Learn To Trade with Me

# Pillars for Successful intraday trading

1. Technical Trading System

2. Money Management
3. Trading Psychology
4. Execution

# Technical Trading System

 A Technical Trading System is a set of rules and strategies used by traders to make decisions
about buying or selling financial assets such as stock or currencies, based on analysis of
historical price and volume data. It relies on patterns, indicators, and statistical tools to predict
future price movements. LEARN TOF
 Trading is all about knowing Market Trend with the help of Price-Volume Analysis (I.e.,
Uptrend, Consolidation & Downtrend).

 Always predict trend according to your time zone (i.e 5 min, 15min,30min, 1 hr., 1 week etc.)

Trading Timeframe Time period of trade

Style

Scalping Short-term Seconds or minutes

Day
Short-term 1 day max - do not hold positions overnight
trading

Swing
Short/medium-term Several days, sometimes weeks
trading

Position
Long-term Weeks, months, years
trading
 DOW- THEORY =The theory is predicated on the notion that the market discounts everything in a
way consistent with the efficient markets’ hypothesis (I.e., all the news, views are already
discounted in the market through candle or chart).

# How to analysis and prepare chart for day trading before chart for
day trading before market open?
 How to prepare for day trading before the market opens. These are the factors we should
study.

1. Context
2. Previous day activity
3. Next support and resistance
4. Area of Opportunity
5. Possible entry price action
6. Index (if you trade in index stock)
1. Context
Where price is with respect to the major trend
 Up/down/range(trend)
 Pullback /impulse swing

2. Previous day activity

Price what did last day?

Studying the previous day’s profiles to get clues for today is one of the essential steps a trader has
to perform daily. When a trader starts tracking this regularly when it becomes a habit, he will
always be in sync with the Short Term moves in the markets. We will study the following
parameters to understand the previous day.
 Attempted Direction (Up, Down, Sideways)
 Volume Generated (High, Low, Unchanged)
 Position of Close (STRONG/WEEK/neutral)
 Last swing high/last swing low
By studying the above factors, we can get a tight grip on what smart money was trying to
achieve the previous day and was that attempt successful. And Possible the trend for the next
day

LAST HIGH AND LOW

If the previous day has had a trending day in which the price was marked up to a new level,
the previous day’s high or low will not be as important. For example, in the case of a trend day
UP, the previous day’s low is not likely to test. Instead, the last swing low becomes the
important support level. This support level is most important in the morning session of trading.
After a trend day up, expect that last swing low to provide initial support.
Position of close
 If the market strong closes (either near to the previous day’s high or near to the previous day’s
low), it is giving the trader a very loud and clear signal that continuation is likely the next day.
 The last hour often tells the truth about how strong a trend truly is. Smart money or strong
hand shows their hand in the last hour, continuing to mark positions in their favor.
 Neutral CLOSE MEANS. Price close middle of the day. The previous day was a range day. If
neutral closing on the previous day, we expect the price will reverse from either previous day’s
low or previous day’s high in the next day. If the trend up, then we expect the price Will
reverse from the previous day’s low

Volume and attempted direction

 High volume during the closing hours indicates continuation the next morning in the direction
of the last half-hour.
 If the market makes a trending move in the last hour after a lifeless opening session, be
positioned in the direction of that move by the close. There are very high odds of an opening
gap in your favor the next morning.
3. Next support and resistance level
1. Where are immediate support and resistance or supply and demand zone?
2. This is decided our risk reward.

