Which type of stock is best for swim trading, This stock form a bullish pattern

Published on: December 14, 2024

About this image :-

In this image you can see that a long time consolidation take place and than price going toward in lower side for trap buy and than suddenly price break out the moving average.

So, In this post we learn about this type of pattern as well as how to trade using this pattern and what is the trap for this pattern so if you want to learn whole thing than you can read our post.

Welcome to this post now keep learning and careful learning.

What is consolidation in trading ?

When any stock or price move in particular range than this range is called consolidation in trading. This consolidation is very important .

Because using consolidation and range you can find pattern and in short this is also a type of pattern in trading field so don’t try to avoid this.

On the basis of consolidation you can also plan your trade and you can make more profit as compare to other pattern because this pattern is use mainly for trading big portfolio.

So finally start learn this pattern as well as start back testing using this pattern and check result and I sure, this pattern give always good return in any stocks.

How to form consolidation :-

Its formation is very easy like that when any stock making range or forming range than this range is known as consolidation.

This way form consolidation and if you want to trade using this pattern than you need to focus when start consolidation than you can make money.

During formation you need to focus on consolidation because this is a golden time to make money using consolidation.

How to find consolidation in live chart :-

If you want to find consolidation in live chart than you need to follow these steps :-

The first step is open your top 500 stocks in from your index.
The second step is start scanning range and consolidation.
The third step is when any chart form any type of consolidation than mark that chart.
The fourth step is also see marked chart and wait for any big movement.
The fifth step is when any movement is take place than this is is good.

If you follow these five steps than you can easily find consolidation in live market or live chart. This is the original method to finding any pattern.

When any stock give big movement than this is chart is good for you because if any stock give more than 5 to 10 % movement is one day.

Than may be after some time this stock give more return because without any big movement you can not judge this is good for big movement or not.

You you select only those stock which give big movement in shorter time frame because if any stock give big movement in shorter time frame than also give big movement at longer time frame.

What is the benefit of consolidation :-

The main benefit of consolidation is time because in any pattern not give more time for entry and exist but this pattern give sufficient time for entry as well as exist.

This pattern also give structure of chart when you are watching chart that time you feel the benefit of consolidation and its structure.

If you have more capital and you want to low risk as well as low reward but very low risk so that time you try to learn and use consolidation pattern.

And also you have low capital and you are beginner in trading that time you don’t want loss your capital so you can try consolidation pattern or method.

This is also a benefit of consolidation or range trading so finally, it is very useful and benefitable method of trading in stock market.

What is our plan for trading :-

During trading your main plan is chart structure and price action and you have to find where is available maximum stop loss of beginner trader.

When you are able to find where is stop loss of beginner trader than you can easily make money in trading field also you can will all mind of beginner trading.

Because in trading market try to hunt stop loss of beginner trader so if you are knowing where is more stop loss is available than according to situation you can plan you trader.

If you want to make money in trading than your main plan is big low and sell high this is your main mind set and your main plan.

I see in this time the maximum trader is selecting only those stock which is top gainers in the list and also trade at all time high so this is very wrong method of selecting stocks.

Some time this method work but in maximum time trader will loss his capital so try to buy always at pull back or you can use moving average indicator.

If you want to earn money than you have to select those stock which is near to pull back or near to moving average indicator this is for beginner.

This is the chart of same stock :-

Stock chart image with entry, stop loss and target

About this image :-

This is the same same stock of chart but here we draw some horizontal line and some point which is target point, entry point and stop loss point.

According to this image you can learn how to find plan our trader and what is our entry point when you can exist and which indicator is need to beginner traders.

Which indicator is need for this pattern :-

The most important indicator which is need of beginner traders is following :-

The first indicator is Moving Average.
The second indicator is EMA.
The third indicator is Volume.
The fourth indicator is ADX.
The fifth indicator is VWAM.

These are some indicators which is need of beginner but again we are saying indicator work is indicate only so only on the basis of indicator don’t try to take position.

But if you are a beginner in trading field so may be you have no experience that time you need following indicator for identify chart so you can use.

But here, a very important point for any trader if you don’t know how to use indicator so first learn it than use other wise may be you need to book losses. So be careful.

When we can buy according to this pattern :-

If you want to buy any stock than wait for perfect time like that in simple language wait for pull back without pull back or chart pattern don’t try to buy or sell.

If you are a beginner in trading than may be you have to faces lots of difficulties than you can use moving average but before using of moving average learn it than use.

Here, your main mind set is buy low and sell high this is your main mind set so don’t forget this mind set and follow always this mind set for profit.

If any stock is moving top side so on the basis of emotion don’t try to buy or sell because in maximum time trader take decision on the basis of emotion so don’t try to do this.

Finally, you have to wait for pull back or wait for price cross moving average with bullish candle and than see volume of red candle than according to price action take decision.

Here, A very noticeable point of every one when your Index is going towards falling side than also your selected stock fall so also don’t judge your pattern when your main index is falling.

What is our entry point :-

In this we are not saying in number what is our entry point but we are saying according to chart pattern what is our entry point.

So, first to first your main mind set is buy low and sell than don’t forget this line if you follow this line you never try to buy high and sell low other wise you have no more option except loss.

So, when price is below moving average than you need to wait for crossing and when cross the price your moving average than see your candle strength as well as pattern.

If you candle strength is very good than you need to see volume and you have to compare your volume with red volume if you are a buyer.

If green candle volume is high as compare to red candle volume than this is good and if you don’t know how to compare and use volume indicator than first to first learn it than try to use and compare.

If all the steps are good than you have to measure your stop loss may be some trader skip this point but you don’t try to skip this point.

This way you can easily find what is your entry point and this is the original method to find your entry point as well as very good back test result you can check it.

What is our stop loss point :-

In this post also we are not saying number form what is our stop loss point but according to chart we are saying what is our stop loss point.

In swim trading as well as long time trading maximum trader try to avoid this point but you don’t try to avoid this point.

Because what is the of this point you can protect your capital and you can easily safe your money if you don’t want to waste your money than don’t try to avoid this point.

So, now if you need stop loss than you can take logical point as well as you can set in your mind if price reached that point than I will exist.

May be this point is logical but this process is protecting your capital as well as your money so don’t try to avoid this.

What is our target point :-

There are lots of method to find your target point some methods are following :-

The first method is you can take target according to logical point.
The second method is you can book target using technical methods.
The third method is according to nearest support or resistance.
The fourth method is you can book your target using percentage like that you can set in your mind when this stock hit 10% out of our capital than I will book profit.

This way you can easily find your target point. Here, we said four methods you can use any one method and you can easily book your target.

Learning of this post :-

There are lots of learning of this post like that :-

The first learning of this post is What is consolidation in trading.
The second learning of this post is How to form consolidation.
The third learning of this post is What is the benefit of consolidation.
The fourth learning of this post is How to form consolidation in live chart.
The fifth learning of this post is What is our plan for trading.

These are first five for learning of this post. If you want to learn than you can use these titles for learning and according to these you can learn easily.