INTRODUCTION

Market Is Constantly Changing Day By Day And There

Are Something Which Is Fixed And Something That

Changes With Time That's Why We Wrote This Book To

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Make Traders Friendly With The Topics Like Price

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Action, Trading Plan ,Traders Descipline, Traders Health

nd And Many More Thing.

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Our Main Aim Behind Writing This Book Was To Provide

e
h
True And Genuine Knowledge Of Stock Market At A

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Very Low Price That's Easily Accessable To Every Strata

Of This Society.

ashish kumar mishra

B.Com ( fin), Banaras Hindu University

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 PRICE ACTION TRADING

Price Action Trading Is An Approach Where Our Main Focus Is On

The Movement Of Price. Because Price Is What Everyone Tracks In

Market. In Price Action Trading A Trader Studies The Price Deeply

And After Analyzing It Then Try To Make Conclusion Of What Price

Wants To Show Us.

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il n
Price Action Trading Constitutes of Support , Resistance , Trend,

Consolidation & Breakout

PRICE ACTIONn
d

TRADING

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 INTRODUCTION

Market is constantly evolving every single day .But

there are something's which remain unchanged and

something's which changes with time. That's why we

ine
wrote this book to make Traders friendly with the

l
Topics Like Price Action, Trading Plan ,Traders

nd
Discipline, Traders Health And Many More Thing.

tre

e
Our main aim behind writing this book is to provide

th
True And Genuine Knowledge Of Stock Market At a

"Very Low Price". That's Easily Accessible to every strata

of this society.

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 CHART
Charts are the graphical representation of price And price is the
mouthpiece of market, because in market price is one of the most
important things in market. So for tracking price we need to track
chart and Different charts have different perspective. Here I have
shared some important & widely used types of chart.

TYPES OF CHART

LINE CHART

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Line Charts are one of the oldest and widely used Charts. While
drawing Line Chart, closing price is considered in plotting of
chart.

Line Chart is mainly used to identify the Ongoing trend in

market, which helps the trader Or investor in taking trade on
trending side.

Line Chart can be good for beginners because it's easy to use
and beginners can easily understand it also.

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 HEIKIN - ASHI CHARTS

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It looks like a candlestick chart pattern, And It also helps in the

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same way. But in it we can avoid noise, unlike candlestick patterns.

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It Can Be Used To Spot Market Trend.

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Formula Used For Heikin Ashi Candle

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Close = 1/4 [ Open + High + Low + Close ]

Open = 1/2[ Open Of Previous Bar + Close Of

Previous Bar ]

( Average Of Current Candle )

High= Maximum [ High, Open, Close ]

( Mid Point Of Previous Bar )

Low = Minimum [ Low, Open , Close ]

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 CANDLESTICK CHART

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The concept of candlestick chart was Born In Japan and in the 1990s it

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gained recognition in the West and from there it hasn't seen any

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reversal in its Popularity.

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Candlestick Chart is mainly used to study Psychology or Behavior of

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Masses. It helps trader in gaining information about what masses are

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thinking and where the maximum amount of trades are taking place.
And this information helps in moving with the Stronger Hands In
Market.

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 CANDLESTICK PATTERN
As You Know Candlestick Charting Technique Is Mainly Focused By Us
So Now We'll Be Discussing About Candlestick Patterns In Details.

A CANDLESTICK

]
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HIGH

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WICK
WICK

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OPEN

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BODY

BODY

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CLOSE

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OPEN
WICK
] ] WICK
LOW

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 HAMMER

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Hammer Is A Single Candlestick Pattern Where The Spread In

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Open And High Is Very Low And the Size Of Wick Is Twice The

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Size Of Body.

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Hammer Formed On Support Suggests That Buyers Are

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Showing Interest In Taking Price Up And Size Of Wick Is A

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Clear Indication Of This.

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 INVERTED HAMMER

Inverted Hammer Is A Single Candlestick Pattern Where The

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Difference In Spread Is Very Small And the Minimum Size Of Wick Is

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Twice The Size Of Body.

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The inverted Hammer Is Treated As a Bullish Pattern When Close Of

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the Next Candle Is Above the Body Of the Inverted Hammer.

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 DOJI

Doji is a candlestick pattern which has nearly the same open

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and close. Doji indicates that both Buyers And Sellers tried to

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take price in their direction, but they failed to do so.

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Doji Is A neutral candle because in this strength applied by

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both the buyers and sellers are same, and they successfully

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neutralized by each other's effort.

