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STOCK CHART PATTERNS

  Stock chart patterns   are simply a visual representation of the prices buyers and sellers bought and sold at in the past. There is no magic in a chart pattern they just show you what happened in the past and what has a higher probability of happening in the future. The best use of chart patterns is to take a wider view of the trend on your time frame of choice and follow the path of least resistance.  A chart pattern can show that a stock is in a range with defined resistance and support. A chart could also show an uptrend of higher highs and higher lows or a downtrend of lower highs and lower lows. Stock chart patterns signal whether a stock is under accumulation or distribution or just trading in a defined price range.  The most popular use of stock chart patterns is for breakout trading signals as the probability increases of a move in a specific direction after a price breakout of a previous support or resistance. They are basically momentum indicators. The va...
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FLOAT IN STOCK MARKET

  Float in a stock is the number of shares of a company that is currently trading publicly on the exchange and is available for traders and investors to buy and sell. The stock float is calculated by taking a company’s total issue of outstanding shares and subtracting any restricted stock. Pre IPO investors, employees and founders can’t sell their restricted shares because they can be in a lock-up period for a time following the IPO usually between 90-180 days. Executives and insiders many times can also be restricted from selling shares around earnings announcement dates.  This occurs when an insider could have knowledge of information not public yet where the sale of shares could be considered insider trading in a legal sense. A company’s float is an important metric to show the liquidity of shares for a company. It can show the supply of shares on the open market and give a clearer view of supply and demand. Share float is the shares traded on the stock exchanges and price ...

Golden Cross Stock Trading Strategy

  he Golden Cross stock trading strategy is an example of a simple long term trend following system. This is one of the most popular and famous bullish moving average crossover signals that is watched and talked about on financial media when they occur on major indexes. The second most popular being the loss of the 200-day moving average on a stock market index like the S&P 500 or the Dow Jones Industrial Average. The Golden Cross happens on a stock chart when the 50-day simple moving average crosses over the 200-day simple moving average and stays above until the end of the day. This signal has you go long when the 50-day simple moving average closes above the 200-day simple moving average and takes you back to cash when the 50-day SMA closes back under the 200-day SMA which is signaling the Death Cross. The inverse of the bullish Golden Cross is the bearish Death Cross which is a signal to exit long positions or a short selling signal. This trading strategy is best compared t...

Pre Market Report, Jan 29, 2021

  US markets closed higher. But it has given up half of the gains in last hour. Asian markets are mostly positive. SGX Nifty crossed 14050 yesterday night but now trading around 13970. Still this will be a gap up of more than 100 points. Nifty has fallen more than 1000 points intra month in Jan series. Bank Nifty has fallen more than 3000 points intra month in Jan series. Last month FIIs began with more than 75% long in F&O. This month it is only 62%. Markets are light going in to budget. Decissive direction will be set only after budget. For very short term, 50DMA of 13700 is a good support. Yesterday markets took support near 13700. Pharma stocks will be in focus as many pharma stocks will declare results. Moreover when overall markets are weak, pharma and FMCG tend to do well. Whenever huge selling happens in bluest of blue chip stocks like HDFC Bank and HDFC, the bottom is somewhere near. Yesterday I could feel that, at the same time, markets may not rally from here. Market...

Stock Screener Settings for Top Growth Stocks

  One of the best stock screening filters for finding growth stocks are the parameters of the CAN SLIM Investing System that was created by William J. O’Neil. These parameters were quantified by his study of the fundamental company metrics of the largest winning stocks in the history of the U.S. stock market going back over 130 years. The stocks that historically met these guidelines were the ones that eventually created the majority of the Alpha in the stock market over the long term during bull market cycles. He looked for the fundamentals that companies in the first stages of big growth cycles possesed.  The CAN SLIM Investing System looks for specific fundamental measurements of a company’s strength of earnings and sales along with its growth rate. It also considers more discretionary company filters like innovative products or business models along with good management.  A CAN SLIM fundamental filter is a great place to start if you are looking to build a w...

Step by step approach for reading chart patterns

  Chart patterns   are visual representations of the behaviors of buyers and sellers around different price levels. Chart patterns are bullish when a chart is making higher highs and higher lows, they are bearish when they are making lower highs and lower lows, and range bound when they have defined support and resistance levels and no trend.  Trading chart patterns  is primarily momentum trading where a breakout of an existing pattern is the signal to enter a trade. Technical traders use the breakout of an existing trendline in a pattern to establish an entry point. After they are in, then a trade is managed to maximize a gain or minimize a loss to create a good risk/reward ratio. Chart patterns can signal breakouts, reversals, and continuations of current price action. Trading chart patterns step by step: Identify a pattern on a chart based on the parameters of price action. (The  chart pattern cheat sheet  below can be used as a guide). In a bullish char...

Lessons From the Best Trader of All Time: Jim Simons

  Jim Simons   is one of the most successful hedge fund managers in history. He is a trained mathematician and quantitative trader and the founder of Renaissance Technologies. His hedge fund specializes in diversified system trading using individual quantitative models derived from statistical analyses of historical price data. His primary models are on pattern recognition. Jim Simons was a mathematics professor from 1968 to 1978, and chair of the mathematics department at Stony Brook University. He started in the hedge fund industry in 1982. His net worth is currently approximately $23.5 billion. His Renaissance Technologies flagship Medallion fund is one of the best performing funds in history in both magnitude and duration of compounding returns on capital. How good is his fund at making money? They had to close the Medallion fund to outside investors due to compounding the capital under management to such a size they had trouble scaling the signals on markets that could no...