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2.technical Analysis Part 2

This document provides an overview of market structure and technical analysis. It discusses key principles like price moving within support and resistance ranges and breakouts leading to new price levels. The elements discussed are market phases, including uptrend and downtrend, and market trends, specifically determining the primary long term trend, secondary corrections, and short term trends. Professional traders are said to place orders in a way that other traders need to understand where they are positioning themselves to avoid getting trapped.

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trisha chandroo
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381 views

2.technical Analysis Part 2

This document provides an overview of market structure and technical analysis. It discusses key principles like price moving within support and resistance ranges and breakouts leading to new price levels. The elements discussed are market phases, including uptrend and downtrend, and market trends, specifically determining the primary long term trend, secondary corrections, and short term trends. Professional traders are said to place orders in a way that other traders need to understand where they are positioning themselves to avoid getting trapped.

Uploaded by

trisha chandroo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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B4Trading Tamil

Technical Analysis of Stocks – Part 2

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Table of contents

01 02 03

Principles Of Elements Of
Market
Market Market
Structure
Structure Structure

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01

Market Structure :
Technical Analysis of Stocks – Part 2

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What is Market Structure :

● The market structure gives us


trading opportunities. In the bull
market, we always look to buy on
dips.

● In the range market, we look to


buy low and sell high.

4 Product vision | Pitch deck 20


02
Principles Of Market
Structure :
Technical Analysis of Stocks – Part 2

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Principles Of Market Structure :

• Price moves within a structural range of support and


resistance.

• A breakout of the structural support or resistance will lead


to price movement in the next area of support or
resistance.

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03
Elements Of Market
Structure :
Technical Analysis of Stocks – Part 2

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Elements Of Market Structure :

1.Market Phases

2.Market Trends

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How Does The Market Really Work?

“All Financial Markets Work On The Universal Law Of Supply And Demand”

• The Law of Demand : The higher the price of an item, the lower the demand
(buyers don’t want to buy at a higher price) and the lower the price, the
higher the demand (buyers want to buy at a low price).

• The Law of Supply : The higher the price of an item, the higher the supply
(sellers want to sell at a higher price) and the lower the price, the lower the
supply (sellers don’t want to supply at a lower price).

• So prices go up to find sellers and then go down to find buyers.

• Let’s think from the perspective of professional traders.

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Who Is A Professional Trader :

Professional traders are big hedge funds and institutions,


like FII and DII.

If you want to be a successful trader, you have to understand


where these professional traders place themselves and where
their orders are.

If you don’t know this, you might get trapped by


professional traders.

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The Price Goes Through 4 Phases :

UPTREND DOWNTREND
Phase 2 Phase 4

Phase 1 Phase 3
ACCUMULATION DISTRIBUTION

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Market Trends :
Let us first understand what is the trend. In a
healthy bull trend, the upswing generally
exceeds the downswing in length and makes
a higher high and higher low. The reverse is
true for the bear market.

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Why is trend analysis so important in trading ?

• Trading against the trend, without a trend, or poor quality


trends is one of the most common reasons traders fail.

• The quality or strong trends have more predictable


success (the edge).

• Poor or weak trends have lower predictability.

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Determining the market Trend :

According to Dow Theory, the market has three trends.

Primary trend : In Dow Theory, the primary trend is also considered a


major trend in the market. It has a long-term impact.

Secondary trend : Dow calls a correction in the primary trend a


"secondary trend." In a bullish market, the secondary trend will be a
downward movement, and in a bearish market, it will be a rally.

Short-term trend : The minor trend is a corrective move within the


secondary trend.

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Thanks!
Do you have any questions ?

[email protected]

B4TradingTamil.com

Keep Supporting us

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