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MarketSecrets - Learn To Trade Like a Pro

Why 95% of Traders fail in trading?

June 23, 2021

Why 95% of Traders fail in trading? Even the most successful in other fields end up losing money when it comes to trading. Do you know why?
Let’s discuss the reasons and how to avoid this in detail in the 2nd episode of our new series – “how to become a successful trader”
• Would you dare catching an alive snake without training?
• Would you dare to fly a jet without mastering how to fly and land it?
• Would you assist a doctor in surgery without you getting an MBBS?
• Would you climb a mountain without training?
• Would you join a bomb disposal squad without mastering how to diffuse a bomb?
But when it comes to trading, we put even our last rupee in trade without learning HOW TO TRADE.
This is the reason 95% traders don’t earn money, because they don’t LEARN before they try to earn.
Trading without training is
• like catching an alive snake without proper training
• like taking off in a jet not knowing how to land
• like performing a surgery without any experience
• like climbing a mountain without a safety rope
• like diffusing a bomb without proper safety gear!
How many of us in our trading career done all this without confidence? I definitely have.
Every day I see traders being
• bitten by the snake
• crash landing or ejecting from the jet
• leaving the patient to die on the operation table
• falling of the mountain cliff
• cutting the wrong wire of the bomb!!!
It took us 1 year to speak our first word, 2 years to take our first step, 16 years of formal education to earn our first salary. BUT, we don’t want to spend even 6 months to LEARN trading.

What is the end result?
80% traders blow their trading accounts and move out of the market in less than 6 months.

Lack of Common sense is the most uncommon thing found in traders. Never trade if you don’t know answer of these questions.
1. Why I am entering this trade? (the system/method/training needed to take a trade)
2. What I would earn out of this trade and by when? (the outcome or expectation)
3. What I am going to do if my trade does not work as expected? (the safety rope/gear)

How to trade using Cup and Handle Pattern?

June 19, 2021

Today we are going to learn about Cup and handle Pattern
So for we have seen Triangle pattern and Flag pattern and I hope you have liked it and understood better. This week let us learn about another bullish pattern – Cup and handle.
A cup and handle is a continuation pattern of bullish trend. It is one of the easiest pattern to identify through naked eye and it looks like Tea cup as the pattern name suggests.
Different parts of Cup and handle pattern
There are two major parts which forms this pattern.
1. CUP – It is a part where price makes a U shaped pattern and marks a consolidation period. The shape may look like bowl or rounding bottom. Avoid V shaped Cups
2. Handle – This part is formed when price making another small U shaped pattern which is 1/3rd height of CUP. Handle should be formed in shorter period of time than the time it has taken to form the CUP.
Things to Remember,
1. CUP formation should be as straight as possible and it should not be sloping up or downside too much. A perfect cup should have equal highs on both side of the cup but this is not possible all the time. So slightly sloped cup also ok but not too much tilted!!
2. The handle part should not go below the 1/3rd height and the width of the handle should be smaller than the width of the cup. Just like a Tea cup cannot have bigger handle than the size of the cup, right!!! Example: If a cup takes 8 hours of time to get formed then the handle should not take more than 1 to 2 hours.

Why you should never invest in regular mutual funds?

June 16, 2021

Why you should never invest in regular mutual funds?
A mutual fund is not free from costs. An asset management company (AMC) is a for-profit entity whose aim is to make some profit from their venture. They also have to pay their analysts, operations teams, pay brokerage fees for market participation, and record keeping fees to registrars like CAMS and KFintech, formerly known as Karvy.
A regular plan of a mutual fund has one more additional expense — distributor commission.

Direct plans of mutual funds have no commission, so it has lower fees compared to its Regular plan counterpart. So the Returns will be higher with no extra risk.

How to create algo for MACD Momentum Trading strategy?

June 12, 2021

How to create algo for MACD Momentum Trading strategy?

