3. ECL Learnings
1. Basics Introduction & History of market functioning
2. Candle understanding & different Patterns
3. Basics and advance technical tools for stock movement understanding
4. How to create intra-day, long duration strategies using different indicators
5. Basics of F&O market
6. Analysis of F&O data
7. Selection of option chain for trading
8. Risk mitigation strategy for for intraday or short duration traders
9. How to hedge loss making trades.
10. Analysis of nifty and bank-nifty weekly data.
11. When to trade what to trade and when to stay out of market
12. Psychology stability of mind for entering market.
13. Difference between commodity market and equity market
14. How to take trades in commodity market
15. Building own strategies on real time tools.
16. How to select stocks in pre-market & post market
17. Live market trade analysis and profit bookings (Risk Reward analysis)
18. Buddy program for 1 month to make you comfortable in taking own decisions.
19. Creating community culture for peer learning.
n Session
Additional Topics
1. Global Indices and their co-relation with Indian Stock Market
2. Analysis of Futures Data
3. F&O Strategies
Day1
4. History of Equity Market
❖ Trading was started by Japanese commodity sellers
❖ First Listed market was started in Amsterdam and
Dutch East india company was first listed , listed in
1611
❖ Trading strategies started by “Ichimoku Sanjin” in
Japan - 1930, Strategy Published in 1960
❖ Bombay stock exchange was recognized in 1857,
Phiroze Jeejeebhoy Towers at Dalal Street,Bombay -
Founder Premchand Roychand
❖ CMC ltd developed electronic trading platform in 1995
and the they switched entire business in 50 working
days
Day2
5. Functioning of Market
Most Commonly used Terminologies in market
❖ Share market: Anywhere you can buy or sell shares
❖ Stock exchange: This is a specific facility where stocks are listed for sale/purchase
❖ Stock: Stock is a general term used to refer to a certificate indicating ownership in a company.
❖ Share: A share is a stock certificate of a particular company.
❖ Bull market: When stock prices in a market are generally rising, it is called a bull market.
❖ Bear market: The exact opposite of a bull market is a bear market – when the stock prices in the market are generally falling it
is called a bear market.
❖ Order: It is a show of intent to buy or sell shares in a given price range
❖ Bid: Your bid is the amount that you are willing to pay for a share
❖ Ask: Ask is the price at which you are willing to sell a share.
❖ Market order: An order to sell/buy shares at the market price is called a market order.
❖ Day order: An order that is good only till the end of the trading day is called a "day order"
❖ Good-till-cancelled order
❖ Liquidity: Liquidity refers to how easily a stock can be sold off
❖ Trading volume: The number of shares being traded on a given day is called trading volumes
Day2
23. Chart trading patterns
Major Patterns used in Markets
3. Pennant Pattern
❖ A Pennant pattern is a continuation chart pattern, seen when a security
experiences a large upward or downward movement, followed by a brief
consolidation, before continuing to move in the same direction
❖ A Pennant pattern has to be preceded by a strong up or down move that
resembles a flagpole. If there isn’t a flagpole, then it's a triangle and not a
Pennant.
❖ A Pennant tends to form a shallow retracement (typically less than 38% of
the flagpole). A deep retracement is indicative of a triangle rather than a
Pennant.
❖ A Pennant is characterized by the continuation of the upward or downward
trend.
33. Technical Indicators ??
1. Trend indicators (lagging) analyze whether a market is moving up, down, or
sideways over time.
2. Mean reversion indicators (lagging) measure how far a price swing will stretch
before a counter impulse triggers a retracement.
3. Relative strength indicators (leading) measure oscillations in buying and
selling pressure.
4. Momentum indicators (leading) evaluate the speed of price change over time.
5. Volume indicators (leading or lagging) tally up trades and quantify whether
bulls or bear are in control.
34. Important Technical Indicators
1. Moving Averages : Gives the historical avgs of the
price movements
Duration Where to use ? When to trade ? Market
5,9,15 For Intraday trading When 9 days
crosses 15
Commodity + Equity
26,52 For 2-3 days trading When 15 days
crosses 26
Equity
100,200,364 For Medium term
investments
Equity
35. Important Technical Indicators
2. Exponential Moving Averages : Gives the historical avgs
of the price movements with weightage of previously
closed prices.
How it works :
❖ Calculate the SMA (Period Values / Number of Periods)
❖ Multiplier = (2 / (Time periods + 1) )
❖ EMA = {Close - EMA(previous day)} x multiplier + EMA(previous day).
Imp: It is generally used for swing trading. 20 days crossing 50 days EMA is best
for trading
36. Important Technical Indicators
3. Bollinger Band :
Bollinger Bands are a type of price envelope (Price envelopes define upper and lower price range levels.)
Bollinger Bands are envelopes plotted at a standard deviation level above and below a simple moving
average of the price. Because the distance of the bands is based on standard deviation, they adjust to
volatility swings in the underlying price.
Bollinger Bands use 2 parameters, Period and Standard Deviations, StdDev. The default values are 20 for
period, and 2 for standard deviations, although you may customize the combinations.
Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs,
both upper and lower bands and in conjunction with a moving average. Further, the pair of bands is not
intended to be used on its own. Use the pair to confirm signals given with other indicators.
37. Important Technical Indicators
3. Bollinger Band :
Bollinger Bands are a type of price envelope (Price envelopes define upper and lower price range levels.)
Bollinger Bands are envelopes plotted at a standard deviation level above and below a simple moving
average of the price. Because the distance of the bands is based on standard deviation, they adjust to
volatility swings in the underlying price.
Bollinger Bands use 2 parameters, Period and Standard Deviations, StdDev. The default values are 20 for
period, and 2 for standard deviations, although you may customize the combinations.
Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs,
both upper and lower bands and in conjunction with a moving average. Further, the pair of bands is not
intended to be used on its own. Use the pair to confirm signals given with other indicators.
40. Important Technical Indicators
4. MACD: Moving Average Convergence/Divergence
An approximated MACD can be calculated by subtracting the value of a 26 period
Exponential Moving Average (EMA) from a 12 period EMA. The shorter EMA is constantly
converging toward, and diverging away from, the longer EMA. This causes MACD to
oscillate around the zero level. A signal line is created with a 9 period EMA of the MACD
line.
The standard setting for MACD is the difference between the 12- and 26-period EMAs. Chartists
looking for more sensitivity may try a shorter short-term moving average and a longer long-term
moving average. MACD(5,35,5) is more sensitive than MACD(12,26,9) and might be better suited
for weekly charts.
Signal Line : 9-day EMA of the MACD series.
43. Important Technical Indicators
5. RSI: Relative strength Indicator
● The relative strength index (RSI) is a momentum indicator
● Measures the magnitude of recent price changes to evaluate overbought or
oversold conditions
● The RSI is displayed as an oscillator (a line graph that moves between two
extremes) and can have a reading from 0 to 100.
● An asset is usually considered overbought when the RSI is above 70% and
oversold when it is below 30%.
● Calculation
=100−[ 100
(1+ (Previous Avg gain *13)+current Gain)
- ((Previous Avg gain*13)+current Loss)
46. Important Technical Indicators
6. Cross overs
● A crossover refers to an instance where an indicator and a price, or multiple
indicators, overlap and cross one another.
● Crossovers are used in technical analysis to confirm patterns and trends such as
reversals and breakouts, generating buy or sell signals accordingly.
● Moving average crossovers are common, including the death cross and golden
cross.
● Crossovers indicating a moving average are generally the cause of breakouts and
breakdowns.
● Moving averages can determine a change in the price trend based on the
crossover
47. Important Technical Indicators
6. Cross overs : Golden Crossover
● Occurs when a short-term moving average crosses over a major long-term
moving average to the upside
● Signaling a definitive upward turn in a market.
● There are three stages to a golden cross:
❖ A downtrend that eventually ends as selling is depleted
❖ A second stage where the shorter moving average crosses up through the longer
moving average
❖ Finally, the continuing uptrend, hopefully leading to higher prices
49. Important Technical Indicators
6. Cross overs : Death Crossover
❖ Conversely, a similar downside moving average crossover constitutes the death cross and is
understood to signal a decisive downturn in a market.
❖ The death cross occurs when the short term average trends down and crosses the long-term
average, basically going in the opposite direction of the golden cross.
50. Important Technical Indicators
7. Divergence
❖ Divergence is when the price of an asset is moving in the opposite direction of
a technical indicator such as an oscillator, or is moving contrary to other data.
❖ Divergence warns that the current price trend may be weakening, and in
some cases may lead to the price changing direction.
❖ There is positive and negative divergence.
❖ Positive divergence indicates a move higher in the price of the asset is
possible.
❖ Negative divergence signals that a move lower in the asset is possible.
52. Important Technical Indicators
8. Ichimoku Cloud : One stop Solution
● Versatile indicator that defines support and resistance, identifies trend direction, gauges momentum
and provides trading signals
● Four of the five plots within the Ichimoku Cloud are based on the average of the high and low over a
given period of time
● Tenkan-sen (Conversion Line): (9-period high + 9-period low)/2))
● Kijun-sen (Base Line): (26-period high + 26-period low)/2))
● Senkou Span A (Leading Span A): (Conversion Line + Base Line)/2))
● This is the midpoint between the Conversion Line and the Base Line. The Leading Span A
forms one of the two cloud boundaries. It is referred to as "Leading" because it is plotted
26 periods in the future and forms the faster cloud boundary.
53. Important Technical Indicators
8. Ichimoku Cloud : One stop Solution
● Senkou Span B (Leading Span B): (52-period high + 52-period low)/2))
● On the daily chart, this line is the midpoint of the 52-day high-low range, which is a little
less than 3 months. The default calculation setting is 52 periods, but can be adjusted. This
value is plotted 26 periods in the future and forms the slower cloud boundary.
● Chikou Span (Lagging Span): Close plotted 26 days in the past
The Conversion Line (blue) is the fastest and most sensitive line. Notice that it follows price action the closest.
The Base Line (red) trails the faster Conversion Line, but follows price action pretty well. The relationship
between the Conversion Line and Base Line is similar to the relationship between a 9-day moving average and
26-day moving average. The 9-day is faster and more closely follows the price plot
55. Important Technical Indicators
8. Ichimoku Cloud : One stop Solution
❖ The trend is up when prices are above the cloud, down when prices are below the cloud
and flat when prices are in the cloud.
❖ the uptrend is strengthened when the Leading Span A (green cloud line) is rising and above the Leading
Span B (red cloud line). This situation produces a green cloud
❖ Conversely, a downtrend is reinforced when the Leading Span A (green cloud line) is falling and below
the Leading Span B (red cloud line).This situation produces a red cloud
❖ The cloud is shifted forward 26 days, it also provides a glimpse of future support or resistance.
❖ Negative divergence signals that a move lower in the asset is possible.
63. Important Technical Indicators
8. Ichimoku Cloud : Summary
Bullish Signals:
● Price moves above cloud (trend)
● Cloud turns from red to green (ebb-flow within trend)
● Price Moves above the Base Line (momentum)
● Conversion Line moves above Base Line (momentum)
Bearish Signals:
● Price moves below cloud (trend)
● Cloud turns from green to red (ebb-flow within trend)
● Price Moves below Base Line (momentum)
● Conversion Line moves below Base Line (momentum)