Nifty 50 futures<\/h2>\n\n\n\nThe Weekly<\/em> Nifty 50 chart<\/h3>\n\n\n\n![\"Nifty](\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/09\/breakout-gap-1-680x383.png\" "\\"\\"")
<\/a><\/figure>\n\n\n\n\n- General Discussion<\/strong>
- After giving a strong breakout above level A (shown in the chart) the market never tested that level again i.e., formed a breakout gap.<\/li><\/ul>
- Another bear bar closing near its low increases the probability for 2nd<\/sup> leg down. Also the market is near a big trading range top so probability favors bears.<\/li><\/ul>
- Since the bull leg in this big trading range was very strong, some bears would avoid selling until they see more strong bear bars closing near their lows.<\/li><\/ul><\/li>
- Deeper into the price action<\/strong>
- 2nd<\/sup> leg up in higher high double top was strong, this decreases the probability of bear breakout of the double top neckline and measured move down.<\/li><\/ul>
- In general, there is a 40% chance of a bear breakout and measured move down for a double top, so you should maintain at least a 1:2 Risk to Reward for positive traders equation.<\/li><\/ul>
- 2nd<\/sup> bear bar after the double top has a tail above, which means the market currently is in a trading range mode rather than a start of a strong trend. \u00a0<\/li><\/ul><\/li>
- Patterns<\/strong>
- Open breakout gap which is acting like a magnet.<\/li><\/ul>
- As this gap acts as a magnet, this increases the probability of bear breakout of the double top.<\/li><\/ul><\/li>
- Pro Tip<\/strong>
- Whenever breakout gaps form in a trading range environment like the above then they have a high probability of being filled soon.<\/li><\/ul>
- Example: If the market formed a bull breakout gap (not filled) in the trading range, then selling near the top of the trading range would be reasonable.<\/li><\/ul>
- But when breakout gaps form in a bull trend, then you should not be selling, because in trending markets breakout gaps improve the strength of a trend and not as a magnet.<\/li><\/ul><\/li><\/ul>\n<\/div><\/div>\n\n\n\n
The Daily<\/em> Nifty 50 chart<\/h3>\n\n\n\n![\"Nifty](\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/09\/broad-channel-680x383.png\" "\\"\\"")
<\/a><\/figure>\n\n\n\n- General Discussion<\/strong>
- Market forming higher highs and higher lows which means the market is in a broad bull channel.<\/li><\/ul>
- Currently, the market is near the low of the broad bull channel which means there would be bulls buying below bars assuming they would get 2 legs up in this channel.<\/li><\/ul>
- The best bears can get for now is a trading range until the market forms strong consecutive bear bars.<\/li><\/ul><\/li>
- Deeper into price action<\/strong>
- Look at the price action in the above broad bull channel, there are:
- Small bear and bull bars<\/li><\/ul>
- Bad follow through after strong bull or bear bars<\/li><\/ul>
- Bars have tails above and below<\/li><\/ul><\/li><\/ul>
- This is trading range price action which is very common in broad channels, so your goal should be buying low and selling high.<\/li><\/ul>
- Ways you can enter a trading range or broad channels:
- Buying below swing lows with limit orders<\/li><\/ul>
- Buying High 1 near trading range bottom<\/li><\/ul>
- Buying High 2 near trading range bottom<\/li><\/ul>
- Buying on big bull bar closing near high near trading range bottom<\/li><\/ul>
- Buying on small consecutive bull bars near trading range bottom<\/li><\/ul><\/li><\/ul><\/li><\/ul>\n\n\n\n
- Patterns<\/strong>
- Higher Highs and Higher Lows therefore a broad bull channel.<\/li><\/ul>
- Broad bull channels have trading range price action thus you trade them like a trading range, i.e., buy low sell high scalp.<\/li><\/ul>
<\/a><\/figure>\n\n\n\n\n
- General Discussion<\/strong>
- After giving a strong breakout above level A (shown in the chart) the market never tested that level again i.e., formed a breakout gap.<\/li><\/ul>
- Another bear bar closing near its low increases the probability for 2nd<\/sup> leg down. Also the market is near a big trading range top so probability favors bears.<\/li><\/ul>
- Since the bull leg in this big trading range was very strong, some bears would avoid selling until they see more strong bear bars closing near their lows.<\/li><\/ul><\/li>
- Deeper into the price action<\/strong>
- 2nd<\/sup> leg up in higher high double top was strong, this decreases the probability of bear breakout of the double top neckline and measured move down.<\/li><\/ul>
- In general, there is a 40% chance of a bear breakout and measured move down for a double top, so you should maintain at least a 1:2 Risk to Reward for positive traders equation.<\/li><\/ul>
- 2nd<\/sup> bear bar after the double top has a tail above, which means the market currently is in a trading range mode rather than a start of a strong trend. \u00a0<\/li><\/ul><\/li>
- Patterns<\/strong>