Condition:
The MACD indicator is one of the most popular indicators to determine trending prices. The basic trading rules is to buy when it cuts above zero line or buy when its cuts above signal line. When the direction of trend is not clear, MACD stays close to the zero line.

The trading idea is simple.
We need to buy when
• trend is strong
• there is momentum in market
• the market is not sideways

Buy Condition: MACD above 0 and MACD above Signal Line and MACD above 25 and Signal candle is beyond Bollinger Band
Sell Condition: When either MACD below 0 or MACD below Signal Line

Reverse is applicable for shorting.

Why every trader must have a business plan?

June 9, 2021

How to make a Business plan for trading? We can simply call this as TRADING PLAN.
Trading is like any other business and doing a business without a proper business plan will end in disaster. So hopefully, by now you understand the importance of a trading plan (i.e business plan for trading), so it’s time to start making one. Though a proper trading plan can have anything you feel should go into it, it should account for the following parameters mandatorily.
They are:
• What to trade.
• Trading time frames.
• Condition for Entering a trade.
• Condition for Exiting a trade.
• Condition for Stop placement.
• Positional sizing.
• Money management.
• Risk vs. reward ratio.
• Back testing.
• Periodic Performance review.

AMIBroker AFL Data Feed – May 2021

May 31, 2021

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 May 2021. Note: These files contain data feed up-to 1 minute. We are providing…
Read more

How to setup Algo-Trading for Open Range Breakout (ORB) Trading Strategy?

May 29, 2021

How to setup Algo-Trading for Open Range Breakout (ORB) Trading Strategy?

Condition: Open Range breakout. This is exactly opposite to OHOL strategy. If open price of the stock is equal to today’s low and in case if price breaks and goes below today’s low, we can short the stock. Likewise If open price of the stock is equal to today’s high and in case if price breaks out and goes above today’s high, we can go long.

Script Setup:

I’ll go long if
• Stock is an OH candidate and if
• price breaks out to upside from the OH level and
• Current time is between 9.45 & 3.15

I’ll short if
• Stock is an OL candidate and if
• price breaks out to downside from the OL level and
• Current time is between 9.45 & 3.15

This was one of the strategies commonly used for the reversal trades, especially if you are actively trading on OHOL strategy.

In the previous episodes, we have discussed on how to install amibroker, where to get 1 minute data, how to import the data into amibroker and how to set-up the database and charts. We also discussed on some of the commonly used sripts. So please do refer the previous episodes in case you are not able to replicate this.

How to draw supply and demand zones for harami pattern?

May 22, 2021

How to draw supply and demand zones for harami pattern?

What is HARAMI Pattern?
Haramis are candlestick patterns in which a large candlestick is followed by a smaller candlestick whose body is located within the vertical range of the larger body. Haramis can be bullish or bearish and can be a sign of a potential reversal of the current trend.

HOW TO USE HARAMIS PATTERNS
 They are the building blocks of a trend
 They usually happen at the end of an uptrend/downtrend
 They can happen at flip zones and previous SR/SD zones that are being revisited.
 Don’t use if pattern is in the middle of nowhere, these patterns are good reversal candlestick patterns but they need to be at bigger timeframe zones for higher probability trading

The Bullish and bearish harami Pattern
• Bullish pattern = demand reversal pattern
• Bearish harami = supply reversal pattern

How to draw zone for Bullish and bearish harami Patterns:
 For Demand Zone
 For distal line – use low of the zone
 For proximal line – use high of the tightly packed body
 For Supply Zone
 For distal line – use high of the zone
 For proximal line – use low of the tightly packed body

Tweaking and extending the proximal/distal lines of a level:
There are times when the proximal and distal lines of a base can be tweaked, for instance when there is a single basing candle (not a wide one) or we have several low volatility candles at the base without long wicks.

Remember you can be flexible as long as you always keep the same risk, the wider the level the smaller the trade size, the narrower the bigger the trade size. Experience will tell you when you should be extending the proximal lines and cover the upper of lower shadows. As long as you use the same risk per trade it will be fine.

