Module 2 Technical Analysis

Chapter 3

The Chart Types

338

M2-Ch3-title

3.1– Overview

Having recognized that the Open (O), high (H), low (L), and close (C) serves as the best way to summarize the trading action for the given time period, we need a charting technique that displays this information in the most comprehensible way. If not for a good charting technique, charts can get quite complex. Each trading day has four data points’ i.e the OHLC. If we are looking at a 10 day chart, we need to visualize 40 data points (1 day x 4 data points per day). So you can imagine how complex it would be to visualize 6 months or a year’s data.

As you may have guessed, the regular charts that we are generally used to – like the column chart, pie chart, area chart etc does not work for technical analysis. The only exception to this is the line chart.

The regular charts don’t work mainly because they display one data point at a given point in time. However Technical Analysis requires four data points to be displayed at the same time.

Below are some of the chart types:

  1. Line chart
  2. Bar Chart
  3. Japanese Candlestick

The focus of this module will be on the Japanese Candlesticks however before we get to candlesticks, we will understand why we don’t use the line and bar chart.

3.2 – The Line and Bar chart

The line chart is the most basic chart type and it uses only one data point to form the chart. When it comes to technical analysis, a line chart is formed by plotting the closing prices of a stock or an index. A dot is placed for each closing price and the various dots are then connected by a line.

If we are looking 60 day data then the line chart is formed by connecting the dots of the closing prices for 60 days.

M2-Ch3-Chart1

The line charts can be plotted for various time frames namely monthly, weekly, hourly etc. So ,if you wish to draw a weekly line chart, you can use weekly closing prices of securities and likewise for the other time frames as well.

The advantage of the line chart is its simplicity. With one glance, the trader can identify the generic trend of the security. However the disadvantage of the line chart is also its simplicity. Besides giving the analysts a view on the trend, the line chart does not provide any additional detail. Plus the line chart takes into consideration only the closing prices ignoring the open, high and low. For this reason traders prefer not to use the line charts.

The bar chart on the other hand is a bit more versatile. A bar chart displays all the four price variables namely open, high, low, and close. A bar has three components.

  1. The central line – The top of the bar indicates the highest price the security has reached. The bottom end of the bar indicates the lowest price for the same period.
  2. The left mark/tick – indicates the open
  3. The right mark/tick – indicates the close

For example assume the OHLC data for a stock as follows:

Open – 65
High – 70
Low – 60
Close – 68

For the above data, the bar chart would look like this:

M2-ch3-diagrams-1

As you can see, in a single bar, we can plot four different price points. If you wish to view 5 days chart, as you would imagine we will have 5 vertical bars. So on and so forth.

M2-Ch3-Chart2

Note the position of the left and right mark on the bar chart varies based on how the market has moved for the given day.

If the left mark, which represents the opening price is placed lower than the right mark, it indicates that the close is higher than the open (close > open), hence a positive day for the markets. For example consider this: O = 46, H = 51, L = 45, C = 49. To indicate it is a bullish day, the bar is represented in blue color.

M2-ch3-diagrams-2

Likewise if the left mark is placed higher than the right mark it indicates that the close is lower than the open (close <open), hence a negative day for markets. For example consider this: O = 74, H=76, L=70, C=71. To indicate it is a bearish day, the bar is represented in red color.

M2-ch3-diagrams-3

The length of the central line indicates the range for the day. A range can be defined as the difference between the high and low. Longer the line, bigger the range, shorter the line, smaller is the range.

While the bar chart displays all the four data points it still lacks a visual appeal. This is probably the biggest disadvantage of a bar chart. It becomes really hard to spot potential patterns brewing when one is looking at a bar chart. The complexity increases when a trader has to analyze multiple charts during the day.

Hence for this reason the traders do not use bar charts. However it is worth mentioning that there are traders who prefer to use bar charts. But if you are starting fresh, I would strongly recommend the use of Japanese Candlesticks. Candlesticks are the default option for the majority in the trading community.

3.3 – History of the Japanese Candlestick

Before we jump in, it is worth spending time to understand in brief the history of the Japanese Candlesticks. As the name suggests, the candlesticks originated from Japan. The earliest use of candlesticks dates back to the 18th century by a Japanese rice merchant named Homma Munehisa.

Though the candlesticks have been in existence for a long time in Japan, and are probably the oldest form of price analysis, the western world traders were clueless about it. It is believed that sometime around 1980’s a trader named Steve Nison accidentally discovered candlesticks, and he actually introduced the methodology to the rest of the world. He authored the first ever book on candlesticks titled “Japanese Candlestick Charting Techniques” which is still a favorite amongst many traders.

Most of the pattern in candlesticks still retains the Japanese names; thus giving an oriental feel to technical analysis.

3.4 – Candlestick Anatomy

While in a bar chart the open and the close prices are shown by a tick on the left and the right sides of the bar respectively, however in a candlestick the open and close prices are displayed by a rectangular body.

In a candle stick chart, candles can be classified as a bullish or bearish candle usually represented by blue/green/white and red/black candles respectively. Needless to say, the colors can be customized to any color of your choice; the technical analysis software allows you to do this. In this module we have opted for the blue and red combination to represent bullish and bearish candles respectively.

Let us look at the bullish candle. The candlestick, like a bar chart is made of 3 components.

  1. The Central real body – The real body, rectangular in shape connects the opening and closing price
  2. Upper shadow – Connects the high point to the close
  3. Lower Shadow – Connects the low point to the open

Have a look at the image below to understand how a bullish candlestick is formed:

M2-ch3-diagrams-4

This is best understood with an example. Let us assume the prices as follows..