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 DRAGONFLY DOJI

Dragonfly Doji Also Comes In Category Of Single Candlestick Pattern.

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There Is No Or Marginal Difference In Open And Closing Price And

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Size Of Wick On Lower Side Is Big.

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It Indicates The Aggressive Buying In Market And If It Is Formed At

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Support Or Demand Zone Then It Can Be Good Signal For Buy With

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A Small Stop Loss.

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 SPINNING TOP

Spinning Top Is A Candlestick Where There Is Small Difference In

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Open And Close And That Lead To The Formation Of Small Body.

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Spinning Top Is A Neutral Candle Because Here Both Buyers And

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Sellers Tried Their Best To Take Price In Their Direction, But They

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Failed To Do So Because They Themselves Neutralized Each Other's

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Force.

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 BEARISH ENGULFING

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Bearish Engulfing Pattern Is Double Candlestick Pattern. In This

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Pattern, the First Candle Is Bullish And the Second is Bearish Candle.

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The first Candle Body is Engulfed (Covered) By The Next Candle,

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which shows that Sellers took over the Ground From Buyers.

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If this pattern Is formed after Gap Up/Gap Down Opening or at

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Resistance, then we can go for a Sell Side Trade with a Small Stop

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Loss.

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 BULLISH ENGULFING

Bullish Engulfing Pattern Is Double Candlestick Pattern. In this pattern,

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the first candle is Bearish And the Second Is Bullish Candle. The first

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Candle Body is engulfed (Covered) by the next candle, which shows

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that buyers took over the Ground From Sellers.

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If this pattern is formed after Gap down/Gap Up Opening or at

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Support, Then We Can Go For A Buy Side Trade With A Small Stop

t Loss.

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 THE
TRENDLINE
 PIERCING PATTERN

The piercing Pattern Is A Double Candlestick Pattern. In this

pattern, first candle is a Bearish Candle and second one is a

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bullish candle which pierce into the Body Of Second Candle

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(Minimum 50% Is Needed).

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This Candle Suggests That Buyers Have Tried To Take The

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Ground From Sellers, But They Were Unable To Capture The

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Entire Area.

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This can also be a Good Trade Signal if Formed On Support or

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if the Market Opened With Gaps.

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The reliability of this Pattern Is Less than the reliability of the
Bullish Engulfing Pattern.

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DARK CLOUD COVER

Dark Cloud Cover Pattern is a Double Candlestick Pattern.

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In this pattern, the first candle is a Bullish Candle and

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second is a Bearish Candle which Pierce into the body of

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the second candle (Minimum 50% Is Needed).

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This candle suggests that sellers tried to take the Ground

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From buyers, but They were only able to capture some area.
This Can also be a Good Trade Signal if formed on support

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or in a market opened with gaps.

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Reliability of this pattern is less than the bearish Engulfing
Pattern.

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 BULLISH HARAMI

Bullish Harami Is A Double Candlestick Pattern .In This Pattern, the

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First Candle Is A Bearish Candle And the Second One Is a Small

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Green Candle Formed Within The Body Of A Previous Candle.

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This Candle Suggest That Buyers Are Attempting To Take The

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Ground From sellers, but their effort Is not that strong. If It Is

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Formed At Support/ Demand Zone Then This Can Be Considered A

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Good Buy, But Waiting For Some Other Bullish Candle Is

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Recommend To Increase The Chances Of Winning.

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 BEARISH HARAMI

Bearish Harami Is A Double Candlestick Pattern. In this pattern, the

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first candle is a bullish candle and the second is a small red candle

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formed within the body of a previous candle.

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This candle suggests that buyers are attempting to take the ground

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from sellers, But their Efforts are not that Strong. If it is Formed At

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Resistance/ Supply Zone, Then This Can Be Considered A Good

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Shorting Opportunity, But waiting for some other bearish candle is

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recommended to increase the Chances Of Winning.

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 TWEEZER BOTTOM

Tweezer Bottom is a Minor Reversal Pattern formed, when Lows

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of the Two Candles are the Same, then it is said a Tweezer

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Bottom Pattern. The reliability of a Tweezer Bottom Increases

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when it is formed with Other Pattern . Like if it is formed then

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Both the Candle Also Have Same Lows But The Second Candle

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Also Covers The First Candle. Now This Can Be Both Tweezer

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Bottom And Bullish Engulfing Pattern.

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 THREE WHITE SOLDIERS

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TWS Consist Of Three Back To Back Bullish Candles. Which Indicates

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Strong Bullish Shift In Momentum.