4. DEFINING AREA OF OPPORTUNITY

Trading is all about Location. Defining a location where a decisive group of traders acts and
fight it out is the key. Wait for the market to hit the identified price level, and watch which
side takes control, buyers or sellers. Go with the winning team and enter where the losers start
exiting and allow their order flow to take our position to profit. The location for the area of
opportunity is
 Previous day High, previous day Low
 Last swing high and last swing low
 Major Swing Pivots.
 Big Round Numbers
The previous day’s high and low are two very important “pivot” points, because of where
buyers or sellers came in the day before. Look for price action at these points for either
continuation or reversal. These are the market’s own levels, and the market is going to respect
its own levels.
5. INDEX AND SECTOR
First Identify the support (demand) and resistance (supply) levels in the NF and any sector. If
markets closed near demand, I would know to look for opportunities to buy the next day as
the price was likely to rally from that demand level.
The next step was to look at charts of a few of the large sectors to find some that are also
trading near demand as those sectors would likely rally from that demand level with the broad
(NF and BNF) market the following day. Out of the few sectors, I would always find one or two
that were set up very well with the broad market.
The final step was to look at a handful of high-volume stocks within that sector and that is
always where I would find a VERY quality trading opportunity.
6. ENTRY PRICE ACTION
There are three price action trade setups when price encounters an area of opportunity.
 Breakout failure
 Breakout pullback
 Test Reversal
Trading these three price action patterns blindly is a recipe for disaster. There are other
factors to be considered while trading these price action setups like Strength of Trend, volume,
price action, etc.

QUICK TAKEAWAY

1. At first, we should identify the trend of stock/ Index (Up/Down/ Range/ Pattern)
in daily time frame.
2. In intraday trading we should consider a 3-time frame daily for trend, 1 hour for
conformation and 5 min for entry/exist.
3. Next analysis the previous day direction of price (Up/down/Range) and analysis
price supported by Volume or not by check volume is High/Low/Unchanged
Through marking on chart with 20 sma in volume in daily chart.
4. After this analysis the structure of stock (look 1hrs chart to mark last swing low
which work as support and last swing high which work as resistance in bullish
stock and vice versa in bearish stock whereas in range market PDH & PDL work as
support and resistance). To identify the market structure use ADX indicator where
adx is below 20 range market and when adx is above 20 trend market whether up
or down.
5. Previous day closing (PDC) also plays important role in intraday trading if price
close on or near to PDH it says stock in strong up trend or weak down trend, if
price close on or near to PDL it says stock in weak up trend or strong down trend if
price close at middle, then no direction.
6. Also check First 1 hrs. & last 1 hrs. chart as Smart money or strong hand shows
their hand in the last hour, continuing to mark positions in their favor (to analysis
1 hrs. chart use 5 min chart for conformation).
 7. Also use VWAP indicator whether price is above VWAP or not and vice versa & use
VWAP in lower time frame for better result E.g., 15 Min or less.
8. Also, round number works as support and resistance for stock (e.g.,
100,1000,1500) and Analysis the sector or index.
9. At last, while trading with 5 min chart watch breakout failure, breakout pullback
& reversal.

BEST TIME FRAME FOR INTRADAY TRADING

1 Intraday price behavior is divided into 3 sessions.

a. Morning behavior (9:15 -11:00)

 If the market is in a downward move the price will fall at the start of the
market and after, then the price will correct and move downward mostly.
 If morning is sideways market then lunch time trending mostly down and
afternoon sideways or reversal or trend continues

b. Lunch time (11:00-13:30)

 Sideways market mostly

c. Afternoon time (after 13:30)

 If morning is trending, afternoon will also be trending.
 QUICK TAKEAWAY
1. We get the opportunity in the morning or at afternoon time.
2. If morning is sideways market, then lunch time trending mostly down and
afternoon sideways or reversal or trend continues.

Opening Range Trading Strategy

You will understand the following pointers in detail.

1. Understanding market sentiment
2. Understanding opening range
3. Opening range comparative analysis
4. Opening range trading strategy
UNDERSTANDING MARKET SENTIMENT
1. Different market sentiment is related to the prospects of a specific company. There is also
sentiment based on the company’s industry group, and there is sentiment regarding the
condition of the whole market (corona effect)
2. The force behind any price move is the market’s mood or sentiment. Not news or earnings,
there are already happening. I mean old. In good news prices fall why?
3. Sentiment represents bullish or bearish feelings for the future prospects of a stock. This means
the current movements of a stock’s price are dictated by what the market expects will happen
in the future, not what has already taken place. Any news is old; any reported earnings data is
old information.
How to find out the market sentiment in the chart?
 Through the Principle of the Opening Range (OR) trading approach
 You should look at a stock’s price action and volume. And find out what it demonstrates that its
sentiment is bullish, bearish, or undecided.
Opening price
The Opening Price is the first trade of the day. The balance point of the current day. Daily open prices act as
support and resistance.
The Importance rules.
1. Don’t try to buy below the open on expected up-close days.
2. Don’t try to sell above the opening on expected large down days.