Open = 62
High = 70
Low = 58
Close = 67

M2-ch3-diagrams-5

Likewise, the bearish candle also has 3 components:

  1. The Central real body – The real body, rectangular in shape which connects the opening and closing price. However the opening is at the top end and the closing is at the bottom end of the rectangle
  2. Upper shadow – Connects the high point to the open
  3. Lower Shadow – Connects the Low point to the close

This is how a bearish candle would look like:

M2-ch3-diagrams-6

This is best understood with an example. Let us assume the prices as follows..

Open = 456
High = 470
Low = 420
Close = 435

M2-ch3-diagrams-7

Here is a little exercise to help you understand the candlestick pattern better. Try and plot the candlesticks for the given data.

Day Open High Low Close
Day 1 430 444 425 438
Day 2 445 455 438 450
Day 3 445 455 430 437

If you find any difficulty in doing this exercise, feel free to ask your query in the comments at the end of this chapter.

Once you internalize the way candlesticks are plotted, reading the candlesticks to identify patterns becomes a lot easier.

This is how the candlestick chart looks like if you were to plot them on a time series. The blue candle indicates bullishness and red indicates bearishness.

M2-Ch3-Chart3

Also note, a long bodied candle depicts strong buying or selling activity. A short bodied candle depicts less trading activity and hence less price movement.

To sum up, candlesticks are easier to interpret in comparison to the bar chart. Candlesticks help you to quickly visualize the relationship between the open and close as well as the high and low price points.

3.5 – A note on time frames

A time frame is defined as the time duration during which one chooses to study a particular chart. Some of the popular time frames that technical analysts use are:

  • Monthly Charts
  • Weekly charts
  • Daily or End of day charts
  • Intraday charts – 30 Mins, 15 mins and 5 minutes

One can customize the time frame as per their requirement. For example a high frequency trader may want to use a 1 minute chart as opposed to any other time frame.

Here is a quick note on different types of time frames.

Time Frame Open High Low Close No of Candles
Monthly The opening price on the first day of the month Highest price at which the stock traded during the entire month Lowest price at which the stock traded during the entire month The closing price on the last day of the month 12 candles for the entire year
Weekly Monday’s Opening Price Highest price at which the stock traded during the entire week Lowest price at which the stock traded during the entire week The closing price on Friday 52 candles for the entire year
Daily or EOD Opening price of the day Highest price at which the stock traded during the day Lowest price at which the stock traded during the entire day The closing price of the day One candle per day, 252 candles for the entire year
Intraday 30 minutes The opening price at the beginning of the 1st minute Highest price at which the stock traded during the 30 minute duration Lowest price at which the stock traded during the 30 minute duration The closing price as on the 30th minute Approximately 12 candles per day
Intraday 15 minutes The opening price at the beginning of the 1st minute Highest price at which the stock traded during the 15 minute duration Lowest price at which the stock traded during the 15 minute duration The closing price as on the 15th minute 25 candles per day
Intraday 5 minutes The opening price at the beginning of the 1st minute Highest price at which the stock traded during the 5 minute duration Lowest price at which the stock traded during the 5 minute duration The closing price as on the 5th minute 75 candles per day

As you can see from the table above as and when the time frame reduces, the number of candles (data points) increase. Based on the type of trader you are, you need to take a stand on the time frame you need.

The data can either be information or noise. As a trader, you need to filter information from noise. For instance a long term investor is better off looking at weekly or monthly charts as this would provide information. While on the other hand an intraday trader executing 1 or 2 trades per day is better off looking at end of day (EOD) or at best 15 mins charts. Likewise for a high frequency trader, a 1 minute charts can convey a lot of information.

So based on your stance as a trader you need to choose a time frame. This is extremely crucial for your trading success, because a successful trader looks for information and discards the noise.


Key takeaways from this chapter

  1.  Conventional chart type cannot be used for technical analysis as we need to plot 4 data points simultaneously
  2.  Line chart can be used to interpret trends but besides that no other information can be derived
  3.  Bar charts lacks visual appeal and one cannot identify patterns easily. For this reason bar charts are not very popular
  4.  There are two types of candlesticks – Bullish candle and Bearish candle. The structure of the candlestick however remains the same
  5.  When close > open = It is a Bullish candle. When close < open = It is a Bearish candle
  6.  Time frames play a very crucial role in defining the trading success. One has to choose this carefully
  7.  The number of candle increases as and when the frequency increases
  8.  A traders should be in a position to discard noise from relevant information

338 comments

  1. HAWWA says:

    Dear sir,
    When close > open = It is a Bullish candle. When close < open = It is a Bearish candle.
    So, i think i got my answer now. For identifying whether the market is bullish or not, we had to calculate open minus close.

  2. Amitvikram says:

    In the earlier module, it was mentioned that TA is not for long term investor, but here it is mentioned that for long term weekly/monthly charts to be used. Its a bit contradictory, please elaborate. Also what about short term(week to a month) or medium (weeks to few months) terms, what charts to be used?

    • Karthik Rangappa says:

      If your investment horizon is over 1 – 2 years then it makes sense to look into the fundamentals of the company. However if you want to set up a trade for 3-4 months then it makes sense to look into TA. So yeah, from convenience point of view it makes sense to bifurcate long term into 2 baskets – The TA based long term (3-4 or maybe upto 6 months) and The FA based long term (1-2 years plus).

  3. mahesh12 says:

    information is very good .. but i suggest zerodha should have placed a video tutorial for TECHNICAL ANALYSIS for better understanding of the charts .

  4. reyazn19 says:

    Very good, informative, simple words and short.BUt one should already know how to draw graphs.