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Using this with other Technical Indicator Increases its Reliability. If

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Three White Soldier is formed when RSI Is In Oversold Zone.

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 TWEEZER TOP

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Tweezer Top Is A Minor Reversal Pattern Formed When High Of

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The Two Candle Is the Same ,then it said A Tweezer Top Pattern

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And Reliability Of A Tweezer Top Increases When It is Formed

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With Other Patterns. Like If It Is Formed Then Both The Candle

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Also Have Same High But The Second Candle Also Covers The

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First Candle. Now, This Can Be Both Tweezer Top And Bearish

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Engulfing Pattern.

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 BULLISH KICKER

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Bullish Kicker Is A Two Candlestick Pattern And Is Rarely Available

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Pattern. In This Pattern, the First Candle Is A Bearish Candle And

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The Second Candle Is A Bullish Candle Where Opening Price Of

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Both The Candle Is Same (Gap Up Opening Can Be Considered

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More Powerful). This Indicates A Strong Change In Sentiments In

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the Market From Bearish To Bullish.

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 BEARISH KICKER

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Bearish Kicker Is A Two Candlestick Pattern And Is Rarely Available

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Pattern. In This Pattern, the First Candle Is A Bullish Candle And The

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Second Candle Is A Bearish Candle Where Opening Price Of Both The

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Candle Is Same (Gap Down Opening Can Be Considered More

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Powerful). This Indicates A Strong Change In Sentiments In the Market

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From Bullish To Bearish.

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 BEARISH ABANDONED BABY

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Bullish Abandoned Baby Is A Three Candlestick Pattern Which

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Suggest Temporary Reversal In Downtrend.

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In Bullish Abandoned Baby, First Candle Is Bearish Candle And

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Second Candle Gaps Down And It Is A Doji Candle And Third

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Candle Gaps Up And It Is A Bullish Candle Which Shows

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Aggressive Buying.

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 THREE BLACK CROW

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TBC Is A Three Candlestick Pattern Which Consist Three Back To

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Back Bearish Candle And It Shows Strong Shift In Momentum.

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Using This Pattern With Some Momentum Indicator Like RSI Can

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Increase The Chances Of Success.

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 EVENING STAR

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Evening Star Is A Bearish Candlestick Pattern Which Consist Three

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Candlestick & As The Name Suggest, You'll Find This Candlestick

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At The End Of An Uptrend.

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The first Candle Is A Bullish Candle And the Second Candle Can Be

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A Doji Or Spinning Top Which Indicate Indecision In the Market. The

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third Candle Is A Bearish Candle Which Should At Least Close

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Above 50% Of The First Candle's Body.

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 MORNING STAR

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Morning Star Is A Bullish Candlestick Pattern Which Consist of

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Three Candlestick & As The Name Suggest, Find It At The End Of

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The Downtrend.

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The first Candle Is A Bearish Candle And the Second Candle Can

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Be A Doji Or Spinning Top Which Indicate Indecision In the Market.

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The third Candle Is A Bullish Candle Which Should At Least Close

th Above 50% Of The First Candle's Body.

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 BULLISH ABANDONED BABY

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Bearish Abandoned Baby Is A Three Candlestick Pattern Which

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Suggest Temporary Reversal In Uptrend.

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In Bearish Abandoned Baby First Candle Is Bullish Candle And

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Second Candle Gap Up And It Is A Doji Candle And Third Candle

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Gaps Down And It Is A Bearish Candle Which Shows Aggressive

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Selling.

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 TREND

HH
LH

HH LH
HL
LL
LH
HH HL LL

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LL
HL

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Trend Is One Of The Major Constituent Of Price Action Trading
And There Are Two Types Of Trend, Uptrend and Downtrend.

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Uptrend Is When Price Moves Upside By Forming Higher High

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And Higher Lows.
Downtrend Is When Price Moves Downside By Forming Lower
Lows And Lower High.
Many Trader Prefer To Take Trade On the Side Of Trend
Because It Increases The Chances Of Winning.
There Are Many Traders Who Love To Take Counter Trend
Trade Or Reversal Trade. They Wait For The Breach Of
Previous Higher High In Uptrend And Lower High In
Downtrend.

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 TREND

HH

HH

HL

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HL

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UPTREND

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LH

t LH

LH

LL

LL

DOWNTREND

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 CONSOLIDATION

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Consolidation Is A Phase Where Market Moves In A Range And

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There Is No Limit For It That How Long It'll Will Take To Break That

t Range.

