A red or a green candlestick is formed with a small body. The size of shadows can vary. It is interpreted as a neutral pattern but gains more importance when it is part of other formations. when it comes in the bull market rally spinning top indicates the bulls are neutral bears take place of bulls and indicates the bears try to back in the market.the colour does not matter but red spinning top singal more bearish and green spinning top indicates more bullish.
See Example In Chart
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What is the difference between the spinning top and the high wave? In the spinning top, the shadows are relatively small and the candle has a very small range. When combined with low volume, traders may be expressing disinterest. colour does not matter
FLAG AND PENNANT PATTERN The flag and pennant patterns are commonly found patterns in the price charts of financially traded assets stocks, bonds, futures, etc. The patterns are characterized by a clear direction of the price trend, followed by a consolidation and range bound movement, which is then followed by a resumption of the trend.The continuation patterns which we have taken up so far in this Study the various types of Triangles and the Rectangle have one FLAG PATTERN The flag pattern is encompassed by two parallel lines. These lines can be either flat or pointed in the opposite direction of the primary market trend. The pole is then formed by a line which represents the primary trend in the market. The pattern is seen as the market potentially just taking a “breather” after a big move before continuing its primary trend. The chart below illustrates.Thus, the first requirement of the Flag formation is a nearly vertical price movement on th
OPTION STRATEGIES Options allow the investor to sculpt the returns in their portfolio. When you buy a stock and the price rises $1, you make $1. You lose $1 if the price declines $1. Your profits are linear and directly related to only the change in the price of the stock. Interest and dividends will make a slight change to the outcome though these factors are also linear. Options blow apart this linearity. Options are called convex instruments because the returns are not linear but curved. We saw that in the previous chapters. You can literally create millions of possible returns through the use of options. You can mix and match options to create just about any return possible. Selecting a strategy is a multi step process. You should go through a systematic process before initiating a trade. Each step should lead to further refinement of the strategy. It can be very dangerous to your bank account to disregard some or all of the major factors that affect options prices.
TYPES OF BUY SELL IN OPTION Having reviewed the basics of option characteristics, we are now aware that we have a number of investment choices: stock, calls on the stock, and puts on the stock. For each of these, we can initiate a position either by purchase (referred to as a long position) or by sale (referred to as a short position), thus giving us six different initiating strategies : * Long stock * Short stock * Long call * Short call * Long put * Short put These tools are what we can use to construct all option-based strategies. By combining these building blocks, the individual investor can create strategies ranging from basic to complex. Mastery of each of the individual building blocks is essential for understanding how they work in combination. Therefore, we will now look at each of these six alternatives in some detail. Retail investors are already familiar with one of these building blocks: long stock. With an understanding of the oth
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