  5. ichhant says:

    Please suggest good free software to plot these charts. 🙂

  6. vishvendra89 says:

    While in a bar chart the open and *low* prices are shown by a tick on the left or the right sides of the bar, however in a candlestick the open and close prices are displayed by a rectangular body.
    Pls correct it – open and close prices, thanks

  7. Jois says:

    Dear Mr Karthik,
    Can we say marked candles as bearish engulfing?

  8. hjm says:

    @ Karthik Rangappa,
    Sir,
    Can you please suggest any sites/softwares wherein , say a data about a particular stock over a period of say 10 days gets synced into an a excel sheet as and when required, coz i have a problem updating the prices manually ..
    Any solution for this ?
    Any free softwares for indian markets?
    Thanks,
    Regards
    hjm–a proud and thankful zerodhiite

  9. floyd lewis says:

    Is it possible for me to use the datafeeds from Pi to my RStudio setup. Currently I use RStudio to connect to Yahoo and google finance for analysis.

    • Karthik Rangappa says:

      We don’t provide feeds from Pi to any other source as it is a regulatory mandate..it falls under the data redistribution act.

      • floyd lewis says:

        Ok, In that case what is the protocol used by Pi to get the data from the server. What is the latency? Is this something I could use once I signup?

    • Vj says:

      Hi FLOYD ,

      Are you from Bangalore ? I have Rstudio installed and would like to learn the price analysis . Would you help
      ?

  10. Ranjeet46 says:

    The problem with demo candels given above is that both candles are depicted in red. Signalling a bearish candle where the open was lower than the close. That is being quite problematic

  11. ashokbhide says:

    in earlier version I was able to expand/reduce MACD/RSI rows as required for better view. but now i cant do it. why? can it be restored?

  12. sagar says:

    Do you know of any websites similar to nsebsecharts dot com which offer FREE Live technical charts with Realtime ticker?

  13. RCGupta says:

    I found this chapter very informative and useful ; but i still feel that line chart is quite useful for a beginner like me.

  14. sarath says:

    what is renko chart? which type of traders commonly it use?

  15. HARSH says:

    I dont have zerodha account yet. Can I use PI software???

  16. Ravi says:

    Hi Karthik, I have account with Zerodha, only problem is PI is not supported in Mac OS…. I don’t have windows in mac 🙁 . is any other free software /URLs to analyze in Mac

  17. Naveen says:

    Do we OHLC only for a day or can we have it for 15-20 minutes or any other shorter time frame also?

    • Karthik Rangappa says:

      OHLC for a day is the opening price of the day, highest traded price of the day, lowest traded price of the day, and the closing price of the day. Similarly, for a 5/10/15/20 minute chart the OHLC will be compressed for the time frame. So yes, you can have it for 15-20 minutes.

  18. Anand says:

    Hi Karthik, I am going through Varsity and let me tell you that this is one of the ‘best’ ‘best’ resource to start if you are a newbee to trading.
    The quality of material is excellent. What leave me baffeled is the honesty with which you and Zd team promptly answer the questions posed by readers.
    I particularly like the way in which you teach. You are a excellent teacher. The way in which you pick up simple examples to drilldown the concepts is simply awesome. Heartily thank you for the wonderful work that you and Zd team are doing 🙂 🙂

    Best Regards,
    Anand

    • Karthik Rangappa says:

      Thanks Anand, encouragement such as this motivates us to do better and better:). Please stay tuned, we have some really exciting content coming up!

  19. Chandrashekhar Dasappanavar says:

    I wish Pi had weekly and monthly charts. It’ll such a nice improvement.

  20. Rsvindra says:

    I trade and work on Kite tool. Is PI also required to be used for charts and analysis or Is Kite alone is sufficient to identify trades based on charts available in Kite tool website

    • Karthik Rangappa says:

      Charts are the same, so that leaves us with which platform is convenient. For me both are good, but I like Kite as its a browser based application.

  21. Darshan says:

    Hi,
    I needed to know about Renko Charts. Can you provide some information about using those charts for futures trading. Also need to know how to use Renko Charts in Kite.

    Darshan

    • Karthik Rangappa says:

      Renko is available on Kite, just click on chart types in your chart window and scroll down to select Renko. We will try and put up some notes on Renko.

  22. MANISH SINGH INSAN says:

    i make callouts for a long time and i want that there will be a search option in chart so that i can search my previous kite easily by typing in search box

  23. karthick says:

    Hello,
    Can you please add wicks to the Range Bars chart. Otherwise, it looks so easy that a monkey can trade. Obviously its quite misleading. Range Bars without wicks is close to useless IMHO. Thanks for your understanding.

  24. NareshS says:

    Hi Karthik
    Is it possible to view a particular intraday or even a weekly chart on Pi?
    For e.g I need a chart for 1st June 2015 Nifty?
    If not, can you recommend any source/website/software to get such information?
    Thanks

  25. Naresh says:

    Dear Nithin, Can you please return the PERIODICITY functionality to Pi. Not being able to plot weekly , monthly etc. on Pi . Prefer Pi to Kite. Thanks

  26. Madhuri says:

    I’m not a geek but wonder why there is no software to determine support and resistance levels of a particular stock.

  27. harago says:

    is it ok to take ltp instead of close ?

  28. Naresh Kumar says:

    How to trade with renko chart. what is size box size we have to put trade nifty and bank nifty. Please reply

  29. ELUMALAI says:

    Sir, Is there any facility to see the vertical (y-axis) price line in the charts, in terms of % value (% value w.r.t the previous days close price) in both Kite and Pi. The same is available in i-charts. If not available kindly add the same, since it will be very useful for us instead of manually calculating the same every time when the price moves up or down.

