At the first glance, You may find both patterns correct and justify both! But adding ATR to the chart may reveal the hidden truth! ATR only measures volatility and not the direction of an asset's price. Pattern 1: Broadening Formation or Megaphone What Is a Broadening Formation? A broadening formation is a price chart pattern identified by technical analysts....
For those who follow me for the past year, it is almost crystal clear that I do not believe in Random walk theory..! However, It does not mean that I believe all market moves are predictable! The stock market is a chaotic system, and follows the chaos theorem principles! Now let's look at Chaos theory and its principles..! What is Chaos Theory? Chaos is the...
What Is a Broadening Formation? A broadening formation is a price chart pattern identified by technical analysts. It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling. It usually occurs after a significant rise, or fall, in the action of security prices. It is identified on a chart by a series...
What Is a Head and Shoulders Pattern? A head and shoulders pattern is a chart formation that appears as a baseline with three peaks, where the outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. The head and...
In 2021, we should take the price reaction to 50EMA very seriously! Especially if you like to buy the dips! I believe it could be single best tool to help you find the best entry and exit point in many tickers..! Let's review few examples: 1- NASDAQ:NVDA 2- NASDAQ:MSFT 3- NASDAQ:AAPL 4- NASDAQ:GOOG 5- NASDAQ:FB 6- NYSE:CRM 7- ...
Words cannot express how much my followers mean to me. I’m eternally grateful for all the support and kindness I have received in the past few months from my followers on this platform. I came across an interesting story written by Friedrich Nietzsche, so I decided to share it here. I believe it will give you a clear pathway on how to follow others in life and...
The goal of this article is to provide information about how option and futures contracts trading could influence stocks and indexes without meaningful change in fundamentals. Do you see any relationship between S&P 500 corrections and Quadruple Witching date? I believe in the past 18 months 5 out 6 Quadruple witchings had meaningful relationship 3 of them is...
My goal is to help others see the reason behind my analysis and hopefully they learn something new or at least review what they already know I believe to be successful in the analysis regardless of the timeframe you should breaking it down to pieces and manage it piece by piece: 1- A bull trend is a period of time in financial markets when the price of an asset...
What Are Inside Days? Inside days refer to a candlestick pattern that forms after security has experienced daily price ranges within the previous day's high-low range. That is, the price of the security has traded "inside" the upper and lower bounds of the previous trading session. It may also be known as "inside bars." Inside days may indicate consolidation or...
I believe there is a rational correlation between extravagant price moves like what happened in GME, AMC, and recently SPRT spiral and quadruple witching dates! These types of price moves are strange and unexplainable phenomena for newbies..! Let me explain why this phenomenon happens: Stocks with high short interest are often very volatile and are well known...
Gama Squeeze Happens between Quadruple Witching Dates When stock prices experience rapid shifts, the conditions may be ripe for a squeeze. In this scenario, investors may find themselves buying or selling shares of stock outside their normal trading pattern in order to minimize losses. A gamma squeeze is an extreme example of this, in which investor buying...
The goal of this article is to explain the Wallstreet Bets methods. I believe all the market participants should be aware of their effects on the market and how they could derail any asset from a normal movement. Let's look at some of their manipulations first: 1- NASDAQ:MVST 2- NASDAQ:WISH 3- NYSE:SPCE 4- NYSE:NIO 5- NASDAQ:FORD 6-...
Jim Simons: There is something called the efficient market theory which says that there's nothing in the data, let's say price data, which will indicate anything about the future. Their price is always right in some sense, but that's just not true. So there are anomalies in the data, even in the price history data. For one thing, Commodities are especially used to...
Profiting from Broadening Formations Broadening formations are generally bearish for most long-term investors and trend traders since they are characterized by rising volatility without a clear move in a single direction. However, they are good news for swing traders and day traders, who attempt to profit from volatility rather than relying on directional...
What Is a Bull Trap? A bull trap denotes a reversal that forces market participants on the wrong side of price action to exit positions with unexpected losses. Bull traps occur when buyers fail to support a rally above a breakout level. Traders and investors can lower the frequency of bull traps by seeking confirmation following a breakout through technical...
Whenever trading volume exceeds total outstanding shares you are busy trading with Quant funds! These types of trades won't last long! Be careful to have your target and stop loss in the system and close your position ASAP, because it is a sporadic phenomenon and usually will not build up a tradeable trend..!
Social media provides access to quality content analyses, but you see rookie traders who make good money, losing it all in one trade! In the past few days, I predicted 4 potential stocks to be candidates for the next pump and one call option with decent gains. WISH, VLDR, QS, and OCGN, made double-digit returns, and the AAPL call option made a +100% gain. A...
Which one is more important in investing? Theme or Time??? This question may seem ridiculous to those who benefited from Thematic investing between 2014-2020. Investing in the Tech (growth) stocks in the past decade made many a fortune. Those who invested in EV makers in march 2020 and got out before February 2021, made a fortune equal to the past decade of those...