journey of a trader

[oilman5]

You observe something from the above. Its not the problem with the stocks. Its a problem with you. Please stop trading. Go back to basis. Read books. Come back later. You can always make money. But, at least do your homework. Know what you are doing. Winning or Losing is not the question. They are part of the risk of trading. But, if you follow certain methodology, mentally prepared, follow specific money management, you have chance of reducing losses versus winnings. Even if you lose, at least you can take home that you gave your best shot. What I mean to say is, You Will Not Feel Like a Loser.

I suggested not to enter before it comes out of the trading range. You see couple of stocks discussed above. They have been stuck in trading range for 6 months to 1 year. What a waste of money's time. Rather, in this bull market, you need to find stocks like Pidilite which are nicely trending just like the market.

You might be wondering why I want all data chart. Before I trade a stock, I like to know its history. I always look at all the data. If there is noise in daily data, I look at weekly chart to get feel for the stock. Each stock is different like each of us. They display different patterns. By looking previous data, you can rationalize how they acted before. So, you can decide how its going to doing now.
You can take 3 approaches.
1) Don't predetermine the market. Let the market determine by its movement. This is what I mean

a. If the index is going up, the stocks are not doing the same, you should find less no of entries. Obviously, you will be trading less.
b. If the index is going up, the stocks are going down and you are getting stopped out. Isn't market telling you something.

2. If you are not confortable with the market (indicators are telling you or for whatever reasons), reduce the position size. Lets say your money management formula requires you to trade 200 shares. You would only trade 50% (or whatever) of the position, i.e., 100 shares. You can take this approach if you feel the market conditions are not ideal.

3. Your idea is not bad either. Nobody would penalize you for not trading. Atleast we know that for sure, you would not lose money by not trading.

But, just because something is going up doesn't mean it is going to come down pretty soon. I want to stress on "pretty soon". Thats the issue with the stock market. Anybody can predict whether some xyz stock will go up or down. The question is when? Time is the question. That is why peers suggest not to try to pick top or bottom of the stock. Trail your stops and let the market tell by its movement whether you need to be there or not.

Disclaimer: My suggestions are based on Trading versus Investing. Please take them at your own risk. Above all, as anything else, I feel trading is common sense. If you can make sense out of what I say, use my advise. If not, avoid
Read all charts....
I don't understand your question. Let me do the best I can.
When you start looking at these charts, it looks foreign at first. You read books. Understand various terms. Continue to read charts. You will go through several phases. That is the reason, I suggested it would take 2 to 10 years to be really good. All along, you will learn something every day.

Each day, you will become better trader. But, the question is, do you have interest. There are several ways to make money. Some do job, business etc etc. We can opt for the one which gives us lot of money. But, if that line is not of interest, can you continue year after year. So, I suggest you to ask yourself if stocks are of interest to you. If it is, then spend time and eventually you will get it.

Its like byke/car driving. At first, it is so hard. You tend to observe everything. Once you get a hang of it, you don't even think about it. Some part of brain automatically takes care of it. Same thing with charts.

But, reading charts is just the beginning. I don't think you want me to go through the whole process now. You will find more info in the earlier part of this thread.
Read all charts....
I don't understand your question. Let me do the best I can.
When you start looking at these charts, it looks foreign at first. You read books. Understand various terms. Continue to read charts. You will go through several phases. That is the reason, I suggested it would take 2 to 10 years to be really good. All along, you will learn something every day.

Each day, you will become better trader. But, the question is, do you have interest. There are several ways to make money. Some do job, business etc etc. We can opt for the one which gives us lot of money. But, if that line is not of interest, can you continue year after year. So, I suggest you to ask yourself if stocks are of interest to you. If it is, then spend time and eventually you will get it.

Its like byke/car driving. At first, it is so hard. You tend to observe everything. Once you get a hang of it, you don't even think about it. Some part of brain automatically takes care of it. Same thing with charts.

But, reading charts is just the beginning. I don't think you want me to go through the whole process now. You will find more info in the earlier part of this thread.
Read all charts....
I don't understand your question. Let me do the best I can.
When you start looking at these charts, it looks foreign at first. You read books. Understand various terms. Continue to read charts. You will go through several phases. That is the reason, I suggested it would take 2 to 10 years to be really good. All along, you will learn something every day.

Each day, you will become better trader. But, the question is, do you have interest. There are several ways to make money. Some do job, business etc etc. We can opt for the one which gives us lot of money. But, if that line is not of interest, can you continue year after year. So, I suggest you to ask yourself if stocks are of interest to you. If it is, then spend time and eventually you will get it.

Its like byke/car driving. At first, it is so hard. You tend to observe everything. Once you get a hang of it, you don't even think about it. Some part of brain automatically takes care of it. Same thing with charts.

But, reading charts is just the beginning. I don't think you want me to go through the whole process now. You will find more info in the earlier part of this thread.

