increased or decreased in value by more than one percent or the trading volume has increased or decreased by more than 5 percent. Getting notified of an alert can be anything from a popup on your desktop to a text message on your phone, or even email notifications. Electronic notifications allow you to respond as quickly as possible because fractions of a second in response time can make a big difference when it comes to stocks.

Setting up the right stock alerts, on stocks that you own, helps to make you aware of important market activities that you might not have otherwise noticed. You may be able to use the alert to prevent a significant loss if stocks you own drop in value. Likewise, you may decide to sell and take your profits if you notice an increase in the stock’s valuation and an increase in trading volume. The stock alert allows you to react quickly to buy, sell or trade stocks in your portfolio.

When you’re a regular trader in the stock market, you need up-to-date information on all the stocks you own. To get the alerts you need, decide on what threshold you want for each alert. You may even decide to set up different levels for each stock. You may even want to have multiple alert types for a single stock. Be sure to keep your alerts up to date as you make changes to your Trades.

Setting up an alert system for your stocks helps you to find stocks for fresh breakouts and breakdowns in rapid changes that take place during the opening hours of the market.

 

How To Set TradingView Alerts

If you’re new to TradingView you are unsure of how to properly set server-side alerts and alert conditions on the TradingView platform, then this post is for you!

Server-side alerts are alerts that are monitored by TradingView’s servers, meaning you do not need to leave your computer running with the charting platform open in order for them to trigger.

In this post, I will sum up exactly how to create all types of script alerts on the TradingView platform including price alerts, drawing tool alerts, and indicator alerts.

TradingView Alert Types

TradingView has several different types of alert actions, all of which can be enabled or disabled as you wish (depending on your membership plan).

Notify on App only works if you first download the (free) TradingView app (Android or iOS). If you have the app installed and a trading alert is triggered then you will receive a push notification straight to your mobile device.

Show Popup will display a window popup inside your TradingView chart window when an alert is triggered. The popup will display on every chart you have open.

Send Email sends you an email whenever an alert is triggered. You can specify the message that is sent so that you know which indicator triggered the email alert.

Play Sound plays an audio alert whenever a signal is triggered. You can select from 8 different sounds and you can choose how long the sound plays for. This is a fantastic tool for day-traders and I use it every day.

Send Email-to-SMS will send you a text message to your phone. In order to use this feature, you must have a phone data carrier that allows email-to-SMS functionality.

How To Set TradingView Alerts

You can set alerts in a multitude of ways. The easiest way is to just click on the Alert menu and then click the Plus button. Then you can choose what to set an alert for and the conditions that trigger it.

The alert options are fairly straightforward to understand, but I’ll break them down below.

Alert Options & Conditions

 

 

Conditions

This section sets the conditions which must be met in order for the alert to trigger. You can click on the first box to select the script that you want to generate your trading signal.

In the second box, you can choose which variable you want to monitor.

The third box is used to set the condition that the second box’s variable must meet in order to trigger the alert.

Note that if the script you are using generates its own alerts based on internal conditions that the script looks for then you do not need to touch the second or third box.

Simply select the script you want to use for alerts and the script will decide when to send out the alerts. These particular options are more for using basic alerts on drawing tools which I will demonstrate below. For most script-based alerts you will only need to touch the first box to select the script.

Options

These four buttons let you choose when the alert is triggered (on a candle and time basis).

If you set it to Only Once then the alert will trigger a single time without repeating, and it will trigger during the current candle without waiting for it to close.

If you set it to Once Per Bar then it will trigger once per bar (before the candle closes), and it will repeat on any new bars.

If you set it to Once Per Bar Close it will only trigger when the candle closes. This is the most common setting that you will use for trading signals if you are a systematic trader, and it will repeat on any new bars if the alert conditions are met.

Once Per Minute will trigger the alert on any current candle multiple times, but only once per every minute. This is great for detecting potential setups before the candle closes so that you can be prepared in advance. I often use this for assistance with trading my intraday strategies, so that I spend less time staring at charts during the day.

Expiration Time

This section lets you set the expiration time of the alert.

How long you can have the alert active depends on your membership plan. On a Free account, you are limited to only 1 alert per account and the maximum alert expiration is 2 months.

