Find out the answer for the question we asked today morning.
Here is the

#Darvas #Box is a simple and interesting strategy used by the trader. It is a momentum strategy with no technical indicators.

This learning thread would be on "Darvas Box Strategy"

Like and Retweet for wider reach and for more learning thread in the future.

@AmitabhJha3

1/11

Darvas Box is named after Nicolas Darvas, who was a dancer and self-taught investor.

He discovered "Box Theory" after gaining experience from the market and he believed that the shares which move up and down the chart move in a specific box pattern.

2/11

There are some condition to use Darvas Box and we will discuss only buy strategy:

1. Stock should be trading near all time high levels
2. Fundamentals of the company should be good
3. Volumes play a crucial role

Prefer to use it daily time frame and above.

3/11

When the price is near all time high levels, if price consolidates then there is a range or box formed having a upside ceiling and downside floor. Price consolidates in this range before breakout.

Volumes during breakout is very important and it should be high.

4/11

Let's see some example now.

Dmart was trading in a range of 1955-2438 for six months.
After breaking this range upside, DMart price rallied from 2500 to 3200+ (Rally of 28% in 3 months).

During breakout volumes should rise and it should spike up.

5/11

Trading on chart patterns is difficult, Until you read this ! ⚡️

Everything about Head and Shoulder Pattern

Free Technical Analysis course (4/10) 🧵

A head and shoulders (H&S) pattern is a chart pattern of three peaks, where the outer two are close in height, and the middle is the highest.

It is one of several top patterns that signal an upward trend is nearing its end.

How do we trade the H&S pattern?

We find out stock that has the pattern but has not given a breakdown below the support or neckline which means it is in the formation of the right shoulder.

Generally, we track the stock just before the breakout so that we don't miss a big move.

What does this mean?

Basically, we look out for the charts where the price is forming the right shoulder or consolidating just above the neckline.

As seen in the chart where the price was in consolidation just above the resistance before the breakdown and big downmove.

Now the most important question is how we trade this pattern?

1. First identify stocks that are forming the H&S pattern and are about to give a breakdown.
2. Stoploss would be the nearest swing high or right shoulder high.

Option trading is tough but here’s what can make it easier for you

8 option strategies that you can use in any market (sold as a ₹ 50,000 course !)

1/ Bullish: Put Spread (Vertical Spread)

This means shorting a near OTM Put Options and buying far OTM Put Options to hedge.

Let's consider, I am bullish on Nifty (Spot: 17900).

So I will short 17800 PE and buy 17600 PE as hedge.

Payoff and other details is attached below.

2/ Bullish: Put Spread (Cross Calendar Spread)

It means shorting a near ATM put of current expiry and buying OTM put option of next expiry to reduce margin.

Let's consider, I am bullish on Nifty (Spot: 17900).

So I will short 17800 PE (22/09) and buy 17600 PE (29/09).

If you are unsure of the view then cross calendar spread can be used as profit is good in between the range.

Decay in the far OTM option for next expiry will be less than current expiry options so that will be again a benefit.

3/ Bearish: Call Spread (Vertical Spread)

This means shorting a near OTM Call Options and buying far OTM Call Options to hedge.

Let's consider, I am Bearish on Nifty (Spot: 17900).

So I will short 18000 CE and buy 18200 CE as hedge.

Payoff and other details is attached below.

Here is what YOU should know about BREAKOUTS before you lose money on them !

A free FAILED BREAKOUT analysis for you - 🧵

A technical analysis term, used to show a rise in a stock’s price above its resistance level (such as its previous high price) or drop below its support level (commonly the last lowest price.)

The assumption is that the stock will continue to move in the same direction following the breakout, which generates a buy or sell signal.

Trading breakouts is an excellent trading strategy that involves buying or selling an asset after a long period of consolidation.

However, the biggest risk of trading a breakout is when the price suddenly reverses, in what is known as a false breakout. In this report, we will look at what a false breakout is, how you can identify it, and how you can use it in the market.

Let's look at plenty of False Breakout Examples ⚡️
1. #INFIBEAM ⚡️
We saw a top out pattern, interesting part is the candle that gave a top was a heavy buying candle. No follow-up and stock is down nearly 30%.

Print this and paste it on your #trading desk ⚡️

Your mini TA book.

On average, the market performs the poorest in September.

I always analyse 20 stocks but trade only 2/3 of them in a month.

I prefer to trade stocks which hits 52 week high/ATH.

Trade strongest stocks of the market.

Filter stocks which hits 52 week high/ATH after 1-2 months of consolidation.

Name a listed company that has created wealth but its story is not well known or not well documented.

Just curious.