- Open breakout gap which is acting like a magnet.<\/li><\/ul>
- As this gap acts as a magnet, this increases the probability of bear breakout of the double top.<\/li><\/ul><\/li>
- Pro Tip<\/strong>
- Whenever breakout gaps form in a trading range environment like the above then they have a high probability of being filled soon.<\/li><\/ul>
- Example: If the market formed a bull breakout gap (not filled) in the trading range, then selling near the top of the trading range would be reasonable.<\/li><\/ul>
- But when breakout gaps form in a bull trend, then you should not be selling, because in trending markets breakout gaps improve the strength of a trend and not as a magnet.<\/li><\/ul><\/li><\/ul>\n<\/div><\/div>\n\n\n\n
The Daily<\/em> Nifty 50 chart<\/h3>\n\n\n\n
<\/a><\/figure>\n\n\n\n- General Discussion<\/strong>
- Market forming higher highs and higher lows which means the market is in a broad bull channel.<\/li><\/ul>
- Currently, the market is near the low of the broad bull channel which means there would be bulls buying below bars assuming they would get 2 legs up in this channel.<\/li><\/ul>
- The best bears can get for now is a trading range until the market forms strong consecutive bear bars.<\/li><\/ul><\/li>
- Deeper into price action<\/strong>
- Look at the price action in the above broad bull channel, there are:
- Small bear and bull bars<\/li><\/ul>
- Bad follow through after strong bull or bear bars<\/li><\/ul>
- Bars have tails above and below<\/li><\/ul><\/li><\/ul>
- This is trading range price action which is very common in broad channels, so your goal should be buying low and selling high.<\/li><\/ul>
- Ways you can enter a trading range or broad channels:
- Buying below swing lows with limit orders<\/li><\/ul>
- Buying High 1 near trading range bottom<\/li><\/ul>
- Buying High 2 near trading range bottom<\/li><\/ul>
- Buying on big bull bar closing near high near trading range bottom<\/li><\/ul>
- Buying on small consecutive bull bars near trading range bottom<\/li><\/ul><\/li><\/ul><\/li><\/ul>\n\n\n\n
- Patterns<\/strong>
- Higher Highs and Higher Lows therefore a broad bull channel.<\/li><\/ul>
- Broad bull channels have trading range price action thus you trade them like a trading range, i.e., buy low sell high scalp.<\/li><\/ul>
- Higher Highs and Higher Lows therefore a broad bull channel.<\/li><\/ul>
- Patterns<\/strong>
- Buying on small consecutive bull bars near trading range bottom<\/li><\/ul><\/li><\/ul><\/li><\/ul>\n\n\n\n
- Buying on big bull bar closing near high near trading range bottom<\/li><\/ul>
- Buying High 2 near trading range bottom<\/li><\/ul>
- Buying High 1 near trading range bottom<\/li><\/ul>
- Buying below swing lows with limit orders<\/li><\/ul>
- Ways you can enter a trading range or broad channels:
- This is trading range price action which is very common in broad channels, so your goal should be buying low and selling high.<\/li><\/ul>
- Bars have tails above and below<\/li><\/ul><\/li><\/ul>
- Bad follow through after strong bull or bear bars<\/li><\/ul>
- Small bear and bull bars<\/li><\/ul>
- Look at the price action in the above broad bull channel, there are:
- Currently, the market is near the low of the broad bull channel which means there would be bulls buying below bars assuming they would get 2 legs up in this channel.<\/li><\/ul>
- Market forming higher highs and higher lows which means the market is in a broad bull channel.<\/li><\/ul>
- General Discussion<\/strong>
- But when breakout gaps form in a bull trend, then you should not be selling, because in trending markets breakout gaps improve the strength of a trend and not as a magnet.<\/li><\/ul><\/li><\/ul>\n<\/div><\/div>\n\n\n\n
- Example: If the market formed a bull breakout gap (not filled) in the trading range, then selling near the top of the trading range would be reasonable.<\/li><\/ul>
- Whenever breakout gaps form in a trading range environment like the above then they have a high probability of being filled soon.<\/li><\/ul>
- Patterns<\/strong>
- 2nd<\/sup> bear bar after the double top has a tail above, which means the market currently is in a trading range mode rather than a start of a strong trend. \u00a0<\/li><\/ul><\/li>
- In general, there is a 40% chance of a bear breakout and measured move down for a double top, so you should maintain at least a 1:2 Risk to Reward for positive traders equation.<\/li><\/ul>
- 2nd<\/sup> leg up in higher high double top was strong, this decreases the probability of bear breakout of the double top neckline and measured move down.<\/li><\/ul>
- Another bear bar closing near its low increases the probability for 2nd<\/sup> leg down. Also the market is near a big trading range top so probability favors bears.<\/li><\/ul>
- After giving a strong breakout above level A (shown in the chart) the market never tested that level again i.e., formed a breakout gap.<\/li><\/ul>