Chart patterns
- Thread starter vishalalluri
- Start date
Hi Bunny,
You raised some interesting questions.. so thought of sharing my views on them.. (I might be wrong, but hope that gives u different perspective)
Flat top indicates that there are seller at that level.
Ascending bottom indicates that buyers are able to absorbe the selling and push prices up and make higher lows. So as buyers are building up, it is likely that they will absorb further selling and at some stage, buyers will dominate and price breakout on upside.
If buyers are able to push prices up above flat top, and new sellers come in and push price down.. i.e. we got slightly higher high (but not high enough), then this ascending triangle patterns changes the shape to ascending wedge.. which is a bearish pattern.
At this stage, we start questioning whether buyers are still strong enough, or sellers are getting stronger. If you can visualise it then these new sellers will be able push price below breakout level, or below the price range depending on their strength.
You can visualise it based on above answer.
In my view, converging patterns as created by small TF players when SM is
on the sideline. SM still jumps in whenever they price has reached their target zone. In between those zone, it is daytrader/ swing traders/small SMs how enjoy the market.
You might be able to see more diverging patterns in small stocks where SM are more or less operator or set of operatorS.
In my view, NONE. They are equally suceptible to failure or success. You will get better answer, if you pay attention to higher timeframe. That is, change you question to - If prev trend is bullish then what is success rate of Asc triangle breakout (bullish pattern)? And so on.
Obvious that SMs have done their job, they have brought the kids to beach and now it is playtime for kiddies.
Have posted my thoughts as reply to another post of Vishal.
Hope this helps.
Happy Trading
You raised some interesting questions.. so thought of sharing my views on them.. (I might be wrong, but hope that gives u different perspective)
Flat top indicates that there are seller at that level.
Ascending bottom indicates that buyers are able to absorbe the selling and push prices up and make higher lows. So as buyers are building up, it is likely that they will absorb further selling and at some stage, buyers will dominate and price breakout on upside.
If buyers are able to push prices up above flat top, and new sellers come in and push price down.. i.e. we got slightly higher high (but not high enough), then this ascending triangle patterns changes the shape to ascending wedge.. which is a bearish pattern.
At this stage, we start questioning whether buyers are still strong enough, or sellers are getting stronger. If you can visualise it then these new sellers will be able push price below breakout level, or below the price range depending on their strength.
You can visualise it based on above answer.
In my view, converging patterns as created by small TF players when SM is
on the sideline. SM still jumps in whenever they price has reached their target zone. In between those zone, it is daytrader/ swing traders/small SMs how enjoy the market.
You might be able to see more diverging patterns in small stocks where SM are more or less operator or set of operatorS.
In my view, NONE. They are equally suceptible to failure or success. You will get better answer, if you pay attention to higher timeframe. That is, change you question to - If prev trend is bullish then what is success rate of Asc triangle breakout (bullish pattern)? And so on.
Obvious that SMs have done their job, they have brought the kids to beach and now it is playtime for kiddies.
Have posted my thoughts as reply to another post of Vishal.
Hope this helps.
Happy Trading
hi aw10
ur opinion always brings knowledge
so if a price gives a break and comesback and retest it then i guess the trend line wouldact as a support and resistance in further move
thnks again
ur opinion always brings knowledge
so if a price gives a break and comesback and retest it then i guess the trend line wouldact as a support and resistance in further move
thnks again
It was broken in July, Retested in Aug and rejected there.
That is first sign of trend weakness coming in.
Please draw parallel trend line /channel for these TL and you will get better clarity.
So if you draw parallel TL /channel to current primary TL then you will see the price is not able to reach the upper channel boundry but reversing below that.
If this trend has normal strength, then price shd oscillate between inclined channel line.
If it doesn't, then it is sending a signal that any weakness might see break of lower line.
Happy Trading
Want a cocktail of trendlines? Click hare
Vishal, I am attaching my version of TLs on nifty chart. (which is looks pretty dirty in front of nice charts that u have been producing on this thread.) hope this gives u some more idea.
For drawing TL, there has to be some basic rules.. so my rules are
1) draw the line that touches most PH/PL points, some of them might not get touched or will have tail crossing the TL but thats fine with me.
2) Once a TL is crossed, and retested, its job is done . Just remove that from chart and reduce the clutter.
3) More #of times a TL is touched, more relevent it is
4) Primary TL covers longer timeframe, or bigger picture, Secondary TL covers shorter TF. Say primary TF spreading across >10 days and secondary TF is < 10 days
5) Keep removing TLs from chart and not to keep more then 2 to 3 TLs on the chart (including primary and secondary).
6) Draw channel lines parallel to primary TL and secondary TL to see what is going on the chart.
Notice the Red channel at the right most part. Thats what I will call as secondary trendline covering most recent action. It is sloping down and hence giving as info current info about the market.
To interpret this, either red channel has to be broken or respected. If it were to be broken then prices need go above this, test the channel boundry and stay above that. In that condiition, we will be back to major white uptrending channel.
And if it is respected, then price shd continue down with bounces at the red channel boundries. When selling gets further strength, then quite possible, price might jump out of this channel and form new TL/new Channel for us.
But let market tell us that in due course..
I am sharing this chart for learning purpose so plz don't take it into your trading. I might be wrong on that anticipation but I like to see that to help me in my trading (Infact, in reality right most part of chart is what matter most).
Hope this helps.
Happy Trading
For drawing TL, there has to be some basic rules.. so my rules are
1) draw the line that touches most PH/PL points, some of them might not get touched or will have tail crossing the TL but thats fine with me.
2) Once a TL is crossed, and retested, its job is done . Just remove that from chart and reduce the clutter.
3) More #of times a TL is touched, more relevent it is
4) Primary TL covers longer timeframe, or bigger picture, Secondary TL covers shorter TF. Say primary TF spreading across >10 days and secondary TF is < 10 days
5) Keep removing TLs from chart and not to keep more then 2 to 3 TLs on the chart (including primary and secondary).
6) Draw channel lines parallel to primary TL and secondary TL to see what is going on the chart.
Notice the Red channel at the right most part. Thats what I will call as secondary trendline covering most recent action. It is sloping down and hence giving as info current info about the market.
To interpret this, either red channel has to be broken or respected. If it were to be broken then prices need go above this, test the channel boundry and stay above that. In that condiition, we will be back to major white uptrending channel.
And if it is respected, then price shd continue down with bounces at the red channel boundries. When selling gets further strength, then quite possible, price might jump out of this channel and form new TL/new Channel for us.
But let market tell us that in due course..
I am sharing this chart for learning purpose so plz don't take it into your trading. I might be wrong on that anticipation but I like to see that to help me in my trading (Infact, in reality right most part of chart is what matter most).
Hope this helps.
Happy Trading
Last edited:
Notice the Red channel at the right most part. Thats what I will call as secondary trendline covering most recent action. It is sloping down and hence giving as info current info about the market.
so 4920 as it was tested couple of time last 4 trading sessions
yup aw10 markets will tell us the story ahead thnks a lot for all ur help really very simple and clear now :thanx:
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