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Compositedge E-learning- Butterfly spreads

Butterfly spread strategies are a combination of a bull and bear spread, effectively making it a low-cost neutral strategy. The strategy typically comprises of a combination of three strike prices using a combination of either calls or puts having the same expiry with limited risk and profit potential. Butterfly spreads are categorized into two types
Long butterfly- Generally used if you’re anticipating prices of the underlying to remain in a narrow range until the expiry of the contract.

Compositedge E-learning- Renko charts

The Renko chart is a kind of aggregation chart developed by the Japanese using price movements while ignoring time and volume. Renko is taken from the Japanese word “Renga” meaning bricks which is typically represented in the way the chart looks. There may be a few features in the chart type which are very similar to some of the other aggregation chart types like the Point and Figure and Heikin-Ashi, however, a deeper understanding points to quite a few differences.

Compositedge E-learning- Heikin-Ashi charts

If you’re familiar with candlestick charting, at the outlook you may find Heikin-Ashi charts visually indistinguishable from candlestick charts. That’s because they’re an offshoot of the Japanese charts with a few modifications resulting in noise filtration in the latter, thereby assisting in capturing the trend of a security in a much more robust fashion and giving them a smoother look. The basic setup of the two charts such as up-down bars, time frames, colouring method etc. are very similar, however, there are a few differences in the way the two charts are plotted and analysed.

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