It Is Said That If The Consolidation Is Small Then The Trend After

Breakout Will Be Small Or Vice Versa

You’ll Find Price Consolidating Whenever There Is Buying Or Selling

By Smart Money Or Operators In the Market. This Particular
Behavior Is Known As Accumulation & Distribution.

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 CONSOLIDATION

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ACCUMULATION
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Accumulation Is A Phase Where The Big Investors Or

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Operators Enter A Market And They Keep The Market In Range

So That They Can Buy in large Quantity.

Accumulation Mainly Take Place In Lower Levels Or At The

Bottom Of Downtrend. You Can Easily Find Accumulation With

The Help Of Volume, Because Whenever There Is

Accumulation Going On, Find Increase In Volume When Price

Rises And Decrease In Volume When Price Reduces.

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 DISTRIBUTION

DISTRIBUTION

ACCUMULATION

ACCUMULATION

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ACCUMULATION & DISTRIBUTION

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DISTRIBUTION

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Distribution Is A Phase Where Operator Or Big Investors Sells

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There Quantity And They Try To Keep The Market In Range Till

The Time They Aren't Able To Sell There Quantity.

Distribution Mainly Take Place At Higher Level Or At The Top

Of An Uptrend. You Can Easily Find Distribution With The Help

Of Volume, Because Whenever There Is Distribution Going On

You’ll Find Increase In Volume When Price Decrease And

Decrease In Volume When Price Rises.

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 ACCUMULATION

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ACCUMULATION

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DISTRIBUTION

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DISTRIBUTION

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 BREAKOUT / BREAKDOWN

Retest

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BREAKDOWN

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Breakout Is When Price Breaks From An Congestion Area On

the Chart And It Can Be Break Of Consolidation, trend line Or

Pattern Breakout. After Breakout, A New Trend Starts And The

Length Of The Trend Depends On Time & Volume Force Used

For Breakout.

In Market Success Ratio Of Breakout Is Very Low So Waiting

For Retest Or Consolidation After Breakout is recommended.

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 BREAKOUT / BREAKDOWN

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Increasing Volume

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When Price Gives Breakout /Breakdown Then We Should Track

The Volume And If The Breakout/Breakdown Is Supported With

High Volume Then We Should Consider This For Trading.

Retest Of Breakout/breakdown Level Should Be Supported With

Low Volume, Then We Can Consider This As Genuine

Breakout/Breakdown And We Can Trade It With Stop loss.

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 SUPPORT AND RESISTANCE

You Might Have Continuously Heard About History Repeats

itself in Market.
A Trader Uses This Concept For Both Sideways And
Trending Market.
In Sideways Market, Trader Uses This Concept For Simple

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Buying On Support And Selling On Resistance & In Trending

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Market Traders Use This Concept For Breakout Trading

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Approach.

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SUPPORT

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Support Is An Area Or Price On Chart Where Price Have Visited

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In Past And Now Again Price Is Revisiting That Area And When
Price Visits That Price There Is A Good chance Of Upside
Reversal In Price.

But It's Not Mandatory That Price Will Surely Take Rejection
From That Level. So We Need To Wait For Consolidation Or
Rejection From This Level. So That We Can Enter A Trade.

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 RESISTANCE

SUPPORT

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RESISTANCE
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In Short We Can Say That Resistance Is Just Opposite Of

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Support And Here Also The Same Concept Works Where The
Price Higher Then The Current Price Where Most Of The Time
Rejection Is Faced By Price Is Act As Resistance.

We Cannot Directly Go For Selling If We Find That Price Is At

Resistance. What We Need To Is Wait For Price Rejection Or
Any Other Signal Which Support That There Is Weakness In
Chart.

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 CHART PATTERN

DOUBLE TOP DOUBLE BOTTOM

= =
STOP LOSS
NECKLINE

NECKLINE STOP LOSS

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TARGET = HEIGHT OF PATTERN TARGET = HEIGHT OF PATTERN

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DOUBLE TOP & DOUBLE BOTTOM

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Double Top And Bottom Have Great Importance And It Can

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Be A Good Opportunity For Trade.

Double Top Forms When The New High Is Unable To Break

The Previous High Of Trend (Higher High And Higher Low),

And It Closes At The Same Level Then It Is Called Double Top

And Same Applies In Double Bottom But Here We Consider

Lower Lows And Lower High.

Entering A Trade Is Recommend When Price Breaks The

Neckline Of the Pattern.