    • Karthik Rangappa says:

      Thanks for the feedback. Unfortunately we do not have the option as of now, not sure if we can add this feature easily. I’ll anyway check with our team.

  30. ELUMALAI says:

    Sir, What is Periodicity, Interval and Days shown in the pop up window, on trying to open a chart in Pi.

  31. ELUMALAI says:

    Sir,
    Is there any facility in Kite and Pi to indicate the Bought / Sold Positions in the Charts (i.e. small blue and red arrows automatically generated, indicating the positions where we have bought or sold a stock). It will be useful to know how far the chart has moved from the position from which we have Bought / Sold, which will be useful in intra day Trading. The same is available in Metatrader

  32. Thahazeeb says:

    I found many instances where there was a red candle formation even though it closed higher than the previous candle. What could be the reason?

    • Karthik Rangappa says:

      Can you please share some examples? Also, where did you find this? On kite/Pi?

      • Thahazeeb says:

        I found it on Zerodha Pi on a Nifty daily chart. Now, I don’t know if I have misunderstood something. On November 9, there is a long green candle but on November 10, I see a red candle although it closed above the previous candle. Can you please check and reply?

        • Karthik Rangappa says:

          Request you to please email [email protected] for this.

        • Akhilesh K says:

          Thumb rule, if the closing price on Dec 10 opening price on Dec 9, then the candle will be green for Dec 9..
          No need to mix Dec 9 & 10..
          Green and red color of the candle on a particular day, depends only on the opening and closing price of that particular day..
          Hope it clarifies..

          • Akhilesh says:

            Sorry..in the last comment, greater than and less than symbols could not be posted in the comment.
            If Closing price on Dec 10 is less than opening price on Dec 10, candle for Dec 10 will be red.
            If Closing price on Dec 9 is greater than opening price on Dec 9, candle for Dec 9 will be green.
            Don’t mix Dec 10 with Dec 9.
            Red or green candle for a particular day only depends on Opening and Closing price for that particular day

  33. ELUMALAI says:

    In Kite whenever we click on the notification symbol (i.e. Bell Symbol) all the Menu items on the top ( e.g. Dashboard, Orderbook, Holdings, Positions, Funds and Apps) are vanishing. Please check and solve the same.

  34. Ramanand Kulkarni says:

    As there are 2 types of Renko charts, 1 with only body and 2 with upper and lower shadows.
    Can some body help me if i want renko chart with upper and lower shadows on KITE.

    • Karthik Rangappa says:

      I’m not too familiar with Renko. However, I’ve requested one of my colleagues to touch base with you soon.

    • Ajay singh says:

      Hi,kite is provide this services.he called coloured bar(without shadow) and candle stick(with shadow).I hope you not have any queries on this topic.

  35. ELUMALAI says:

    Is BUY STOP and SELL STOP orders available in Kite and Pi as available in Meta Trader.

  36. ELUMALAI says:

    I am not meaning the regular Stop Loss orders. BUY STOP and SELL STOP are pending orders as explained below, along with BUY LIMIT and SELL LIMIT for comparision.

    Buy Stop = Going LONG once price comes UP to hit the entry price mentioned in the order.
    Buy Limit = Going LONG once price comes DOWN to hit the entry price mentioned in the order.
    Sell Stop = Going SHORT once price comes DOWN to hit the entry price mentioned in the order.
    Sell Limit = Going SHORT once price comes UP to hit the entry price mentioned in the order.

  37. Vignesh says:

    Hi Karthick,

    Am new to trading. I have a doubt here. In the no.of.candles/ time frame table,
    Monthly >12 months/yr > 12 candles,
    Weekly > 52 weeks/yr > 52 candles,
    Daily > 365 days/yr > one candle/day but total no.of.candles is given as 252…but it should be 365 right?
    Intraday 30 minutes > 2 candles/hr will make 24 candles/day..right?
    Similarly there are differences down the table…
    Please correct me if am wrong 🙂

    • Karthik Rangappa says:

      Your query made me realize that there is a mistake in monthly and weekly as well…there are only 252 trading days a year or about 22 trading days a week …5 a week. It needs to be adjusted accordingly.

  38. manish agarwal says:

    Hi, I have been doing some research on Google about Technical Analysis and One thing that caught my attention was the type scale of the price chart that we see matters a lot. Basically there are two type of scale 1) Linear scale 2) Log scale. And I have learned that using log scale is more accurate than the linear scale. I just want to throw this topic for discussion on this platform for more insights on the same.

  39. kabir says:

    hey kartik how can use Elliott Wave chart in kite terminal pls tell me

  40. Ram says:

    Can u include 2 minutes time frame in the chart?

  41. Ajay singh says:

    Hi ,I want to know zerodha provide live renko chart or not.if yes zerodha thanks if not please provide this feature.

  42. RAJASEKAR says:

    I want to see one week time frame chart for past 10 years. Please help me out

  43. Ajay singh says:

    I see zerodha provided​ this chart on market hours from28april

  44. Ajay singh says:

    I am not able to enter box size(renko chart) in zerodha kite .always i have same result not process my box size always auto selected box.please help.me

  45. prem says:

    Hi any one please help me,
    Is there any charts that gives us information about liquidity of stocks, I f not where do I get informations about it……………….

  46. Trader_Pro says:

    Kite has RENKO chart. But what I want to know is that are these charts closing price based or hi/low based? In closing price based charts, previous action before the close of candle is neglected and thus it becomes very misleading. Hi/low charts will have hi of candle as hi point in the period and low as low of period, this is better as entire price movement is captured this way. Please let me know Kite RENKO charts are of what type?