What do we study at the opening?

1. Where price open relative to previous day high and low
2. Where is the next support or resistance level?

OPENING CANDLE in Opening Range Trading Strategy

OPENING THE CANDLE SUGGESTS THE SENTIMENT FOR THE DAY. IF FORMED AT KEY SR
LEVEL(PDL/PDH/LSL/LSH)
 Clean, Strong wide range candle with volume indicate strong market sentiment.
 PIN BAR FROM PDH/PDL also suggests strong sentiment.
The proper knowledge of opening a candle and the price action around a reference point is very crucial for
successful trades. Follow the trend.
Initial move
Two types of players
 Smart money
 Retailer
The market always looks to handle the current business first. So, the initial move will usually tell us about,
 Who were the trapped traders from yesterday scampering for an exit today?
 Who missed an entry yesterday and is rushing into the morning markets?
 Who is driving the price?
once the current business is taken care of, we can then start looking for serious traders trying to give the
market a direction.
How to know the above point?
By analyzing the direction of move and volume and where the price is?
Let’s analyses an initial up move.
1. short covering rallies (discussed in volume price action analysis video
2. Actually, buying up move
3. Morning trap
Why should avoid the initial move for entry (morning rap)?
The “Morning Specials” is composed of two scenarios that can trap novice traders to believe the market is
moving in one direction, but in fact, reversal is just around the corner.
1. Often you see price is moving in one direction very strongly from the opening bell. The
momentum is so strong, that it creates a parabolic curve. It makes you regret not entering
early. But don’t get trapped, this parabolic move often gets reversed. The psychology behind
this is that trend is healthy when it’s made of average trend bars closing near the extremes,
consecutiveness, and small corrections. But when the momentum gets out of control, such as a
parabolic curve with gigantic bars without pullbacks, control has to be restored. Too fast and
too big is a problem because there is no consistency. The market is balanced, where both bulls
and bears can profit. If the price is only favoring one side, resistance will be met. Keep this in
mind when you see volatile movement in the early morning. When you see clear signs of
failure or exhaustion, counter them.
2. The operator will run the price down fast from opening and or below any reference point this
action creates interest among the traders and brings in selling. Smart money objectives are.
 To test the selling power of the public also who long now wind and exit
  The stock which in turn is demanded by the operator and gives him a chance to buy a little long stock
and put out some long orders.

The initial indication of the trend change

 Down opening from a strong close or up opening from a week close indicate may be the
beginning of the change of the trend either way (or type 2)
 When the pullback is deeper and stronger than expected, let it roll over. Wait for test.
 Low volume move
Opening Range (OR) and initial range(IR)
The opening range is defined as the difference between the previous day close to today’s high or low, as shown
on the left side of the image. Initial range defines as the difference between the first high and low of the
day. So, assume the opening range and initial range have the same meaning. So next onward opening range
means the initial range.

Why should you study Opening Range?

 Stocks at opening usually experience violent price action that arises from heavy buy and sells
orders that come into the market. This heavy trading in the first five minutes is the result of the
profit or loss taking of the overnight position holders as well as new investors and traders.
 Wise traders sit on their hands and watch for the opening ranges to develop and allow the
other traders to fight against each other until one side wins.
 Then develop a trading plan in the direction of the opening range breakout.
What is the Opening Range (OR)?
 The Opening Range Trading Strategy is consisting of price and volume as inputs to
determining the current bias (bullish, bearish, or neutral of the stock’s trading activity)
 The Opening Range Trading Strategy is the difference between the first high and low of the day.
  How to find high and low? At least one candle should be completely against the trend. If that
candle has low volume, it suggests more strength on trend cont.

