Stock Market Course | How to learn Trading

In this Series of Blogs (Stock Market Course) I try to compile all the Concepts related to Basics of Stock Market, Derivative and Technical Analysis. As we know Indian share market presents many opportunities for investors & Traders but real problem is to find a plateform where learning  with Real Trades is possible, in this Stock Market Course series I tried to compile all my realtime learning experiences what I gained from real Trades.

Question-4

What is Contract Note & its specifications ?

कॉन्ट्रैक्ट NOTE क्या होते और इसकी जानकारी क्यों जरुरी होती है ?

Click this link to know what is Contract Note with real example

 

Question-11

What is Price Action and its important components ?

प्राइस एक्शन क्या है और इसके महत्वपूर्ण घटक क्या हैं ?

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Question-12

What are Important Candles & Candlestic Pattern?

ट्रेडिंग मे कैंडलस्टिक (या Candlestick Patterns ) का प्रयोग कैसे होते है ?

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Question-13

How to find Trend with the help of Chart Reading ?

चार्ट रीडिंग की मदद से डायरेक्शन (या Trend ) का कैसे पता चलता है ?

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Charts (or Chart Pattern) is a combination of different changes in a price of a security over a given period, It allows the Trader to take leveraged position ny predicting future price movement on the basis of existing(or Past) Price Action

Chart Pattern can be divided into 2 Parts :-

Continuation Chart Pattern & Reversal Pattern
Lets discuss them in a detail

Continuation Pattern happens in the middle of original Trend, after taking a pause Index or stock start moving in the original Direction. Refer below given image( we will discuss all possible types of continuation pattern in Next question)

 

 

 

Lets discuss second category of Chart pattern,Reversal Pattern it implies change in Trend. In short Bear or Bull loosing their grip and original Trend is in danger now Trader with existing position will close their position and will prefer to take contra(or opposite) Psoition. Refer below given SBI Chart

 

Price Action movemement can be categorised into 2 Parts :-

Trending (Uptrend/Downtrend) and  Sideway(Ranging)
Lets them discuss in details

Uptrend/Downtrend # If security is closes either higher or lower (in any given Period) is said to be Trending, Positive move is categorised as UPTREND & Negative Move is categorised as DOWNTREND

Sideway/Ranging # If Security is stuck in range between high & low (Resistance / Support ) this kind of Price Action broadly known as Sideway/Ranging Market, these consolidation in Price Action finally results into Trending Move

Breakout is Potential Trading opportunity on the Long side it occurs when Price climbs above the Resistance Level on the other hand if Price starts trading below the support level its a shorting opportunity and broadly known as Breakdown

Conditions for Genuine Breakout/Breakdown

• Strong volume,
• Significant Support/ Resistance,
• Breakout in Line with Long Term Trends,
• Low volume before breakout is a good sign,
• consolidation or sideway price action also plays an important role

ICICI Bank (75 Min Chart) between 12 Aug to 30 Aug

After consolidation stock after making Lower Low stock made a high ( Breakout), Entered on 12 Aug ( after breakout confirmation) confirmed almost all the above given conditions

SBI (75 Min Chart) between 02 Sept to 06 Sept

Lets discuss Support & Resistance in detail

 

• Support is a level where Stock take a rest(stop) for a while from there it takes a reversal
• If support is broken due to any reason stock try to find new supporting level at much lower point
• In reversal form of Trading, Trader Prefer to take a position at lower level and prefer to sell at resistance Zone
• If support is Broken and Stock start making Lower Low position this will be the time to take short position in the stocks ( Refer below given chart)

• Resistance is just opposite to the Support and its belived that selling pressure will come around this level
• If Resistance is broken due to any reason stock try to find new Resistance level at much higher point
• In reversal form of Trading, Trader Prefer to take a position at higher level and prefer to buy at support Zone
• If Resistance is Broken and Stock start making Higher High position this will be the time to take Long position in the stocks ( Refer below given chart)

After going through all the above discussion now we know that Trader main concern is to find Trend of the Stock and No doubt Trend is the real Friend of any Trader.

Gaps also plays an important role in enhancing (on analysis) of the Trend

Gap up in the stock or Index shows that People are impatient to buy and on the other hand Gap down in the Stock or Index shows that the People are impatient to sell

Lets discuss the Type of Gaps in detail :-

• Common Gap
• Breakaway Gap
• Runaway Gap
• Ehaustion Gap

Common Gaps are the outcome of routine Trading Activity usually  these gaps occurs  close fast
Major Reaons for these kind of Gaps :-

• Significant News or events,
• Change in Market sentiment
• Fundamental Factors like Dividend etc
• Technical Factors like Margin Call etc
• 

Breakaway Gaps is a gap which indicates a movement of Price action where Stock tries to come out from congesation Zone ( which can be quite Long), Breakaway Gaps shoul be accompanied with huge volume and it begins a new Trend

Runaway Gaps usually happens in the middle of original Trend it indicates that the Buyer who ealier missed the opportunity was sitting on sideline decided to join the runing Trend.

Ehaustion Gap occurs when a good uptrend or downtrend is about to end

Key featrures of this Kind of Gaps :-

• Huge difference between previous closing and Today opening Price,
• Huge volume intially
• After all this we find sudden fall in Price & Volume

Question-14

What are different types of Chart Pattern ?

कुछ मुख्य चार्ट पैटर्न कौन से है ?

Charts are the combinations of different candles, candlestick pattern, timeframe, it helps Traders in finding right direction and these Chart patterns works in all asset class (Gold,silver,Bond,stock etc)

Chart Pattern can be further divided into Two Parts :-

• Continuation,
• Reversal

Lets discuss all this category in details :-

1. What is Continuation Ascending & Descending Triangle Chart Pattern
2. What is continuation Bullish & Bearish symetrical Triangle
3. What is Pennat Pattern
4. What is Bullish & Bearish Flag Pattern
5. What is Rising & Falling wedge Pattern
6. What is Bullish & Bearish Cup & Handle Pattern 
7. What is Bullish & Bearish Rectangle Paatern 
8. What is Bullish & Bearish Basing Pattern(will be updated soon)
9. What is Bullish & Beraish Head & Shoulder Pattern (will be updated soon)
10. What is Ascending & Descending Channel (will be updated soon)
11. What is Broadening Top & Bottom Reversal Pattern( will be updated soon)
12. What is Right Angled Ascending & Descending Broadening Wedge Reversal Pattern(will be updated soon)
13. What is Ascending & Descending Broadering Wedge Pattern(will be updated soon)
14. What is Bump & Run (Top & Bootom) Reversal Pattern(will be updated soon)
15. What is Cup with handle (Top & Bottom ) Reversal Pattern(will be updated soon)
16. What is Rounding (Top & Bottom ) Reversal Pattern(will be updated soon)
17. What is Head & Shoulder ( Top & Bottom ) reversal Pattern(will be updated soon)
18. What is Diamond (Top & Bottom ) Pattern(will be updated soon)
19. What is Recatangle (Top & Bottom ) Reversal Pattern(will be updated soon)
20. What is Double (Top or Bottom)Revesal Pattern(will be updated soon)
21. What is Triple Top ( Top or Bottom) Reversal Pattern(will be updated soon)
22. What is Island (Top or Bottom) Reversal Pattern(will be updated soon)
23. What is Rising & Falling Wedge Reversal Pattern(will be updated soon)