  47. Sanjay says:

    I’m a beginner so sorry if I sound idiotic however I want to understand how can a chart help me trading as I can only see what has happened in last 5 minute of duration however it won’t let me know that what exactly is going to happen in next 5 minutes ? Please let me know if anyone can answer this.

    • Karthik Rangappa says:

      In fact, nothing in real world will let you figure out what will happen over the next 5 mins in markets :). We all tend to make intelligent guesses, based on prior chart patters.

  48. Sanjay says:

    Thank you for replying Karthik however can you please help me with any link where I can easily understand that how to make intelligent guesses, based on prior chart patters ?

  49. R. ELUMALAI says:

    I have two issues:-
    1) Can you provide the facility of automatically indicating open positions (using arrow symbol or a line) in both the Kite and the Pi Charts (I think this is available in Meta Trader and Sher Khan Platforms). We keep manually drawing Horizontal Lines to indicate the same, which is time consuming.
    2) Can you provide charting in Pi as available in Kite – In Pi chart the candles do not adjust there size (height) according to the chart area available as the chart keeps moving (due to new arrival of datas). It is most of the time seen as minute candles in Pi.
    2)

  50. Mukesh says:

    Hi Karthik Sir, why don’t you think about expanding the mobile/browser kite app as a desktop software and then completely phase out Pi? This will cut down your development cost at the same time it will provide a familiar environment to the users across multiple platform making it feel seemless

  51. R. ELUMALAI says:

    Can you provide the facility of automatically indicating open positions (using an arrow symbol or a green or red dotted lines for buy and sell positions correspondingly) in both the Kite and the Pi Charts (I think this is available in Meta Trader and Sher Khan Platforms). We keep manually drawing Horizontal Lines to indicate the same, which is time consuming, especially during intraday Trades where we have to be fast enough ?

  52. R. ELUMALAI says:

    In pi EA (Trade script) is there any command to read the price value of the existing position that we hold ? If not can you add the same ?

  53. shashank says:

    Do you have heikin ashi chart and stochistic rsi on your kite

  54. Shailesh says:

    Hi…
    I need some clarification regarding Renko charts.

    1. As per the definition, Renko charts do not consider time – they consider only value. In that case, Renko chart for a box size of, say, one rupee, should look the same for any time frame. That is not the case. You can check that from the following graphs.
    https://www.dropbox.com/sh/sim46jyvpawq4vg/AAB-RqyUUqJbQcfAbx-elkRka?dl=0

    2. Renko charts go back and forth for a few latest candles. i.e. they repaint. What is the logic in repainting? Is it related to timeframe? Also, if they are repainting, how can the chart be trusted?

    ~Shailesh

    • Karthik Rangappa says:

      Not really familiar with Renko, Shailesh. Not sure if I can comment on this.

    • Shakeel Hassan says:

      Repainting is due to time frame which you select. So please select the lowest time frame possible to avoid repainting.

    • Shakeel Hassan says:

      And for the renko size in different time frame, I think in kite or any other Indian platform, with change of the time frame, renko brick size also changes. You check it yourself if I am true. I’m not quite sure. And it may happen because of repainting also.

  55. vishwanath doijad says:

    respected madam ; i see your video in you tube please send me information about your zerodha site how this site open send me my whats app no. in hindi 8446424897

  56. Mayur says:

    Hi,
    A lot of time and efforts must have spent in to make such a simplicity rich content. I really appreciate those helping hands behind Varsity. Thank you guys for bringing this introductory yet rigorous trading manual(kind of) to the “Free World”.

    Mayur

  57. Shakeel Hassan says:

    Very informative??Your resources are always best. But it will be very helpful for us if you add wicks to the range bars, renko like ninjatrader or mt4. And my another wish is to see tick chart on zerodha kite or pi. Please reply me, if these are possible or if you have any plan to add them shortly. Thank you

    • Karthik Rangappa says:

      The lowest frequency for the charts is 1 minute, frankly, in my opinion, this is good enough for low-frequency intraday trading.

  58. Algernon DMello says:

    Does the length of the rectangle in a candlestick depict
    1. the magnitude difference in open and close price
    OR
    2. the number of trades made?

  59. vinoth says:

    Hi Zerodha,

    I am now user. While trading intraday many shares zerodha not giving margin at the same time some shares zerodha rejecting the order. but i am having more than the order money . Please explain what is going on ..

    ZM2972.

    Regards,
    Vinoth

    • Karthik Rangappa says:

      Some of the shares are not permitted for intraday trading as they are under ‘Trade 2 Trade’category. Stocks under T2T should be taken in for compulsory delivery.

  60. kariappa says:

    Hello, as I started using the chart, it was showing prices as well as volumes on the same chart, but I don’t know what happened, maybe by mistake, now it is not showing volumes which is very problematic and unconvenient. I have tried all the basic tools available at the chart’s top but nothing helped. Plz help in restoring the volume candles in the same price chart.

  61. Ashok says:

    Sir , today when i was doing check my SBI ipo .. when i saw that , chart was under maintenance. after then i again checked in the start night at 9.40 Pm , now chart showing very small candle against yesterday.. yesterday it was very nice.. but now in all time frame candles showing like almost renko chart. .. So please do it correct as yesterday.

  62. P.s.perumal says:

    The real body denotes what why the high and close price are looks like thin and why real body looks thinner

  63. sharat says:

    Hai Karthik,
    very useful for the beginners……..thanks a lot…..

    regards
    Sharat

  64. Anshul says:

    how do i sell shares held on cash and carry basis.
    i tried but the amount is not credited in my account

  65. Anshul says:

    What is the difference between “stop loss” and “stop loss market” ?