Depending on open the Opening Range, we can predict what types of days may occur
There are various types of day patterns, but generally these four types of day pattern occur again and again
 Trend Day
 Double-Distribution Trend Day
 Typical Day
  Trading Range Day
Trend day
 Small opening range
 usually opens with a wide range candles or pin bar candle.
 sharp move at opening with high volume. Consecutive healthy candle
 each period will have a higher high and higher low

Double distribution trend day

 Relatively inactive during the opening range
 Narrow opening range (accumulation or distribution going on)
 When price breaks out from the opening range give a trending move in either direction

RANGE DAY
 WIDE opening range
 High and low of the day hold though out the day (BOF at both ends)
 Price rotated up and down without any clear directional conviction during the day.


Typical day
 Very wide opening range
 usually opens with an open drive or open test drive.
 sharp move at opening with high volume with very big candle candle
 price generally trading around either day high or day low.
How to analyze Opening Range?
We will ask five questions for analyzing the opening range. The answers to these questions will give your
insight into the stock’s current condition.
These are explained below.
BIG PICTURE
 What price did yesterday?
 What types of days?
Where does it occur with respect to the previous day range?
 Inside or outside of the previous day range. Identify the opening range and see where the
opening range stands, above or below the previous day range (PDR)
 Is market structure change?
 Identify the opening range and see whether the opening range is low at support or the opening
range is high at resistance.
 Why is it important to establish whether or not the low (high) represents significant support
(resistance)? When you are trading using the OR you will approach each day assuming that the
OR high and low are likely to be important price levels
 If you knew that a particular price level was likely to be either the high for the day or a
significant breakout point, wouldn’t you want to focus on that stock and that price level? You
don’t need to know anything about the OR to understand that.
 Where was the last SR crack, on upside or downside, successful crack or failure?


The bias of the day(bullish, bearish, neutral)
 The opening range represents the bulls and bears establish their initial positions for the day.
 The most basic application of the opening range principle is that when a stock moves away
from the opening range indicates that one side is stronger than the other. When a stock moves
above the opening range the bulls are in control. This means the prevailing sentiment in the
stock is bullish. The manner in which the stock breaks above and trades above the opening
range will indicate the strength of the bullish sentiment.
 Don’t buy aggressively until this stock heads upward. Those stocks that trade back above the
opening price are likely to go even higher. This is because of new bulls’ entry plus a short cover
buy order .so after the reaction period market set the tone of the morning trend
 Check bias with the trend.
#Tips what I am following
 Don’t buy below the opening range, buy above the opening range.
 Don’t sell above opening range, sell below the opening range.
 This technique does not work all of the time.
How to find the bias of the day?
 Identify how much a stock retraces relative to how much initial move in the opening range. And
pay attention to the reaction and how stocks tend to act during this period.
 Flat pullback (price consolidates high of the day). Look to see if most of the trading is near one
end of the range. Has the stock spent most of its OR period near the highs of the OR? If so, this
is a bullish Strong buy signal.
 If a stock goes from an up opening and then sells off and remains beneath its opening price
after the morning pullback has stabilized, it’s possible that the stock has reached its high of the
day.
 however, if a stock gaps up and pulls back during the morning pullback, but then rallies to
break above its opening price, the mark-up was probably not a trap gap, and the stock should
make new intraday highs
Volume activity for the entire Opening Range?
 Big volume during the OR means there is something unusual going on and that is exactly what
you want if you are looking for a big breakout day.
Note: Volume it is important to watch the volume carefully when determining if the price will continue in the
direction of the opening range
 If the stock is up and the volume is also high and also the price remains above its opening price
after the early morning pullback, it is an excellent sign that the stock has further to go on the
upside.
 If high volume appears after a up move and the stock immediately comes under selling
pressure, chances are that this volume was a seller.