WHAT IS A DISTAL LINE AND A PROXIMAL LINE?
An area of supply or demand is not just a single price/line (like classic support/resistance), but a zone/area composed of a number of ticks.

For a supply zone, The highest part of that (rectangle) is the distal line, that is, the highest price in the zone. The lowest part of that rectangle is the proximal line, which is the lowest and the closest to current price.

There are some cases when you can adjust the proximal line:
• When there is a single candle at the base
• The candlesticks forming the base are tight and small, we can draw the proximal line covering the lower shadows (supply) or upper shadows (demand)

Note: There is no flexibility when it comes to drawing Distal line – it should always follow rigid rules as it is related to SL.

How to trade using Ascending Triangle, descending triangle and symmetric triangle Patterns?

May 15, 2021

How to trade using Ascending Triangle, descending triangle and symmetric triangle Patterns?

Triangle Chart Patterns are commonly used continuation chart patterns and are easy to trade as it follows the original trend. It can be found in all the time frames. Triangle is formed when there is a pause in trend for few candles. There are two converging trend lines, Rising trend line and falling trend line which forms Triangle pattern. There are three types of Triangle chart patterns.
• Ascending Triangle pattern
• Descending Triangle pattern
• Symmetric Triangle pattern

Ascending Triangle Pattern
The Ascending triangle pattern is formed by a horizontal resistance line with a rising support trend line. When this pattern is formed in the ongoing uptrend, it can signal a very reliable continuation of the uptrend. If you see the below picture, the ascending triangle has horizontal resistance line with a rising support trend line. Price must touch the trend line by at least two times to form a valid pattern. Upside breakout happens when the price breaks out the horizontal resistance line.

Descending Triangle pattern:
The Descending triangle pattern indicates a move to the downside. This pattern is formed with horizontal support line followed by a falling resistance line. You can see the pink horizontal support line along with the declining resistance line. Downside breakout happens when the price breaks below the support line.

Symmetric Triangle Pattern
The Symmetrical triangle pattern is formed when you have both rising support trend lines and falling resistance trend lines. The breakout in this pattern is very powerful and unlike Ascending or Descending triangle, symmetric triangle pattern can give breakout in either side. So we need to be little cautious here and wait till we get confirmed breakout. Confirmed breakout happens when you get a price close above or below the breakout point in respective time frame.

We can normally identify the potential breakout by looking the previous trend. If the previous trend is up then the chances of an upside breakout is much higher. Similarly, if symmetrical triangle forms in down trend then the chances of downside breakout is higher. Still, it is always better to wait till the price closes above Breakout point to have authentic breakout.

Yearly review of Investments from Market Secrets for FY 2020-2021

May 8, 2021

Yearly review of Investments from Market Secrets for FY 2020-2021

Welcome to yearly review of “Investment Alerts” channel from market secrets.

This video will focus on how we have invested during the entire financial year of 2020-2021. i.e From April 2020 to March 2021.

Before we start, we will make a simple assumption that our regular SIP investment amount is 10,000 rupees because we don’t want to reveal our actual numbers.

To keep all these simple, we used our “Investment Alerts” telegram channel. We just followed the alerts triggered in the channel to go and invest on the go. There was no need to any manual calculations or waiting. We will just blindly follow whatever that’s mentioned in the Alerts triggered.

As per the request of subscribers, we have created a separate channel for generating automated alerts for investments. Please use the below link to join InvestmentAlerts Channel in Telegram.
https://t.me/InvestmentAlerts

When the market was crashing in Jan-March 2020, we have released a video on how to invest during market crash and it worked beautifully. Though we couldn’t invest all the cash we have saved for investing in crash, the amount we invested using the strategy have really boosted the portfolio.

One year later, market is hitting record highs everyday and I was flooded with questions on how to invest in this raising market. So I have shared a video on personal investment approach for this scenario as well..

How to invest when market hist new lifetime high everyday?
https://youtu.be/2ik5e_LlKDo

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