  66. Anjani Singh says:

    Please add information about:
    – Renko charts
    – Point and Figure
    – Heiken Ashi Charts, etc

    This will make this charts journey complete.

  67. Sugandha says:

    Hii Karthik

    Which chart should I use for Positional trading ( one to two months investment horizon )

  68. BIRENDRA GIRI says:

    Dear Sir.
    Requested you that please lets us confirm which suitable time we should enter for intraday…

  69. shahofblah says:

    >Also note, a long bodied candle depicts strong buying or selling activity. A short bodied candle depicts less trading activity and hence less price movement.

    I don’t get this. IMO candle length represents the net positive/negative info made accessible to the public over the course of a day which need not correspond to volume traded. If every market participant revises their valuation of a stock upwards by x over the course of the day, this fact will reflect in close = open + x but not have any bearing on market volume.
    It’s also possible that Open = Close but minute fluctuations in individual valuations caused lots of trading activity. Essentially the two are not correlated IMO.

    • Karthik Rangappa says:

      A long-bodied blue/green candle means that the buyers were willing to buy at any given price during the day, hence the long candle. Likewise, in a long red candle – sellers were willing to sell the stock/index at any given price.

  70. sunil says:

    Hi Karthik,
    Where can I get more information on Heikin Ashi chart style?

  71. Richie says:

    Hi Karthik – Had 2 queries:-
    1. If I want to place say 2 to 4 trades a week, my understanding is I should use 1 Day Candlestick (instead of 15 minute, 30 minutes or 1 week candlestick). Is that correct?

    2. You said that after entering a trade, we must not do anything until the target or stop loss is hit. But for how long should we wait if neither of the two are hit if we are trading based on TA?

    • Karthik Rangappa says:

      1) I’d suggest you use EOD charts
      2) Technically you should wait till either one is achieved, but if you are forced to withdraw, then maybe you can consider time-based SL.

  72. ajay says:

    Friends i m a beginer, so i want to know how add data box in kite platform in browser to see particular candle ohlc that already shown in pi platform.

  73. Pratik says:

    Dear sir, how to see NIFTY BANK-SPOT chart in zerodha kite? Or only NIFTY BANK FUTURE charts are available?

  74. Rajendra says:

    There is a website of Zerodha, I have visited earlier. I am not able to find it now.

    The Website is about the Technical Indicators used by the Zerodha. How they work, what they are used for and complete detail about it.

    Can anybody provide me the link to that website.

    Thanks.

  75. Muffadal Katheria says:

    Dear Karthik,
    Greetings for the day. Thanks for such great explanation.
    If I am looking for a BTST or a Short Term trade and willing to hold my position for few days, than for Single Candle Stick Patterns and Multiple Candle Stick patterns, I would be using data for a single day or last 2 or 3 days only.
    1. Please confirm if my understanding is correct ?
    2. When we say uptrend or downtrend, in my case as mentioned above, how many number of days should be considered for the stock to be in uptrend or downtrend ?

    Thanks in Advance.

    Regards,
    Muffadal

    • Karthik Rangappa says:

      1) Yes, however, I think 2-3 days data may not be sufficient, at least 1 week’s worth of data should be good enough
      2) Like I mentioned for previous query, look for at least 12-15 trading sessions worth of data

  76. BK says:

    Hi,
    In technical analysis chart, in 5min chart the figure shows one scenario and in 15 min it is different. As both are used for intraday , on which we should rely.

  77. ishtiaq says:

    please explain noise and information
    and how to discard noise

    • Karthik Rangappa says:

      Hmm, that would be very difficult 🙂

      Consider this – you are a part of the high school Whatsapp group with about 100 people in it – on a daily basis, you will receive tons of junk messages, like the ‘Good Morning’ messages. Most of such messages are a waste – just like noise. Once in a way, you get an important message, like maybe a message for a school reunion – this would be information. In the trading world, 1 min chart has tons of buy/sells without any meaningful change in price – this is noise. But there could be 1 or 2 trades, which brings in liquidity and influences the direction of the trade. This is information.

  78. Tushar Bhadouria says:

    i am not able to getting close price

  79. atul says:

    Hi,
    Please add Banknifty Spot chart to kite and Pi.

  80. Heer says:

    Excellent module. is real body of Japanese candle stick represents volume traded on that day?

  81. Pushpendra Chauhan says:

    Very informative and well explained data.But sir, can you please suggest me some video modules too for the better understanding of the movement.Thank you.

  82. Sandhya says:

    Superb Tutorial. Thanks for having the patience to write these and educate so many of us Karthik . Not an easy task to make it so simple . And it is free for all.
    No words to explain the good will. Thanks again

  83. Jayashree says:

    What is an ideal time frame to complete a trade if only Technical Analysis is being used? Is it a day or two or more like two weeks to a month?

    • Karthik Rangappa says:

      If you are using an MA-based system, then you can look at time frames like a month or two. If you are looking at patterns then it has to be short-term – like a week or so.

  84. ADITYA KUMAR JAIN says:

    I compare two charts on KIte (Nifty& Indiabulls hsg. Ltd.). But I don’t understand what is that % of Y-axis. Can you please, tell me how can I compare two charts on kite & what’s that %.

    • Karthik Rangappa says:

      Aditya, Y-axis is the price. You can click on ‘compare’ option below the symbol name in the chart. Additionally, you can click on display and select 4 or 2 chart options. Please note, these features are available on Kite 3.