On a Pro account, you can set multiple alerts (up to 20 on Pro and 100 on Pro+), also with a maximum expiration of 2 months.

On the Premium account, you can set up to 200 alerts and gain access to the open-ended setting which will leave the alert active forever until you manually disable it.

You can set any date within your maximum time period and any time of day. Expiry times are useful for tracking day-trading setups with a limited time window, but most of the time you will want to set the alert for the maximum time possible – until your setup is invalidated or you have already acted on it.

Setting Price Alerts

The Quickest way to add an alert in Stock with the ALT+A shortcut key this will provide the alert box with a setting and we can add an alert for above and below in the price. 

Alert Allow you to put alert in varios conditions, Crossing Up, Crossing Down, Greater Than, Less than, Entering Channel, Exiting Channel, Inside Channel, Outside Channel, Moving Up, Moving Down, Moving Up %, & Moving Down. 

Setting Alerts on Drawing Tools

This feature is particularly useful for pattern traders.

You can set alerts based on your technical analysis drawings. This is great for rectangles, triangles, flags, wedges, trend lines, and channel breakout signals. You can set alerts on any type of drawing tool you wish.

For example here is how you would set an alert that triggers when the candle closes beyond a trend line (signaling a breakout setup):

 

Right Click on Mouse and Next Click on Add Alert in Parallel Channel (Drawing)
Select various field in Alert and give name to Alert, add message to identity the alert with details.

How To Set Zerodha Kite Alerts

Kite Alerts

With Kite alerts, you can create real-time alerts based on various parameters. You can create simple alerts as well as alerts based on if this then that like conditions.

Here are the data points based on which you can set the alerts:

  1. OHLC – Open, High, Low, and Close.
  2. Percentage – Day change, Intraday change.
  3. Price – Last traded price and Average Traded price.
  4. Quantity – Total buy and sell quantity.
  5. Open Interest (OI) – OI Day high and low.
  6. Volume Traded.
  7. Last traded quantity

You can use the following mathematical operators to set up your alerts :

  1. Greater than (>).
  2. Greater than or equal to (>=).
  3. Less than (<).
  4. Less than or equal to (<=).
  5. Equal to (=).

How to Set Kite Alerts-

A.  Kite Web
  1. Click on the ‘more’ context menu on a scrip.
  2. Select ‘Create Alert’
  3. Enter a name of your choice
  4. Select the Property as per the requirement
  5. Enter the value
  6. Create.
Alerts

You can also create alerts from the ‘Alerts’ page.

  1. Click on the Orders.
  2. Select Alerts.
  3. Create new alerts.
Alert in Web

Combine Scripts Alert

You can also create alerts by combining two scrips. For example, you can create an alert if Nifty futures is trading below the Nifty spot Index. This means that Nifty futures are trading at a discount to spot and that there are signs of bearishness.

Double Script's Alert
B.  Kite Mobile
  1. Click on the scrip
  2. Scroll down and click on ‘Create alert’
  3. Enter a name of your choice
  4. Select the Property.
  5. Enter the value
  6. Slide ‘Create’.
Mobile Alerts
B.  Kite Mobile
  1. Click on the scrip
  2. Scroll down and click on ‘Set an alert’
  3. Enter a name of your choice
  4. Select the Property.
  5. Enter the value
  6. Click Create.
Mobile Alerts

Kite Notification

Whenever an alert is triggered, you’ll see a notification on Kite Web. You’ll also get a notification on Kite Mobile and an email as well.

Kite Web Notification
Kite Web Notification
Mail Notification
Mail Notification
Mobile Notification
Mobile Notification

Note:

  1. Kite alerts are free, there are no additional charges.
  2. You can have a maximum of 200 alerts. This includes disabled alerts. To add more alerts after your first 200, you’ll have to delete some of your existing alerts.
  3. The basic alerts that were created earlier on Sentinel can be seen now on Kite.
  4. The advanced alerts feature has been deprecated for now. We shall look into the possibilities to add it in future updates.
  5. All disabled alerts that have not been edited for more than 3 months will be automatically deleted.

Source of ArticleWhat are Kite alerts and how do I use them? (zerodha.com)