Opening range relative strength with respect to sector and index

Let’s understand with a bullish relative strength with respect to index or sector. When the market takes out its
OR swing low most stocks will follow suit and take out their respective Opening Range low
Relative to the parent index,
1. If the Stock holds the open or goes sideways when indexing down. The stocks that do not trade
below their OR low are demonstrating bullish intraday relative strength. If the market does not
follow through in its breakdown the strong relative strength stocks are the best candidates for
an immediate rise in price
 2. If the Stock up
These are the sign of strength shown in the stock relative to the index, don’t short this stock, but patiently wait
for the index to show some strength or turn from down to up, then go long

1 SECTOR TEST OPENING RANGE LOW

M&M -higher low (indicate bullish)
MARUTI- also test opening range low.
AMARAJABAT- break opening range low(bearish)
2 sectors making higher low but near opening range low+
M&M- stalling at opening range high (bullish)
MARUTI-making lower low (bearish)
AMARAJABAT- price below opening range low(bearish)
The sector is indicating some strength on the upside as the price struggling to close below the opening range
low and make a higher low. So, want bullish stock for long entry
M&M Only showing a bullish signal compared to the other two stock.
The Opening Range Provides Price Points for Identifying Opportunity and Risk
Entry
1. Breakout
2. Pullback
3. Reversal
Please watch the following video if you want to learn and understand the Opening Range Trading
Strategy concept in a better way.
In the next artic
Multi- time frame Analysis

In Fundamental analysis, we will look after Economy, sector, Industry & Company unlike from that
in technical analysis we will focus on different time frame i.e., Switching time in chart (Big time
frame, medium time frame & small-time frame) depending on Positional base trading, Swing
Trading, or Intraday Trading.

IMPORTANT POINTS:

1. SELECTIONAL OF CORRECT COMBINATION OF TIME FRAME.

2. FOLLOW THE TIME FRAME WHICH IS MORE COMMON.
3. TRADE WITH TREND OF BIGGER TIME FRAME.

# CORRECT COMBINATION
1. INTRADAY
1DAY: CANDLE FORMATION & SENTIMENT (Grandfather)
15 MIN: ANALYSIS (Father)
5 MIN: ENTRY / EXIT (Son)
2. SWING TRADING
1WEEK: CANDLE FORMATION & SENTIMENT
1 DAY: ANALYSIS
1 HOUR: ENTRY / EXIT

3.INVESTMENT/ POSITION
1MONTH: CANDLE FORMATION & SENTIMENT
1 WEEK: ANALYSIS
1 DAY: ENTRY / EXIT

# COMMON TIME FRAME

Most common time frame use by big trader is 5 min, 15 min, 1 hour, 1 day, 1 week & 1 months.

Note:
1. Big time frame is used to understand the trend of market or stock & Small-time frame use to
analysis and entry / exist trading.
2. RULE OF 1:4 OR 1:6 CAN BE APPLIED (IF YOU CONFORM TREND IN 1 HRS THEN ANALYSIS/
ENTRY/EXISTS IN 15 MIN).
  Indicator base trading

NICAL INDIATOR

on indicator
 There is no such leading indicator all indicators are lagging, and indicator shows only Trends (weak
trend, strong trend & very strong trend.
 All indicators are based on Price, Volume, both price and volume and Co-relationship Market or sector
or industry and particular stock mainly market.
 However, you can use indicator in longer time to look the trend on stock.
 For intraday use price action or Volume spread analysis for trading

 TYPES OF TRADING INDICATORS

Technical indicators

When do they signal What do they signal?

LEADING LAGGING OSCILLATOR TREND BREADTH

INDICATOR INDICATOR

Broadly speaking, intraday trading indicators come in 6 flavors. Experts recommend following one
indicator of each type for most decision-making. However, you can follow more indicators as per your
convenience. These flavors are:

1. Oscillators: This is a group of indicators that move up and down between an upper and lower bound.
Examples of this type of indicator include Relative Strength Indicator (RSI), Commodity Channel Index
(CCI), Stochastics, and Moving Averages Convergence Divergence (MACD).

2. Volume: This flavor of indicators mainly relies on trade volumes. They also combine this volume data
with price data. This helps indicate the strength of a trend. Such indicators are Chaikin Money Flow and
On Balance Volume (OBV) among others.
3. Overlays: These are indicators that are overlaid directly on the price movement and are not shown
separately. These serve a variety of purpose, and some traders may use multiple overlays as well.
Popular examples of this type of indicators include: Bollinger Bands, Parabolic SAR, Keltner Channels,
Moving Averages, and Fibonacci Extensions and Retracements.