  85. Meet Shah says:

    Hi Kartik Sir,
    After migrating into Kite 3.0, I am unable to open any charts
    While opening charts, I am facing a error:
    ChartIQ is not available on your computer

    Can you please help as to what may be the possible error

    Thanks
    Meet Shah

  86. ananth says:

    End of Day Chart Displays Only up to 03.29 PM Only.
    Last minute values are not being shown up. candle is forming from 3.29:01 to 3:29:60?

  87. suresh says:

    is there option to download contents in pdf?

  88. trader says:

    is range trading disadvantageous as compared to trend trading? i hear people saying to stay away from sideways markets but after having analysed many intraday charts of numerous stocks i find that when the stock goes into a sideways range the support and resistance level become more clearly defined. I agree that the reward will little as the stock will not move much but by trading multiple times going both long and short throughout the day it can be seen that the total gain is almost same as one trending move gain.. so why exactly do people say to not trade range markets even when the SR levels can be more clearly defined?

  89. Abhishek V says:

    Hello Karthik
    pl correct me, if i am wrong. I decide my intraday move from zerodha candlesticks and go for 1Day chart (located at bottom of char i choose 3M and then automatically 1D comes at top of the chart, which i believe is the 1 day chart). Now having seen this 1D chart i put my trade (long or short based on vol, cs patterns and other points from ta varsity) in the morning at 10pm. Then i do nothing for the whole day , i let either sl hit or target hit. By doing this i was getting continuous profit for the last 10 days. but for the last 3 days i am getting continuous losses. Whats wrong in my method, Pl guide.

    • Karthik Rangappa says:

      Abhishek, you will have to introspect on each trade and analyze what went right and what went wrong. I’m sure you will find your answers.

  90. Abhishek V says:

    morning 10am.

  91. Abhishek V says:

    You are right Karthik. After having thought for three days and seen various candlesticks I am beginning to understand the nuances of trading and the meaning of your words now. Entry, exit, stoploss, rentry, adjusting stoplosses all have meaning. it,s tough game really! Clarity of thought, quick right decision and a little bit of luck may improve chances of a trade in your favour , but there is no guarantee to success is all I have understood.

    • Karthik Rangappa says:

      You are absolutely right, Abhishek! Keep learning, this is the only good way to survive and successful in the markets 🙂

  92. Ankit Mittal says:

    In my Kite account, candle chart is not showing volume candles. Please help. I switched off by mistake

  93. Pradip says:

    How can i access your chart to my website is there any method or module?

  94. Shubham Verma says:

    When will I find Time series on charts on zerodha.. i mean tool of time series/time gaps?

  95. RUSHABH says:

    SIR CAN YOU EXPLAIN ME CANDLE STICK CHART IN REAL TIME

  96. hansaben says:

    Which time frame best in chart for intraday trading

  97. prakhar says:

    is it possible to get lower then one minute timeframe candlestick chart say 30 second or 15 seconds.
    also what is your opinion on tick charts. Are they really better then time charts.
    thank you

    • Karthik Rangappa says:

      No, not possible on Kite. But I personally think, the lower the time frame, the higher is the noise component.

  98. Gaurav says:

    Hi Karthik,

    first all I would like to say a big thank you from the bottom of my heart for this wonderful chapters. I m new to finance and I feel very comfortable after reading this. now my question to you is that what is “Mark to Market” with an example.

  99. ritesh says:

    dear sir,
    pls tell me what are the charges of ” Pi chart” uses.

  100. Bipin says:

    Hi Karthik! To begin with, I congratulate you on the simple language used for easy understanding of new comers like me.
    Request you to elaborate on the statement in this chapter

    ‘The data can either be information or noise. As a trader, you need to filter information from noise’.

    Also advise how do I draw trend lines on the daily charts while the market is in the session.

    Regards,
    Bipin

  101. S V Prasad says:

    Hi Karthik,
    Varsity is simply best. Also appreciate you and your team for explaining complex content in simply way to TA beginner like me.
    Regarding Candlight charts in kite, cannot it possible to highlight Spindle or Dojji on charts directly by software as indicators part of the chart.

    Regards,
    Prasad

  102. Dheeraj Prasad says:

    “filter information from noise” Please elaborate it in detail. I didn’t get this point.

    • Karthik Rangappa says:

      Frequent data like tick by tick data is noise (unless your system is designed to deal with it). In general, larger the time frame, the better is the quality of the signal (information).

      • Dheeraj Prasad says:

        Thanks Karthik… Got your points.. varsity really helping to understand stock market . I’ve just started reading it and found very helpful and easy to understand. I appreciate it.

        Best Regards.

  103. ANUJ ASATI says:

    As mentioned above long bodied candle depicts strong buying or selling activity. A short bodied candle depicts less trading activity and hence less price movement.
    What would you say about the length of the upper and lower shadow?

  104. d raj says:

    Can u please provide BUY and SELL order directly in the charts in Kite? I know it is there in Pi but there is some bug in it and its chart features are very cumbersome to use. So, Please provide the same in Kite as soon as possible.

  105. Vinothini says:

    hello Karthik,
    How do I access the daily chart i.e 10 min charts of a particular period or a particular date of the past?

  106. CHANDRA PRAKASH says:

    Hello Karthik
    Zerodha have a very good charting platform ie kite. Your team have done a great job. But there are some issues which need to be ractified. First issue I am facing is drawing/analysis disappeared next day after log in kite & Second issue – can we expect permanent order type in your platform (ie. we shall place a stoploss or buy order untill execution). This feature I think shall be very useful for working professional as well as regular trader.