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 DOUBLE TOP

STOP LOSS

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DOUBLE BOTTOM

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STOP LOSS

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 HEAD AND SHOULDER

HEAD

LEFT SHOULDER RIGHT SHOULDER

= =
STOP LOSS
STOP LOSS

= =
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LEFT SHOULDER RIGHT SHOULDER

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HEAD

ndTARGET = HEIGHT OF PATTERN

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Head & Shoulder Is An Bearish Pattern And It Indicates That There

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Is Going to Be Good Chance Of Bearishness In Stock If It

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Successfully Breaks The Neckline In Downside.

Head And Shoulders Can Also Act As A Continuation Pattern If It Is

Formed In Downtrend.

Inverted Head And Shoulder Is An Bullish Reversal Pattern And It

Also Acts As Bullish Continuation Pattern.

Continuation patterns are those chart patterns which indicates

continuation of prior trend. eg flag pattern, wedge, inverted H&S
Pattern.

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 HEAD AND SHOULDER
HEAD

RIGHT SHOULDER

LEFT SHOULDER
STOP LOSS

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INVERTED HEAD AND SHOULDER

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STOP LOSS

LEFT SHOULDER
RIGHT SHOULDER

HEAD

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 TRIANGLE PATTERN

There Are Many Types Of Triangle Pattern Like Ascending

Triangle, Descending Triangle And Symmetrical Triangle.

Each Of These triangles Have Different Significance. Like

Descending Triangle Is A Bearish Pattern And If Price Break

Downside Then There Is Good Chances Of Downside In Stock.

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en
tr STOPLOSS STOPLOSS

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SYMMETRICAL TRIANGLE

The symmetrical Triangle Is Not Biased Towards Any Of The

Side, But If There Is A Breakout On Either Side Then There Is

A Good Chance Of Run-up On That Side Of Trend.

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 ASCENDING PATTERN DSCENDING PATTERN

STOP LOSS
STOP LOSS

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ASCENDING TRIANGLE
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Ascending Triangle Is A Bullish Pattern, So After Breakout Of

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This Pattern We Can Go For A Buy Position With A Small Stop

t
Loss . Target For This Pattern Is High Of The Pattern Or Height

Of Pattern.

DESCENDING TRIANGLE
Descending Triangle Is Opposite Of Ascending Triangle And If

Price Breaks On Downside Then There Is Good Chances Of

Downside Run-up In Stock.

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SYMMETRICAL TRIANGLE

STOP LOSS

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DESCENDING TRIANGLE

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STOP LOSS

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ASCENDING TRIANGLE

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STOP LOSS

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 FLAG

STOP LOSS

STOP LOSS

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Bullish
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Bearish

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The flag Pattern Is Formed When There Is A Big Rally (Forming

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Pole) And That Rally Halts For Correction Then The Flag Pattern

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Forms.

Flag Pattern Is Of Two Types, Bullish & Bearish. Bullish Flag Is

Tilted To The Downside And You’ll Find This In Uptrend, And
Bearish Flag Is Tilted Upside And You’ll Find This Pattern In
Downtrend. (You Can Also Find Bullish Flag In Uptrend And
Bearish In Downtrend, But Their Success Ratio Decreases)

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 WEDGE

STOP LOSS

STOP LOSS

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Bearish
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Bullish
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A wedge Pattern Is Formed When There Is Consequent Decrease

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In The Gap Between Higher Highs (In Case Of Bearish Wedge) Or
Lower Lows (In Case Of Bullish Wedge).

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 STOPLOSS

STOPLOSS

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ROUNDING BOTTOM / ROUNDING TOP

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Rounding Top Is A Bearish Pattern And It Takes Longer Time To

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Form. Rounding Top Is One Of Most Favorite Pattern Of Long-

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Term Investors For Booking Their Profits In Cyclical Sectors.

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Rounding Bottom Is A Bullish Reversal Pattern, And This One
Also Takes Longer Time To Form. Investors Love This Patterns
Because This Gives Them Opportunity To Take Early Entry In
Cyclical Sector Stocks.

These Patterns Follows The Structure Of .

Rounding Top - Uptrend ➡ Consolidation ➡ Downtrend

Rounding Bottom - Downtrend ➡ Consolidation ➡ Uptrend

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 ROUNDING BOTTOM

STOP LOSS

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ROUNDING TOP

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STOP LOSS

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 STOPLOSS

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STOPLOSS

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CUP & HANDLE / INV CUP & HANDLE
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Cup And Handle Is A Developed Version Of Rounding Bottom
Pattern, And They Both Indicate Expectedly Bullish Reversal.

Inverted Cup And Handle Is a Developed Version Of Rounding

Top, And They Both Indicate Expected Bearish Reversal.

