VAYDA BAJAAR NI CHAVI
Dhruv tare par achal nishani
Vayda Bazaar ni chavi
is a Gujarati handwritten book by Mr Kanti Parekh (fondly known as Kanti kaka), during early nineties. He was a disciple of Mahatma Gandhi as a freedom fighter at the age of 11. He developed interest in trading markets and started maintaining hand-drawn charts. Over his long jounrey of trading the markets, he discovered different price formations and named them as chavi which literally mean 'key' in Gujarati. There are different bullish and bearish price patterns explained in detail in the book along with stories of trading them.
This is an attempt to translate and explain his price formations in brief. Name of the patterns and other terminologies which are in Gujarati are kept the same.
General rules & key terms:
- Abhay (Vavo): Follow the stop
- Alobh (Lano): Book at least half when reward is three times the risk taken
- Avilamb (Khotbandho): Don't hesitate to book the loss
- Apramad (Navo saudo): Don't hesitate in taking the trade again, even at higher price
- Dhruv day: First day of a week (Usually Monday)
- Dhruv: Open price of first day of week
- Arundhati day: Last day of week (Normally Friday)
- Arundhati: Closing price of last day of week
1) GANGOTRI & GANGOTRI A
Gangotri (Bullish pattern)
- Never Buy below Dhruv
- Never Sell above Dhruv
- The trade gests activated if price crosses 3 steps above or below the required price level. One step is usually the spread of that scrip. (Spread during those days used to be huge. Looking at the charts in the book, general rule can be formed that one step is 0.50% - 1% of the stock price).
- Price is trading below previous swing bottom
- Closed lower during previous session
- It makes new low during the opening, but recovers later
- Closes above previous session's open or close, whichever is higher
The formation is bullish and indicate strength in the prices unless bottom of the pattern gets broken. Pattern is rarely seen on weekly or monthly charts but strong setup when it is found. Buy with stop placed at 3 steps below the bottom of the pattern.
Gangotri A (Bearish pattern)
- Price is trading above previous swing high
- Closed higher during previous session
- It makes new high during the opening, but falls again
- Closes below previous session's open or close, whichever is lower
Though sideways is quite possible to follow, it's a strong reversal formation.
2) HABES & AARIYA
This pattern is applied on weekly charts only
Habes (Bullish pattern)
- Previous week was bearish
- Price recovers during current week and closes higher
- Price manages to close above high price of previous week or closing price of earlier week, whichever is higher
It is a strong formation and indicate strength unless bottom of the pattern gets broken. Gangotri
when applied together becomes high probability setup that indicate higher prices.
Aariya (Bearish pattern)
- Previous week was bullish
- Price closes lower in the current week
- It manages to close below low price of previous week or closing price of earlier week, whichever is lower
Pattern remains valid unless top of the pattern gets broken. Gangotri A
when applied together form strong setup.
3) UCHCHALAN & PACHHADAT
If previous bottom is broken but price manages to recover and exceed the previous closing price, bullish uchchalan
formation gets applied. It gets formed as soon as price exceeds previous closing price by 3 steps during the current session and remain valid unless bottom of the pattern gets broken.
is a bearish formation that gets applied when previous top is breached but supply brings the price below previous close. It gets formed when price goes below previous closing price by 3 steps during the current session and remain valid unless price breaches top of the pattern.
The formation is applied on Dainik (Daily), Saptahik (Weekly) and Monthly time frames.
pattern indicate short term reaction
pattern indicate medium term change in trend
Monthly pattern indicate Long term change in the trend
If it occurs on weekly chart, the first target is the closing price of the previous week. Habes
when applied together, create strong case for longs. Aariya
indicate significant fall in prices.
If price forms new swing bottom during the day, but recovers and manages to close above the previous swing bottom, bullish swing uchchalan
pattern gets applied. If the day when price formed previous bottom was bearish, then price has to close above the closing price of that day.
If price marks new swing top during the day, but falls again and closes below the previous swing top, a bearish swing uchchalan
pattern gets applied. If the day when price formed the previous bottom was bullish, then price has to close below the closing price of that day.
and Habes / Aariya
when seen together results in rapid price action.