  107. pratik says:

    sir, on kite i am not able to scroll charts by finger after turning off crosshair function. is there any new changes brought in kite?

  108. khan says:

    Hi ,
    okay i got to know reading of the chart and types , so now how i create this charts and trade by self decision ?

  109. Kiran says:

    Hi Karthik,
    Is there any intraday strategy which is 90percent accuracy or is there any training provided by someone or you

  110. Pragathi says:

    Sir, I had 2 doubts
    1. How will a bearish candle stick represent when close price and low price are same.
    2. Sir you mentioned about noise at the end sir please provide an example as to how to differentiate noise and information.

    • Karthik Rangappa says:

      1) It will result in something called as a gravestone doji
      2) If the frequency of data flow is high (like a tick chart or say 1-minute chart), then the data set can contain a lot of unnecessary noise and very little information.

  111. Hemant Kumar says:

    Hii Sir,
    1. How longer the real body show strong involvement of buyer or seller and it can be measured in numbers.
    2.Can we say higher real body means high votality and lower real body means less votality.
    3.What does indicate longer the upper/lower shadow and shorter the upper/lower shadow.

  112. Suvajit says:

    Hi Karthik,

    I have few queries and I have found your course very helpful at least to understand where I was wrong till now.

    1) I know you have explained about the S&R levels are very important and how to figure them out from a manual graphical study point of view. I see a lot of formulas to also calculate the S&R. Do you suggest using the formula to calculate the S&R or you would suggest to manually find them? Any suggestion on how to automate?
    I am trying to put them in an excel sheet for lil bit of automation. Hence asking this question.
    2) Can we take a call of Buy or Sell based on few combinations? Like Bullish Marubozu + VolumeUp or do we have to rely on complete pattern matching? I know this will come with experience however want to know your view.
    3) Sometimes I see although the MACD and RSI Suggest the reverse of what is happening in the market. Can we rely solely on these indicators?

    Thank you in advance for all your hard work.

    Suvajit

    • Karthik Rangappa says:

      1) I prefer the manual way to identify S&R
      2) Yes, these combinations in my opinion only increases the probability of a successful trade
      3) Nope, I’d not suggest that. I prefer to rely more on price action which is manifested in candlestick patterns.

  113. Alok says:

    Hi Karthik,

    I plotted 5 Days 1 Hour chart today (11 Feb 2019) in Kite and noticed that from 23rd Jan-4th Feb there are no candles..just some small horizontal lines. The market had fallen 750-800 points in 5 days and recovered back on 4th Feb. Also, those horizontal bars were also not spaced at 1 hour…is it an error or am i missing something! Kindly let me know..

    Thanks,
    Alok

  114. Gaurav Bajpai says:

    Hi Nithin,

    what’s the significance of random black candle in the colored bar chart?

  115. Marimuthu says:

    could you help me ,in my chart not view in the desktop terminal

  116. Upesh says:

    Can technical analysis be used for mutual fund NAV analysis?

  117. Leeladhar says:

    is Indicator Rsi stochatist and MACD available in Zerodha chart

  118. MANAS says:

    I want crude oil chart closing 1 HR basis, I mean 9:30 am to 10:30 am candle, again 10:30 to 11:30 am candle. IS is possible???

  119. Md Sohail says:

    Hi Karthik,

    Please make module on price action trading.. 😊😊

    Thanks!

  120. SATHYANARAYANAN RAMARAO says:

    can you please suggest further reading material for volume candles??
    thanks in advance

  121. Rohan Sawant says:

    What about candle volume chart? it has 5 types of candles.
    red-hollow, when the volume is green
    red-filled, when the volume is red,
    green-hollow, when the volume is green
    green-filled, when the volume is red
    and
    black

    what do the colours mean???

    • Karthik Rangappa says:

      Rohan, we have not discussed it here as I don’t really find any special advantage of candle volume chart over a regular candle chart with volume overlay.

  122. gk says:

    when continuous chart will be available for lower time frame
    when will it be available for cds?

    • Karthik Rangappa says:

      It is available for EQ and commodities for now. CDS is on the list of things, hopefully soon. Unfortunately cannot give a timeline on this.

  123. Karan Bhatt says:

    Wouldn’t line charts with different colors be a better technique to visualize this data?

    • Karthik Rangappa says:

      Line chart is limited to one field (close). Candlestick, on the other hand, helps you visualize all the 4 i.e open, high, low, and close.

  124. Sankar Ghosh says:

    Can you please elaborate what stoploss is?

    • Karthik Rangappa says:

      Sankar, imagine you’ve bought a stock at 100 with an expectation that it will hit 109. However, just to be safer you do not want to hold on to the stock if it starts going below 95. At 95 you want to sell the stock and book your loss. So 95 becomes your stop loss price.

  125. abhishek garg says:

    i am not able to understand the no.of candles which is in time frame chart

    • Karthik Rangappa says:

      The number of candles depends on the timeframe. For example, if you are looking daily chart for the last 5 days, then you will see 5 candles. If you are looking at 1hr intraday, then you will probably see 6 candles.

  126. MANIK PANDIT says:

    Dear Sir,
    I am really thankful to you as we can learn a lot from you. Same thing is being taught by other people charging a lot of money in the name of giving “certificate or diploma in share market” , “Fundamental analysis”, “Technical Analysis” etc. I don’t know what is the difference between the your contents and their contents. But I am sure that your “varsity contents” are very rich and qualitative. Is there any scope of getting any certificate or diploma from your end also ?

  127. Isha says:

    The readings are very simple and easy to understand. I really like the material, its worth reading. I follow the material for other topics as well.
    Thnx for such material!!

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