Why StopLoss is your best friend?
StopLoss is there to stop your loss at some point, it is a saviour, a friend who limits your damages and saves you from the worst. Stop treating it like an enemy and embrace it like a friend, that’s the most important ingredient for successful trading.
Are cryptocurrencies a good investment?
• Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. Reason is simple, Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
• That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the profitability and cash flow of the operation.
• But a crypto currency like bitcoin don’t have anything to back it, it’s value is created out of thin air. It doesn’t have any value, it’s value is 0. It is currently running just on blind faith, but day is not too far that everything will fall apart.
AMIBroker is one of the most famous Algo-Trading Tools available in the market today, which uses AFL Scripting. We can use AMIBroker to create, back-test and deploy and strategy. This post is the placeholder for sharing AMIBroker AFL Data Feed for July 2021. Note: These files contain data feed up-to 1 minute. We are providing…
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WHAT IS AN ENGULFING PATTERN?
What are engulfing bars? The engulfing bar formation consists of at least two candles, where the second candle completely engulfs the previous one. The signal that the engulfing bar formation provides is, depending on whether the second bar is bearish or bullish, either a reversal or a continuation.
Engulfing patterns like all candlestick patterns have many different looks and as a rule of thumb an engulfing pattern is defined as a candle that closes higher than the previous candle’s body high (bullish engulf) or lower than the previous candle’s body low (bearish engulf). If it closes above the high rather than above the body or below the low rather than below the body, then the engulfing pattern will even be stronger. The candle that engulfs the prior candle shouldn’t be a 50% candle.
What is Trendline and its importance?
As technical analysis is built on the assumption that prices trend, the use of trend lines is important for both trend identification and confirmation. A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance.
Many of the principles applicable to support and resistance levels can be applied to trend lines as well.
Supply and Demand zones are horizontal Support & Resistance whereas trendlines are dynamic Support & Resistance
A Head and Shoulders is a bearish reversal chart pattern and as the name suggests it looks like head and shoulders.
Different parts of Head and Shoulders pattern
There are four major parts which forms this pattern.
1. The left shoulder – Inverted U – The market does a pullback and forms an inverted U shape. At this point, there’s no way to tell if the market will reverse because a pullback occurs regularly in a trending market.
2. The head – Inverted V/U – The market trades above the previous high. However, the sellers took control and push the price lower towards the previous swing low (forming the Neckline and a big inverted V/U shape).
3. The right shoulder – Inverted U – The buyers make a final attempt to push the price higher, but it failed to even break above the previous high (the head). Then, the sellers take control and push the price towards the Neckline, forming another inverted U shape.
4. The neckline/trendline – This is the last line of defence for the buyers. If the price breaks below it, the market could reverse, head lower and begin the start of a downtrend.
Things to Remember,
1. H&S formation should be as straight as possible and it should not be sloping up or downside too much. A perfect H&S should have equal highs on both side of the head but this is not possible all the time. So slightly sloped H&S also ok, but not too much tilted!!
2. The lesser the height of the second shoulder, the better it as this indicates the consolidation, so a sharp move or too much height on the second shoulder isn’t a good sign and such trades should be avoided.
Connecting Head & Shoulders through Trend line
Once you identify the head and shoulder formation, just draw a straight line in bottom which connects head and shoulder. We will get a technical breakout when the price gives breakout below the line drawn.
NAV of Regular Plans are lower than Direct Plans in mutual funds. Shouldn’t I buy low and sell high? In that case, shouldn’t I be buying regular plans over direct plans in mutual funds?
The NAV of regular plans is lower because it includes distributor commission and it’ll always be lower than the NAV of its direct plan counterpart. In this case, your purchase price doesn’t matter. What matters, is the rate of growth after you purchase.
How to create algo for RSI Crossover System?
Condition:
The Trading Idea is to Buy when short-term momentum crosses above long-term momentum and vice versa.
RSI is a oscillator which depicts momentum in prices. We try using two RSI of different periods to judge the short-term momentum and long-term momentum. So trade entries will be based on RSI indicator.
However, by construction, RSI gives a lot of whipsaws while it oscillates up and down. So trade exits are done using RSI levels to avoid too frequent re-entries.
So when it comes to trade condition,
Buy: When short-term RSI crosses above long-term RSI
Sell: When RSI goes below 40 level
AMIBroker is one of the most famous Algo-Trading Tools available in the market today, which uses AFL Scripting. We can use AMIBroker to create, back-test and deploy and strategy. This post is the placeholder for sharing AMIBroker AFL Data Feed for June 2021. Note: These files contain data feed up-to 1 minute. We are providing…
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How To Draw Bases That Have A Single Candle At The Base?
When bases are made of a single candle, there are two options we can use to draw them:
1. Using the closest open/close of the basing candle
2. Using the upper/lower shadows (wicks) of the basing candle. Use this option when the candle is not very wide and it’s not a failed ERC candle.
Both options are valid. Price often reacts to the wicks, think of them like a magnetic field having a range of attraction or an aura.