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 April 2021. Note: These files contain data feed up-to 1 minute. We are providing…
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How to trade using Flag Pattern effortlessly?
Flag Pattern:
The flag is actually a continuation pattern and can be used to take breakout trades.
Bullish flag formations are found in stocks with strong uptrends. They are called bull flags because the pattern resembles a flag on a pole. The pole is the result of a vertical rise in a stock and the flag results from a period of consolidation.
After a steep rise in the stock price it will take sideways for sometime with small downside in price. This period is called consolidation and it is called Flag. The steep price increase is called a Pole. During the consolidation period stock is getting prepared for next up move.
Reverse is true for inverse flag formation, which can be used in downtrend.
One of the important factor during the flag breakout is a volume. We will see a sharp increase in volume when the breakout happens.
Flag formation:
The flag pattern forms what looks like a small channel either flat or sloping. The channel is formed by two parallel trend lines that act as support and resistance for the price until the price breaks out. In general, the flag will not be perfectly flat but will have its trend lines sloping
Time Frame
For positional trades use daily / Weekly / Monthly time frame and for intraday trading, you can use 3 min, 5 min, 15 min time frame. Longer the time frame stronger the breakout. When you use daily time frame ensure the breakout happens when the price closes above the trend line on a daily closing price basis. Same applies for weekly and monthly time frame.
How to calculate Target
The target is set based on the height of the Pole. Once flag or pennant gives price breakout above the trend line then we can expect it to achieve the height of the pole from the Breakout point.
Support levels
The flag top trend line becomes immediate support level after breakout and the bottom trend line is your final support. Keep the respective breakout candle low as immediate support. Weakness is shown once the price closes below the breakout point. But do not exit in panic. You can exit once the price closes below the bottom trend line of the flag.
How to draw supply and demand zones for piercing and dark cloud cover patterns?
What is Piercing Pattern?
Piercing patterns 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 but the 2nd candle is between 50-100% of first candle range. Piercing patterns can be bullish or bearish and can be a sign of a potential reversal of the current trend. Bullish piercing pattern is called as piercing pattern whereas bearish piercing pattern is also called as dark cloud cover.
HOW TO USE PIERCING 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 Piercing Pattern and Dark Cloud Cover pattern
• Piercing pattern = demand reversal pattern
• Dark Cloud Cover = supply reversal pattern
How to draw zone for Piercing & Dark Cloud Cover 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.
1. What are the Best Fixed Income Instruments with high safety in India (in 2021)?
2. How to generate 8.4 interest safely in india?
3. Which banks give high interest rate in FD or savings account?
4. How to get best return for FD?
5. How to get 7-8% return on debt products in India?
If you have any of these questions in mind, this video will provide solution for your queries.
Best Fixed Income generating assets in India.
1. EPF & VPF
2. Sukanya Samriddhi Account
3. PPF
4. Senior Citizens Saving Scheme
5. Pradhan Mantri Vaya Vandana Yojana
6. Post Office Monthly Income Scheme
7. Kisan Vikas Patra
8. National Savings Certificate
9. Savings Account of IDFC First Bank & FDs of IndusInd Bank & State Bank of Mauritius
10. RBI Floating rate savings bonds
How to setup Algo-Trading for Simple Breakout Trading Strategy?
Condition: It is very simple. If price breaks out above the previous day’s high, go long. If price breaks out below the previous day’s low, short. There is one additional check – price should have opened between previous day’s low and high
Script Setup:
I’ll go long if
• Today’s opening price is less than previous day’s high
• Today’s high is greater than previous day’s high (this is break out to upside)
• Current time is between 9.45 & 3.15
I’ll short if
• Today’s opening price is higher than previous day’s low
• Today’s low is lower than previous day’s low (this is break out to downside)
• Current time is between 9.45 & 3.15
This simple set-up can be used to create AFLs for any of the breakout patterns in including Flag, Triangles, etc. We will use this code as base template in future episodes to teach various breakout patterns.
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 March 2021. Note: These files contain data feed up-to 1 minute. We are providing…
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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 February 2021. Note: These files contain data feed up-to 1 minute. We are providing…
Read more
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 January 2021. Note: These files contain data feed up-to 1 minute. We are providing…
Read more
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 December 2020. Note: These files contain data feed up-to 1 minute. We are providing…
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What are the 3 types of Provident Funds?
Employee Provident Fund (EPF)
Voluntary Provident Fund (VPF)
Public Provident Fund (PPF)