These Patterns Are Formed When Price Fails To Break The

Resistance Of Rounding Bottom/Top Pattern And After
Pullback It Again Tries To Break That Level.

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 CUP AND HANDLE

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STOP LOSS

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INVERTED CUPeAND HANDLE

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t STOP LOSS

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 VOLUME

Everyone Try To Catch Operators By Looking At The Upper Side

Of Graph But In Reality The Truth About Operator Lies In The
Lower Corner Of Chart That Is Volume Bar.

Operators Can Hide Everything From You But They Can't Hide

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Volume And That's Why Volume Becomes One Of The Most

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Important Thing On Charts.

nd
Below Are The Some Example Where You Can See How An

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Operator Tries To Trap Retailers In Market.

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Consequent Increase In Volume
Shows Strength In Trend.

Low And Below Average Volume On Pulback Shows Strength Is Still There In Ongoing Trend

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 VOLUME

ine Strength Weakness In

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In Trend Trend

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In Case 1 Operators Artificially Bought The Price Down To Check That There Is Anybody Sitting
With Huge Quantity Or Not And Next Time Also They Did Same But They Didn't Found High
Volume There And They Continued The Rally. .

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 VOLUME

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Price Was Coming Down With Increasing Volume, But The Size Of Candles Were Not That Big

t
That Can Show Strength To Move. In the Green Candle We Can See Volume Was Above
Average And More Than Previous Candle. Wick Of That Green Candle Also Showed That There

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Was Sufficient Buying On Lower Side That Supported The Price Movement.

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 GAP

Gap Is Now A Very Common In Market And Many Of The Traders

Find IT Difficult To Trade It. Because This Changes The Risk
Reward Of A Trade And Due To This Traders Also Have To Make
Certain Changes In Their Plans According To Market.

e
So Now We'll Discuss How To Trade Gaps Because Gaps Acts As

in
An Important Support And Resistance Area On the Chart. This

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Helps To Take Some Good Trades.

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tr
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t Gap Gap

Novice Gap Pro Gap

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 HOW TO TRADE THESE
GAPS?

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NOVICE GAP l
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Novice Gap Is When Price Opens Above The Previous Close And It

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Stays Above IT Only . For Trading These Kinds Of Gap Always Let

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The Price Make Base And When It's Confirmed That Price Has Made
A Strong Base Then Go For A Trade With Small Stop Loss.

You Can Confirm Your Entry With Any Candlestick Pattern Like Here
In The Above Image It Is Confirmed With A Bullish Engulfing
Candlestick Pattern. If I Had Traded in This stock, Then My Entry
Would Have Been Above the Engulfing Candle Closing Price, And My
Stop Loss Below The Wick Of the Engulfing Candle. Latter On, I
Would Have Trailed It Below The Opening Price Of Engulfing Candle.

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 ine
PRO GAP l
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tr e
Pro Gap Is When Price Opens Above The Previous Close, But It's

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Unable To Stay Above the Previous Close. For Trading This Kind Of

t
Gaps, Let The Price Break Below the Previous Day Close Because
This Acts As An Important Support.

In The Above Image, You Can See That Price Managed To Break
Above The Previous Close And It Successfully Retested That Level.

If I Were To Trade This Gap, Then I Would Have Let The Price Retest
The Breakout Level And After That I Would Have Waited For Any
Bullish Candlestick Pattern To Form, So That I Can Enter With A Stop
Loss Below Previous Day Close.

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 STOPLOSS

swings for placing sl for short trade

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swings for placing stoploss

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for long trade

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Stop Loss Is a Very Important Weapon In A Trader's Arsenal. It

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Helps Them In Limiting Their Losses.

th

Stop loss Can Be Place Under The Second last(I Prefer) Or Last
Swing Of The Move.

Gaps Can Also Act As An Important Level For Placing Stop loss.

An Intermediate Trader With Proper Position Sizing Should Prefer a

Candle Close Below Or At Their Stop loss Level To Exit Their Trade.

POSITION SIZING = 2% Of CAPITAL / ENTRY - STOPLOSS

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 ENTRY
ON PULLBACK ON BREAKOUT

morning star dark cloud cover

bullish engulfing

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bullish engulfing

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Entry Plays The Most Important role In Any Of The Trade, And Many

t
Traders Find It Difficult.

h
So Here Is The Process Which I Prefer For Entering A Trade. Whenever

t
Price Breaks The Important Level (Support / Resistance) Then I Wait For
The Retest And On Retest I Wait For The Candlestick Pattern Formation
Which Helps Me In Confirming The Strength Of Move.