4. Breadth indicators: These indicators show how the stock market at large is behaving. They do not
directly show how a stock being monitored behaves. Examples include Trin, Ticks, Tiki and the Advance-
Decline Line.

5. Trend: Trend indicators help to capture gains from an asset’s momentum in each direction. These
highlight the direction in which the market is moving. They also offer hints on the strength and likely
continuation of a trend. Moving Averages, RSI, and OBV are examples of trend indicators.

6. Volatility: These indicators show the extent of price change over a given period. When volatility is
high, price swings are expected. When volatility is low, price fluctuations are more subtle. Depending on
the market condition, one could use indicators like Average True Range and Bollinger Bands.

USEFUL INDICATORS FOR INTRADAY TRADING BEGINNER

Now that you have a basic understanding of the broad types of indicators, here’s a list of indicators that
are likely to be useful

1. Moving Average: A Moving Average (MA) is a line showing the average closing price of a stock for a
given period. As the price movements have volatility, it may not always be clear if the price movement
has any long-term trend. MA isolates this trend by showing the average closing price over a period. A
short-term average higher than the long-term average usually indicates that the market is bullish about
the stock under consideration.

2. Bollinger Band: This is a band that shows how the price deviates on average from the moving
average over a period. Traders believe that the stock price is likely to trade within this band. So if a
stock is trading under the Bollinger band, traders expect it to rise and vice versa.

3. Momentum Oscillator: This indicator shows how strong the demand for a share is at a given price
point. For example, if the share price is rising and approaching the weekly high, but the momentum
oscillator is falling, a trader infers this to indicate that the price will soon turn as the demand for the
share is falling. On the other hand, a rising momentum oscillator shows that the trend is strong and is
likely to continue to hold.

4. Relative Strength Indicator: RSI is one of the most popular oscillators. It tracks the last 14 periods by
default and shows the strength of a price. It does so using an index that ranges between 0 and 100. If
the RSI is at 70 or above, it could indicate that market is overbought. This means a price fall or a
correction is due. On the other hand, if the RBI is below 30, it could indicate that the market is oversold.
Traders then expect the price to start rising soon.

5. Commodity Channel Index: CCI measures the difference between the current market price of an
asset and its historical average. A CCI above zero indicates the price is above the historic average. If it is
below zero, the price is below the historical average. CCI can rise or fall indefinitely. So, it is used to
 assess if an asset has been overbought or oversold. Traders check this for individual assets by studying
the historical extreme CCI readings at which a price reversal occurred.

Technical indicators are mathematical calculations based on a security's price and/or volume. They are
used by traders and investors to analyze market trends, identify trading opportunities, and make
trading decisions.

Traders can use a combination of these indicators to develop a trading strategy and make informed
trading decisions. It is important to remember that no single indicator can predict market movements
with 100% accuracy, and traders should use technical indicators as one part of a comprehensive trading
plan.

Leading indicators and lagging indicators are two types of technical indicators used by traders to
analyze market trends and make trading decisions.

1. Leading Indicators: Leading indicators are technical indicators that provide signals before a trend, or a
reversal occurs. They are called leading indicators because they lead price movements. Examples of
leading indicators include the Stochastic Oscillator, Relative Strength Index (RSI), Moving Average
Convergence Divergence (MACD), and the Ichimoku Cloud.

Leading indicators are popular among traders who want to catch a trend as it starts or who want to
enter a trade before the price moves too much. However, leading indicators can also produce false
signals and can be unreliable in certain market conditions.

2. Lagging Indicators: Lagging indicators are technical indicators that provide signals after a trend or a
reversal has already occurred. They are called lagging indicators because they lag behind price
movements. Examples of lagging indicators include Moving Averages, Bollinger Bands, and the Average
True Range (ATR).

Lagging indicators are useful for confirming trends and identifying support and resistance levels.
However, they may not be ideal for traders who want to enter a trade at the beginning of a trend or
who want to catch a trend reversal.