4) KICK & DIVE
Kick (Bullish pattern)
Dive (Bearish pattern)
- Trend is down and price has made new swing low during previous session that remained bearish
- Price opens near the bottom of previous session
- But closes above the closing price of the previous session
5) KUDKO & BHUSKO
Kudko (Bullish pattern)
- Trend is up and previous session is bullish when price has made new swing high
- Price opens near the top of the previous session
- But closes below the closing price of previous session
Bhusko (Bearish pattern)
- Price made new swing low during previous session in the downtrend
- It opens above the highest price of previous session and closes higher
- Price made new swing high during previous session in the uptrend
- It opens below the lowest price of previous session and closes lower
The formation is quite rare but strong. It indicates change of the trend and strength in the bottom (Kudko
) or top (Bhusko
) that has been formed. Kudko
when applied together become high probability setup.
In the uptrend, after marking new swing high during the day, if price forms low below previous session low but fails to close below closing price of that session, bullish Kalash
has been applied. It is a bullish continuation pattern that indicates weakness in the low that was marked during the day.
In the downtrend, after marking swing low during the day, if price marks high above previous session high but fails to close above closing price of that session, bearish Kalash
has been applied. It is a bearish continuation pattern that indicates weakness in the high that was marked during the current session.
- Trend is down and previous session is bearish
- Bottom of the current session is above the bottom price of previous session
- Low price of the current session is near or above closing price of previous session
The pattern gets applied when price moves 3 steps above the opening price of the day
- Trend is up and previous session is bullish
- Current session high is below the high price of previous session
- High price of the current session is near or below the previous session's closing price
The pattern gets applied when price moves 3 steps below the opening price of the day
If price makes new swing bottom in downtrend and closes at low price of the day, the Bullish Gulant
formation is applied. Price shouldn't have gapped down to qualify for this formation. Buy with the stop placed at 3 steps below the bottom price.
If price makes new swing high in the uptrend and closes at high price of the day, the Bearish Gulant
formation is applied. Price shouldn't have gapped up to qualify for this pattern and stop for bearish trades should be kept at 3 steps above the high price.
9) XD & XR
The top and bottom share price of any company on the day when it declares bonus or right issue, becomes important reference points for the future.
This pattern is applied to the fresh listings. Price when goes 3 steps above the listing day open price, it makes the stock Garbh bullish
. And when it goes 3 steps below the open, the stock becomes Garbh bearish
comes with an opportunity to trade.
If price trades 3 steps above Dhruv
in uptrend, buy with stop placed at low price of the day. If Dhruv
is above Arundhati
of last week, buy at opening price with stop placed at 3 steps below Arundhati
If price trades 3 steps below Dhruv
in downtrend, short with stop placed at high price of the day. If Dhruv
is below Arundhati
of last week, short at opening price with stop placed at 3 steps above Arundhati
12) TEJI TEER & MANDI TEER
Teji Teer (Bullish pattern)
If current session's low price is above previous session's high price and the session remain bullish, Teji Teer
pattern has been applied. Below is the formula to derive target when Teji teer
Teji Teer Bottom + ((Swing bottom + Tejii Teer Bottom) x 1.5) = Teji Teer Target
The size of gap should be added to top price of Teji teer
to arrive at breakout price. The close above the breakout price activates the target. If the session turns out to be bearish after forming the gap, Teji teer
pattern gets invalidated.
If current session high price remain below previous session's low price and the session remain bearish, the Mandi Teer
has been applied. Below is the calculation of target price:
Mandi Teer Top - ((Swing Top - Mandi Teer Top) x 1.5) = Mandi Teer Target
The size of gap should be deducted from bottom price of Mandi teer to arrive at breakout price. The close below the breakout price activates the target. If price closes higher after forming the gap, Mandi teer
formation gets failed.
The activation within 3 days leads to quick move with higher probability of target being achieved.
If price doesn't cross previous session high and don't even go below its bottom during the current session, it is called as Digmudh
session. Breakouts after 2-3 Digmudhs
indicate strong thrust.