In Case Of Trading Range Or If Price Takes Rejection From Support /

Resistance, Then Also I Wait For The Formation Of Candlestick Pattern
Formation.

Volume Also Plays An Important Role In Entry Because It Helps In Checking

the Strength Of Ongoing Trend.

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 TARGET

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for chart pattern and consolidation

he
t
Placing A Target At Right Place Helps Us In Achieving The Economic
Objectives In Our Trade.

The target Can Be Placed At the Next Support / Resistance, Or It Can

Be The Height Of the Chart Pattern Or Consolidation.

In Many Cases If We Are Not Able To Find Support / Resistance Then

We Can Use Fibonacci Extension Levels For Placing Our Target.

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 THE PROCESS
What A Trader Should Do Before And After Entering A Trade ?

Step 1 — Do Pre Market Analysis For The Next Day

Step 2 -Now Calculate Your Position Size

Position Size — Difference In Entry And Stop Loss/2% Of Your Trading

Capital.

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dl
Step 3 — Track The Opening Of Asian Markets In Morning And

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Specially SGX Nifty.

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Step 4 — Now Check That the Market Or Your Stocks Are Working

he
According To Your Plan Or Not.

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Step 5 — If Any Of Your Stocks Are Working According To Your Plan,
Then Enter With A Stop Loss.

Step 6 — If One Stop Loss Gets Triggered, Then Avoid Trading On

That Day.

Step 7 — Write down your Mistakes And Trade In Your Trading

Journal.

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 DISCIPLINE IN TRADING

i n e
l
Trading Discipline Is Something Which Everyone Talks About, But

d
Nobody Says Why It’s Needed And How To Work On It. Here We’ll Be

e n
Discussing What Is Trading Discipline ? Why Trading Discipline Is

r
Important ?, And How We Can Work On It.

e t
What Is Trading Discipline ?
t h
When We Talk About Trading Discipline, That Doesn't Mean
Following Your Trading Plan Strictly. Here We Are Talking About
Overall Discipline Of A Trader And This Include Your Habits You
Follow In Daily Life.

Trading Discipline Include How Much Time You Are Focusing On

Your Personal Growth By Following Some Routine On Your Overall
Development Of Physical, Mental & Spiritual Health. We'll Discuss
Each Of These Topic In Details In This Book.

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Why Trading Discipline Is Important ?
It Is Important Because As A Trader You Need To Keep Yourself Well
Managed. Because You Are The Only Asset Which Will Pay You As
Good Trader.

in e
d l
How We Cane n On It ?
t r Work

h e
You Can Work On It By Following Your Daily Routine. Yes I Know

t
That You Have Been Said To Follow Your Daily Routine Many Times
In Your Childhood But You Didn't Take It Seriously. This Time Also
You Can Ignore, But Remember As Trader You Better Know That
For Gaining Something You Need To Lose Something (Relate It To
The Concept Of Risk Reward). So It's Totally On You That You Want
To Become A Trader,Then Follow This Or Otherwise You Can Just
Skip This.

Now We'll Cover Physical Health, Mental Health & Spiritual Health
In Details.

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 MENTAL HEALTH

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Yes It's About Your Mind, Your Mental Peace. Take A Pause And

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Think, What Is The Most Important Thing You Use While Trading.
Obviously It's Your Mind Which You Use Most Of The Time While
Trading. From Entering A Trade To Exiting A Trade And While Holding
Your Trade. So It's You Who Need To Take Care Of Your Mental
Health.

You Can Go For Simple Meditation To Work On Your Mental Health

And You Can Start With Doing 15min Meditation Daily And Gradually
Increase The Duration if you want.

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 SPIRITUAL HEALTH

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n
No It's Not Related To Religion But It Follows Some Concept Of It.

e
And Now Before Moving Forward Let Me Discuss A Concept Of

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Religion Which Says That You Need To Focus On Process Not On

e
Result.

th
Now Relate This Concept To Trading, In Trading The Most Important
Thing Is The Process You Follow To Take A Trade (Your Trading
Plan). If You Take A Trade For Just Making A Big Profit, Then Please
Avoid Trading Because With This Attitude You Can Lose Your Entire
Capital. Always Remember That Market Is Supreme And You Need
To Catch The Opportunity That Market Gives You, Not The
Opportunity You Create Yourself For Making Big.

So Always Remember In Your Trade, Process Is More Important Than

Your Result.

