Chart patterns for Dummies

[kdhrubo]

Hello All,
I am in the market for sometime, but every day in the market gives me learning and earning opportunity. Not to mention losses :lol:. But I think we must learn to earn in stocks. I have seen many threads here where people just post the charts and discuss. But that is not so easy for newbie like me into charting. Frankly its not so easy. Hence I thought of starting this thread where I will take up different charting pattern one by one - provide theory with examples. I am sure the GURUs and DADAs here will help us to identify and point out any wrong learning and assumptions on the way. Later when we are no more dummies we will take up real time charts and analyse them.

Gurus please help us too.

Regards ...dhrubo

 

[vjagra]

I can not judge level of your technical understanding, but you can check out the HDFC securities website. This site has a link - Knowledge Center - it contains a gold mine of technical information. Follow the link here

http://www.hdfcsec.com/KnowledgeCenter/

Also read their daily and weekly market reports - I have yet to any other place with real solid and succinct analysis with supportive charts.

You may also check out the investopedia site : http://www.investopedia.com/

Happy Learning !

 

[Say-yes]

Hello,

I second this and it would be a great venture and I promise you that this thread will be a super hit within few weeks.Even I keep wondering lot of times as to how an entry and exit has been placed and what is the logic. examples are given below.

Pls go ahead and start I am with you.





Regards
Say-yes

 

[kdhrubo]

I can not judge level of your technical understanding, but you can check out the HDFC securities website. This site has a link - Knowledge Center - it contains a gold mine of technical information. Follow the link here

http://www.hdfcsec.com/KnowledgeCenter/

Also read their daily and weekly market reports - I have yet to any other place with real solid and succinct analysis with supportive charts.

You may also check out the investopedia site : http://www.investopedia.com/

Happy Learning !

I am a dummy w.r.t to chart pattern. So this thread is for dummies where I expect gurus to help to keep us on track point out anomalies in understanding. We must understand the theory - examples, pros and cons of different charting patterns. This will enable us to then to test it and finally most important thing apply it in real case.

 

[kdhrubo]

Hello,

I second this and it would be a great venture and I promise you that this thread will be a super hit within few weeks.Even I keep wondering lot of times as to how an entry and exit has been placed and what is the logic. examples are given below.

Pls go ahead and start I am with you.


Regards
Say-yes

Thanks. I will come back later in the day and hit the road with HEAD and SHOULDER. Keep watching, reading , discussing and improve from dummy level.

 

[sunnyabhishek]

http://www.hdfcsec.com/KnowledgeCenter/ they have a goldmine of information regarding technical analysis

 

[kdhrubo]

Before I write about the theory - here is an awesome thread on this by none other than TRADERJI on Head and Shoulder.

http://www.traderji.com/technical-analysis/1308-head-shoulders-pattern.html

Coming Up....

Head and shoulder from a novice .....!

 

[Feel-me-knee]

This could become an unworkable discussion as:

1. There are some 140 chart patterns that I know of.

... ... ... ... That will make a whole lot of sub-threads, just to name them. ... ...

2. Most patterns have multiple interpretations. ( 'Beauty is in the eye of the beholder'. )

3. There are quite a few 'common' patterns that have legitimate but little known (even undocumented) variations.

Best of luck to you all !!!!!

 

[kdhrubo]

This could become an unworkable discussion as:

1. There are some 140 chart patterns that I know of.

... ... ... ... That will make a whole lot of sub-threads, just to name them. ... ...

2. Most patterns have multiple interpretations. ( 'Beauty is in the eye of the beholder'. )

3. There are quite a few 'common' patterns that have legitimate but little known (even undocumented) variations.

Best of luck to you all !!!!!

Hi,
Thanks for pointing this out. We know that too many cooks spoil the party. So I will only ensure we donot cross more than 10-15. It is an inhuman task for any boarder here to follow so many leave aside 140. So focus will be on the select few most widely used. I am sure the GURUs and veterans here will come to our rescue when we take up some undocumented or infrequently used pattern.

cheers ...dhrubo

 

[kdhrubo]

Introduction to Head and Shoulder (HS)
HS is a very popular and reliable chart pattern for TA. It is a reversal pattern indicating that the price of a stock is about to move in the opposite direction. HS comes in two variants as listed below:

• HS TOP - this pattern indicates that the price of a stock is going to fall.
• HS BOTTOM - this pattern indicates that the price of a stock going to rise.

I will try to explain each of the in more details in the coming posts.

Components of HS
HS pattern as the name suggests looks like a human being - with head, shoulders and neck. Hence the key components of a HS chart pattern are

1. Left shoulder
2. Head
3. Right Shoulder
4. Neck / Neckline

In the next few posts all of the constituents will be discussed in details.

Note
The pattern is confirmed only when the second shoulder is formed and this is followed by breaking of the neckline. Neckline as will be seen later will act as support or resistance depending on the HS variation.