Option trading is a type of financial trading that allows traders to buy or sell the right to buy or sell underlying assets or sell shares at a set price within a specific time frame. A Call option is used when you expect the prices to increase/rise. A Put option is used when you expect the prices to decrease/fall.
A flag is a chart pattern formed during a counter-trend down after a sharp fall in price movement. A bear flag pattern forms during a downtrend. It got its name because it resembles a flag on a flagpole while the price continues to move in a downtrend, attaining lower lows and lower highs.
If you do option trading, then it is very important to know about option Greeks before doing option trading, because there are four factors of option Greeks, Delta, theta, gamma, vega. When there is a change in the index or any stock, there is a change in the calls and puts of that stock or index, which is a very important role of option Greeks.
The ascending triangle pattern is the bullish chart pattern. In this, all the swing highs will be at the same level and each low will be higher than the previous low. With each candle, the price keeps shifting higher but stays under the resistance zone.
The falling wedge is a bullish pattern. Together with the rising wedge formation, these two create a powerful pattern that signals a change in the trend direction. In general, a falling wedge pattern is considered to be a reversal pattern, although there are examples when it facilitates a continuation of the same trend.
This is a bullish pattern. The cup and handle pattern imply that the sellers have taken the price lower but buyers absorbed all the selling and took the price again to the level from where it had started falling.
Double bottom pattern, which is a bullish reversal pattern, which looks somewhat like the English letter W. The double bottom pattern is most commonly used in intraday trading and swing trading. The accuracy of the W pattern is around 70 to 75%, where once the stock or index forms the W pattern, it becomes easier to move up. Due to which bullish trend or rise is seen in the stock.
A flag is a chart pattern formed during a counter-trend move after a sharp price movement. A bull flag pattern forms during an uptrend. It got its name because it resembles a flag on a flagpole while the price continues to move in an uptrend, attaining higher highs and higher lows.
Support levels are levels where a declining stock will find the bottom and bounce up. Support levels are also formed when a stock spends a lot of time at one level and then breaks upward. Resistance is the level at which supply is strong enough to stop the stock from moving higher, due to which that stock is unable to go up, or when it reaches the resistance level, investors start selling.
Hanging Man Candle looks similar to hammer Candle. In hanging man candles, opening, closing, and high price are almost the same. Hanging Man Candle has 75-85% lower shadow and 25-15% real body. The hanging man candle is characterized by having a small real body, little or no upper shadow (wick), and a lower shadow at least twice the length of the body.
The bearish engulfing pattern is a strong bearish reversal candlestick pattern for intraday in an uptrend market near the resistance zone or supply zone. We can follow a bearish engulfing pattern like a shooting star candle.
The shooting star candle is the opposite of the hammer candle, which is a bearish reversal candle. Whenever the market is in a state of going up and keeps going up, goes above any supply zone or resistance zone forms a shooting star candle, and starts coming down from the top, then we call it a shooting star candle.