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 PHYSICAL HEALTH

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dl
n
Yes You Guessed It Right, Here We Are going to Talk About How You

re
Manage Your Physique. But Before Moving Further, Let Me Relate It

t
To Your Trading. As A Trader You Are The Most Important Assets For

he
Your Trading Career. Because Here Is only you Who Is Working To

t
Build Your Trading Career, And If You Fall Sick Or You Feel Unwell
Then All Your Trading Work Stop You Won't Be Able To Trade Or If
You Do It Forcefully Then Your Chances Of Making Loss Increases
And That's More Dangerous Than No Profit.

Always Remember You Can Hire A Driver For Your Car But You
Cannot Hire Anyone For Yourself. So Focus On Your Physical Health
From Now Only.

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 THE TRADING PROCESS FLOW CHART

STEP - 1

Analysis Of Market
( Nifty / Sensex )

STEP - 2

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Sector Analysis

e n Sector Analysis

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Sideways
( Bullish ) ( Bearish )

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th
STEP - 3
( Stock Level )

Analysis Of Individual
Stocks In Identified Sector

WHEN MARKET IS BULLISH/BEARISH GO WITH BULLISH/BEARISH SECTOR STOCKS.

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 EMA STRATEGY
You Guys Must have Heard About EMA But Hardly Any Of You Know
How To Trade It.

Exponential Moving Average (EMA) is average of pervious price of a

particular period like ( 10EMA, 20EMA, ) . While calculating EMA more
importance is given to the recent prices and this makes it more reliable
over Simple Moving Average

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There are 2 Strategies For Trading EMA

n
GOLDEN CROSSOVER
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tr
h e
t 50 EMA

200 EMA

Golden Crossover Is When Short-Term EMA Crosses The Long-Term

EMA ( E.g. EMA 50 Crosses / EMA 200 ).

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But Only Buying On Simple Crossover Doesn't Increase Your Chances
Of Winning. For Increasing Your Winning Chances, You Can Use It With
Price Action Or Candlestick (Bullish Pin Bar, Morning Star, Bullish
Engulfing).

You Should Also Track Volume When There isCrossover In EMA. So

Your Chances Of Winning Increases Because Now You Have Four
Confirmation i.e. Price Action + Volume + Crossover + Candlestick.

lin

DEATH CROSSOVER

nd
tre 200 EMA

he 50 EMA

You Guys Have Must Heard About Death Crossover But Hardly Any Of
You Know How To Trade It.

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Death Crossover Is When Short-Term Trends Down And Crosses
The Long-Term EMA (50 Day Crosses / EMA 200).

But Only Selling On Simple Crossover Doesn't Increase Your

Chances Of Winning. For Increasing Your Winning Chances You
Can Use It With Price Action Or Candlestick (Bearish Pin Bar,
Evening Star, Bearish Engulfing).

e
You Should Also Track Volume When There Is Crossover In EMA.

n
So Your Chances Of Winning Increases, Because Now You Have

li
Four Confirmation i.e. Price Action + Volume + Crossover +

d
Candlestick.

en

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th

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 BREAKOUT STRATEGY

FAKEOUT / TRAP

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e
Many Of You Have Been Trapped In False Breakout And You Guys

h
Keep Wondering How To Avoid This Or Minimize Loss.

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To Avoid False Breakout You Can Consider Two Thing Retest And
Volume.

Whenever There Is A Genuine Breakout In Price, Then There Is a

Good Chance That Price Will Come To The Level Of Breakout That
Can Be Support/Resistance. Operator Do This To Check That If
There Is Anyone Left With High Quantity And If They Find It That
There Is Still Some People Remaining With Quantity Then They
Simply Retrace Back The Price To Previous Range.

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 BREAKOUT STRATEGY

30 %

20%

50%

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Operator Can Hide Everything From You But They Cannot Hide

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Volume, So Whenever There Is A Breakout With High Volume And

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Retest With Low Volume Then There Is a Good Chance That The

e
Breakout Is Genuine.

th
And To Minimize Your Loss, You Can Also Split Your Buying
Quantity In Three Parts Of 30/20/50. You Can Add 30% When There
Is Good Signal Of Breakout And 20% On Breakout, Add Remaining
50% On Successful Retest.

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 BOOK RECOMENDATION

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 BOOK RECOMENDATION

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 BOOK RECOMENDATION

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TRADING LAPTOP RECOMENDATION

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CONNECT WITH THE TRENDLINE

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CLICK ON IMAGE FOR CONNECTING WITH US

mishraashishish

thetrendlineindia123@gmail.com

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