In summary, leading indicators can help traders identify potential market movements before they
occur, while lagging indicators can help traders confirm trends and identify support and resistance
levels after they have occurred. Traders often use a combination of leading and lagging indicators in
their trading strategies to improve their trading decisions.

There are several types of technical indicators, including:

1. Trend indicators: These indicators help identify the direction and strength of a trend. Examples include
moving averages, the Average Directional Index (ADX), and the Parabolic SAR.
2. Momentum indicators: These indicators help traders identify the strength and speed of a price
movement. Examples include the Relative Strength Index (RSI), Stochastic Oscillator, and MACD
(Moving Average Convergence Divergence).
 3. Volatility indicators: These indicators help traders identify the level of volatility in the market. Examples
include the Bollinger Bands, Average True Range (ATR), and the Chaikin Volatility Indicator.
4. Volume indicators: These indicators help traders identify the strength of market participation by
measuring the volume of shares or contracts traded. Examples include the On-Balance Volume (OBV)
and the Volume Weighted Average Price (VWAP).
5. Oscillators: These indicators help traders identify overbought and oversold conditions. Examples include
the RSI, Stochastic Oscillator, and the Commodity Channel Index (CCI).

1. ATR

What is the ATR Indicator: The Average True Range (ATR) indicator is a technical analysis tool
used to measure market volatility. It was developed by J. Welles Wilder Jr. and introduced in
his book "New Concepts in Technical Trading Systems" in 1978. The ATR indicator provides
traders and investors with insights into the degree of price volatility in a market over a specific
period.

Calculation: The ATR calculation involves determining the average of the True Range (TR) values
over a designated period. The True Range is calculated as the greatest of the following three
values:

1. High minus Low

2. Absolute value of High minus the previous Close
3. Absolute value of Low minus the previous Close

The average of these True Range values over the specified period gives you the Average True
Range.

Interpretation: Higher ATR values suggest higher volatility, indicating wider price fluctuations over
the given period. Conversely, lower ATR values indicate lower volatility and relatively smaller
price movements. Traders can use ATR in various ways:

1. Volatility Assessment: ATR helps traders understand whether the current market conditions
are characterized by high or low volatility.
2. Stop Placement: ATR can guide the placement of stop-loss orders. For instance, a trader might
set a wider stop-loss in a high volatility market to allow for larger price swings.
3. Position Sizing: Traders can adjust the size of their positions based on the ATR. In high
volatility markets, smaller positions might be taken to manage risk.
4. Trend Identification: Rapid increases in ATR may indicate the potential beginning of a new
trend or a strong move.
5. Breakout Strategies: Traders use ATR to identify potential breakout points. A breakout above
a certain ATR level might signal a strong upward movement.
6. Range-Bound Markets: In low volatility scenarios, traders might expect the price to remain
within a relatively narrow range.

Example: Consider a stock with the following price data over a 10-day period:

 Day 1: High = $50, Low = $45, Previous Close = $48

 Day 2: High = $52, Low = $47, Previous Close = $50
 ... (and so on for 10 days)

For simplicity, let's say the True Range values for these 10 days are: 5, 5, 5, 6, 9, 7, 8, 6, 7, 4.

The ATR would be calculated by averaging these True Range values over the 10-day period. If you
sum up these True Range values and divide by 10 (the number of days), you get the ATR for
that specific period.

Conclusion: The ATR indicator is a valuable tool for understanding market volatility. By
incorporating ATR into their analysis, traders can make more informed decisions about risk
management, trade sizing, and potential entry and exit points in the market. It's important to
note that like any indicator, ATR should be used in conjunction with other technical and
fundamental analysis techniques for a comprehensive trading strategy.

2. RSI

3. VWAP

4. ADX

5. EMA

make a pine script for trading which show Buy when price is on and above ema50, adx is
between 20 to 35 and rsi is in increasing order from 20 and sell when price is on and below
ema50, adx is between 20 To 35 and rsi is decreasing order from 80 rsi6 Bollinger band