Hi
I am newly learning to trade, every field needs support from mentor/experts to support.
seeking for support/mentor
Go to Zerodha varsity
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hello trader,
Hello,
The best guideline for trading is the real deal itself - placing your first trade. Everyday is a different day in the market. When you trade for long enough, you will start getting accustomed to trading price patterns and these patterns will be your toolkit. Knowing how a pattern would react on a particular day and at a particular price would be your price action.
Market days are either range-bound days or trending days. On trending days, you can either have an uptrend or a downtrend. You will find price patterns on both these kind of days.
Usually an uptrend to newer levels is formed by a breakout where there is a majority of buying that takes place on the trading day. Every dip will see new buyers come in and the stock will close around the high point of the day. An uptrend then usually continues in the following days where stocks open at slightly lower levels or even gap down and then close around the days high. A good indication of an uptrend reversal is when stocks start opening gap up and start closing at levels around the days low.
One can follow the same logic for a downtrend in the exact opposite way.
A downtrend to newer levels is formed by a breakout where there is a majority of slling that takes place on the trading day. Every rise will see new sellers come in and the stock will close around the high point of the day. A downtrend then usually continues in the following days where stocks open at slightly higher levels or even gap up and then close around the days low. A good indication of an downtrend reversal is when stocks start opening gap down and start closing at levels around the days high.
Range bound markets operate between a resistance and support level. Finding these levels is a dynamic process and it will be a day specific challenge. On a range-bound day, the resistance level is where you sell and the support level is where you buy.
One can notice from charts that stocks begin an upmove from the lowest point and stocks start a downmove from the highest point. This is also a general guideline. Also, the markets are usually overbought and oversold.
You can have a checklist everytime you buy or sell a share. You will figure out your own checklist as you pick up on trading. A Buy trade checklist could go something like this when you are taking the trade - 1. What would be your stoploss? 2. What would be your target? 3. What type of a trading day is it? 4. How has the stock reacted at this entry price already today? 5. Is the risk to reward worth it?
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