Trading is not all about patterns/technical or fundamental analysis. Why? Most of the times it will be easy or maybe sometimes it will be complicated Anyhow, if you really want to be a great trader or investor, you need an observation. Again saying that you don't want to have the highest IQ or more of intelligence, all you need is simple logic or common sense. Coming to the point if you start observing the above chart, its clear cut selling from higher levels. Technical evidence is there as a shooting star plus followup selling pressure was exist. But the stock did not go down as the bookish concepts. Now if we start to observe the candlesticks, we may come to know what's happening to the particular stock I have marked the zone(downside wick potion), this is now a very crucial and interesting part to understanding the battle between bulls and bears. Exactly sellers are trying to sell, they are doing their job, but buyers are very strong and they are defending the sellers in...
What is the inner meaning of the double bottom? Whenever a stock comes to the support we look for buying opportunities. Here I am trying to explain the concept behind the double bottom. You have to be open-minded about the context, focus on the price instead of a pattern. If you observe the price alone, the stock started falling from the level “R”, i.e. said to be resistant. Now you need to find good support to buy. If you observe the price @ “1”, the stock is halting and taking a sort of up move called pullback. But we won't consider it as strong support. Why? Whenever the stock or market is falling we need strong evidence, to trade against the primary trend. Why should I not try to buy @ level “1”? The reason is so simple, whenever sellers start selling from higher levels, after some correction they might recover the stocks at a cheaper price, that might be the reason to first-time bounce. And the second reason is logic: when the first bounce is happening retailers will come to...
Why market goes against traders? Trading is a ZERO sum game, so if someone is making money means, others are losing. So institutions, hedge fund managers, FII's & DII's and even you & I all against each other. But in the trading game all we will have plans and technical analysis, indicators, opinions and emotions... etc. In this game who ever having huge capital is said to be a big player or simply institution. They want to make big money, so they need losers. Obviously retailers will be the losers. Why retailers lose the money? They come up with little capital, they used to take leverage, So big players can easily shake out them and hunt their stop loses every time. Institutions can create panic/pressure by creating "oscillation/swings" in the markets. So whoever having positions they will exit if markets against them. Even if they have the tendency to fight against the "MARKETS", they can't bare huge loses. Because "the market is so big...