For a trader it is important to know how a particular trade set up will work before he acts on it. Thus before sharing any posts we have laid down the following rules which are expected to observe while looking into any of our posts related to stock ideas or technical charts.
- Everyday Nifty Spot Levels are published here – Nifty Spark.
- Everyday Favourable trades with levels are published here – Stock Zest.
- Here we post trading ideas that are based on Harmonic Trading Patterns with very few exceptions.
- Against the popular view Harmonic patterns generally indicate the end a trend or potential reversal zone where price is likely to go against the current trend.
- Harmonic Patterns indicate three unique thing –
- Point of reversal zone or PRZ –It is usually a price range within in which a particular trending pattern ends. Generally price reversal in this zone is observed.
- Stop loss or SL – Like any other trading setup the harmonic trading pattern also provides for stop loss. Traders are required to observe the same.
- Target – Harmonic pattern provides a target price as well. It is suggested to trail the stop loss as and when the price moves in the direction of the trade, than waiting for the given target.
- A trading pattern becomes valid only when there is price rejection in the given PRZ or near PRZ within 5 min of time frame. In case there is no price rejection, the said pattern will become invalid.
- All prices mentioned herein are spot price or cash prices of stocks or index unless mentioned otherwise.
- Example of price rejection is given below –