Learn Stock Market Trading with Free Lessons & Tips

• Technical analysis involves

I. Market activity

II. Past prices

III. Volume

• It is a statistical method used to find a pattern and predict future movements based on previous market data.
• Concepts used in TA are moving averages, RSI, MACD, PRICE, VOLUME, etc.
• It is not expensive, and a single person can research the price data on most of the companies.

Dear All

This is a serious note that very few Professional Traders became successful in Trading.I analysed this winning ratio from many years and finally shocked when I know the real fact. Most of the traders are busy with searching for new Indicators, hunting for the next opportunities to trading Longs, Shorts, hedging in Markets. I agree that Research is most essential before taking any call. Along with this managing the risk, position-sizing, balanced mindset has to run the show.

 Dear Trader (as a reader)

A war between the heart and mind will always be there in every human being. In Trading let your mind wins the game as per pre-defined plan. Be prepared mentally and financially before taking a call. Do not wish, pray, greed or hope for booking profits, accept the reality and come out of your illusionary world.
Changing the plan while the position is open leads you to the road, so never let your trading plan to change towards your heart.
Adopt the right setup, Improve your trading skills, Keep your Trading journal for regular reviews and self Improvements.

Happy Trading!

Nowadays, most traders and investors in the stock market are very sceptical on a recent robust uptrend. The reason for scepticism is self-evident if economies around the world are sinking due to COVID 19, how can stock market rise and come to the level of before pandemic? Many investors booked profit earlier, and now waiting for a correction. Today I would like to explain this topic in detail.

First of all, we need to understand what is driving the market and how powerful it is. We need to look back Subprime crisis which came in 2008-2009. To fight with the recession, governments and central banks unleashed spending bazooka, and that became the foundation of the modern liquidity-driven era. Secondly, due to the advancement of technology and logistics cost of production has come down, which has put the lid on inflation. It has led the era of near to zero interest rate, especially in the developed world. Increasing government spending, quantitative easing by central banks and near to zero interest rate injected liquidity which is being sucked by the stock market mostly. The third driving force is the inclusive stock market. Due to advancement of technology, now everyone can invest in the stock market. Before 2000 only High net worth people were supposed to invest in the market. Now literally anyone can invest as there is no limit of minimum capital requirement, lower brokerage charges, and ease of investing. You can quickly transfer money to your Demat account and buy-sell instantly from your smartphone. So, the point is the number of shares available in the market is limited, but people coming to this market is increasing exponentially. India has plenty of space for penetration. Just look at the number of account opening since pandemic started.

Firstly,

You should know about yourself you are a trader or investor. If you a trader then what type of trader you are? 

Intraday trader or Positional trader, If you are a trader then you will have to choose stop loss and target in your trade. The averaging concept does not apply in trading.

So you need to choose the best stock for trading purpose. It can be cash or f&o stocks.

If you are new in the market then you should take a demo account. After 1 month you can trade in the stock market.

Banknifty opened Gap Down and continuously moved down. In the last two days, it almost falls more than 1200 points. We can capture this move from nearly the top of 23000.

On the hourly chart, the MACD signal gave bearish crossover yesterday, and we saw a good fall in Banknifty.

Gann Box:

FNO Data:

Trade Plan:

The daily VIX chart shows the formation of Doji candles at the bottom and reversal. The daily RSI crossed the previous resistance level of 40. The MACD signal gave bullish crossover suggesting bullish move in VIX. So the daily chart shows the possibility of VIX moving towards 28 levels in the coming days.

The weekly chart shows the formation of wedge and reversal from the bottom. VIX may move towards the upper wedge line @ 29-30.

So VIX suggesting the bearish mood of the market and hence the high possibility of fall in Nifty-50 and Banknifty in the coming days/weeks.

VIX Gann Box:

The daily Gann Box shows a reversal from the mid-zone of time factor points. The next time factor date is Jul-21. So will VIX continue to move high till Jul-21 or it will reverse from angle point? Wait and watch.

Using VIX to spot Intraday Reversal on Indices:

Recent examples of trade captured by me with this method:

Let me clear two assumptions for you now
1. All indicators either follow the price or lead-based on momentum but are dependent on the underlying stock. A stock with a clear trend and behaviour will also have signs which will give clear direction.
2. Every symbol has an active working percentage which is not stagnant. Like RSI can provide you 70-80% accuracy on a trending market, but if the market is sideways it's skill might go below 40%

So after you've understood the above, it's pretty simple.
For your question a) it may be because the market dynamics have changed and hence the indicator is less useful for the current scenario.
b) the index will always be based on the underlying stock, so if the stock is manipulated or has unclear/choppy trend, the indicator will also give ambiguous results.