If low price of current bullish session happens to be at closing price of previous session, Bullish Bottom Palanthi
formation is applied. If high price of current bearish session happens to be at closing price of previous session, Bearish Top Palanthi
formation is applied.
It is a strong reversal formation and indicate change of trend.
Whenever you get a move in favour, which is equal to the difference between swing top and swing bottom, profit should be booked. This is called Visamo
. It is experienced that the habit of taking Visamo
prove profitable over a period of time
16) Purna viram?
Below are the criteria for Bullish pattern
- Trend is down and price makes new swing low during the previous session
- Opening price of current session is above the swing low and forms the bullish day
- But close happens to be below closing price of the previous session
Below are the criteria for Bearish pattern
- Trend is up and price makes new swing high during the previous session
- Opening price of current session is below the swing high and forms the bearish day
- But close happens to be above closing price of the previous session
Question mark in the name of the pattern indicates confusion. There are signs of reversal but formation is relatively weak. Confirmation from some other pattern is required.
17) GANONI & GOFAN
If price doesn't breach the bottom of the previous session that was uchchalan
, the Bullish Ganoni
pattern is applied. Similarly, if price doesn't breach the top of the previous session that was pachhadat
, Bearish Gofan
pattern is applied.
It is a follow through formation to Uchchalan
18) VIJALI AND ZABKARO
After marking new swing bottom, if price forms Mandi teer
that immediately gets followed by Teji teer
, Bullish Zabkaro
pattern gets applied. Price can lead to test the previous swing high provided Teji teer
doesn't get failed within next 4 sessions.
Similarly, if after marking new swing top, price witnesses Teji teer
that immediately gets followed by Mandi teer
, it is known as Bearish Vijali
pattern. Price can test the previous swing bottom provided Mandi teer
doesn't get failed within next 4 sessions.
19) AAGE BADHO & PACHHA FARO
If Mandi gap
is filled on same or next day and session becomes 'very' bullish, it becomes a bullish continuation pattern Aage badho
. Very bullish is defined as, price closing above 70% of the entire session range.
Same way, if Teji gap
is filled on same or next day and session becomes 'very' bearish, it becomes bearish continuation pattern Pachha faro
. Very bearish is defined as, price closing below 70% of the entire session range.
20) TOOFAN AND AANDHI
Bullish Toofan pattern gets applied when price goes above previous multiple swing tops and session remains bullish. Similarly, if previous multiple swing bottoms are broken and price remain bearish, then Bearish Aandhi gets applied.
They are swing breakout formations but author must have seriously observed their importance and usefulness to give them such aggressive names.
21) VAVO AND LANO
In downtrend, when price opens below recent bottom but recovers eventually and session turns out to be bullish, the Bullish Vavo
pattern is applied. Same way when price open above recent high in the uptrend, but sessions turns out to be bearish, the Bearish Lano
pattern gets applied.
He writes, "Vavo e ketlu motu kanasalu thay chhe e avata divaso ma khabar padse
22) CHOTALI AND POTALI
This formation was meant for very short term and intraday traders. After breaking the swing bottom when price moves back above the bottom of the day by 3 steps then bullish chotali
pattern gets applied. Buy with stop placed at bottom of the day. Vice versa for bearish Potali
Given the availability of intraday software, data and dynamics of the market today, this formation have lost the relevance. Uchchalan, Pachhadat
or other formation on lower time frame charts are more applicable for short term trading.
All patterns are applicable on all time frames but not all of them may be equally relevant today. Though they are quite similar to candlestick formations, the rules of trading them along with swing high - lows makes it an effective swing trading strategy.
It is a mind blowing work considering the fact that Technical analysis was not so popular in India during the same time. If one knows Gujarati, the original work is a must read and strongly recommended to understand the formations in detail, and to know about a beautiful journey of a veteran trader. There are many things similar to what we know from candlestick and swing trading formations as well, but his experiences and consistent observation demonstrated by many hand-drawn charts and the story of trades that he narrates makes it a great read.
In TradePoint, scanners and back-testing of all these formations are available. We have also developed different filters on these formations and tested them on various time frames.
Written by Prashant Shah