 

[oilman5]

hey we are now learning from vvonteru
.......................................................
Pattern: Acceleration and Persistent Pullback
previous movement was 5 to 10). This means, the stock is accelerating.
2. The new trend is parabolic. I some how feel it is not sustainable. You know, feelings and hope have no value in stock market.
3. The new trend is giving only 1 day pull back. But, don't use Friday's pull back to enter. Let another day pass by to have at least high of the day below previous high. See for example, on March 28. Enter with a buy stop above high (stop = today's high + 4).
4. What I like about this stock is, when going down, its volume was low. Going up, volume is high. It picked up good volume on the new trend.
5. Please check the sector. I couldn't find it. Once you know the sector, check the chart of the index (in BSE) to be trending and this stock is comparable to the sector. I gave the link to look at the sector and index charts in the
People who read my thread might be considering me crazy when I ask them to wait for pullback. This is the reason. When you buy at top, you feel uneasy when the stock is below your mark. Its like going to the market and buying something at high price, when you know you can wait for day or two and get it at low price. Please practice to wait. Sooner or later we need this behaviour.
Right now, don't panic. I don't know how much did you calculate for stop loss. I suggest you put sell stop under previous base, which is 200. Hopefully, it will continue with the new up trend.

For All
I want you guys to look at the nifty chart. Look at the volume when going down versus going up. Just an observation

what price you entered. That way, my analysis would be to the point and useful to you. If not, I am shooting in the dark.

All I can tell you is the probability of stock going up or down. We just trail the stop. If the stock goes up, our stop goes up. We do that as far as stock goes. We don't care how far up the stock goes. In the mean time, we do take partial profits to generate income to our account

like to be counted in the short term to intermediate trader group. My hold can be from 1 day to a week to a month to a year(s). At the same time, I don't believe in buy and hold philosophy. I don't buy a stock and think, ok, let me wake up after 1/2/3/4/5 years, the stock is waiting for you to take profits.

My Methodology?
Basic underlying pattern is pullback. The question is after what scenario the pullback is of interest to me? I can give you one scenario which is useful in the current market. 52 week high and pullback. Ofcourse, clean chart with a trending stock.
When I enter, I never enter directly in to stock. I enter with a buy stop above the yesterday's high (given that there was a pullback). The value above the high depends on the stock price and volatility. Once I enter, I determine my risk and initial profit target. I keep them same amount value. The risk depends on the stock price or chart pattern.

Once the profit hits, I sell 50% and move the risk stop to where I bought. At this point, I am breakeven and will be playing with table's (read other's) money. As the stock goes up, I move the stop. When, I do this, I don't move the stop close to the current price. I use bases to move the stop up, giving lot of room to the stock. This should be ok since we are already in the profit. Our goal should be to get the max out of the stock. Therefore, you choose not to micromanage at this point. So, thats the reason, I am more of a intermediate player.

Book the profits ...
In most cases, I don't sell all the shares directly. I sell in chunks when there is huge movement in the stock. For example, from the above you know I will sell 50% when the initial profit hits. Then, on further movement, if I decide that the stock has run good enough, I may sell 10 to 20%. I trail the remaining 30% with a stop. This may continue.

Another question ---- it is a bull market. Will we get such clean charts at bear market?
In a bear market (why do you think about it? Really!! Are you missing it already), you will have to go by sectors. What I mean is, there will still be some sectors which will trend. So, you will choose those (At this point, you would also short). In the worst case scenario (Lets say, if the market is in trading range, which is no no for us who believe in trend is your friend philosophy), you will choose sectors that trade independent of the market. For example, metals and oils. I hope bear market is long way to go.

Voltas
I do like the chart. But, looks like it is going through some minor correction due to change in gears, which....
however one can be assured of the underlying fact that a clean chart with good volumes fairly indicates strong fundamentals-----

Thats the whole point. A price of the stock already contains the fundamental information (somebody has done the homework for us. Remember, we want to make money easy way.) + what people speculate its future value is. Since there is speculation for future and future is not predictable, stock's price is adjusted once the future is known ( + again the future speculation). This goes on.

In the book, Market Wizards : Interviews with Top Traders (Paperback)
by Jack D. Schwager, famous trader, Ed Seykota says, "Fundamentals are Fun For Mentals". I woudn't go so far. No matter what methodology you use, as long as you follow it in all your trades (no exceptions) and use sound money management, you can make money. Simply put, do the following for success:
1. Control Your Mind (don't feel left out and jump into a trade. Think before you trade).
2. Select a methodology that suits you and you believe in. Use it for all the trades.
3. Have a sound money management so that you are in the game in spite of loses. No one loss should take you out of the market.


SO IT IS UPTO 10 PAGE...WHAT A GREAT WRITER..[ WRITTEN 100 PAGE]

OILMAN5

 

[oilman5]

so further i try to learn from VVONTERU
......................................................[PAGE11]

Before we delve into anything below, I want to touch on the market in general. Please avoid new positions for now. We will have to adopt wait and see approach with the market. Stick to the stops you have (for traders). Don't move them as the market approaches your stops. Elder calls them losers, who move stops down.

can u tell me how to use volume. i am actually stuck on this.
what is "overhead supply", good volumes(relative to what), iilquid stocks etc.
is volume also subjective to the time frame v are seeing
--- As I mentioned before, price and volume are the most important elements to look for in the market. Everything else (indicators) are there to remove the daily noise and see clearly what is happening (with crowd behaviour). For example, SMAs, EMAs, MACD etc.

Overhead Supply
--- Lets pick a stock that is beaten down (say its current price is 50% of its high). Some part of the crowd thinks this stock is at value. They think this stock was 100 3 months back, now its 50. They say its cheap. What they are forgetting is a group of people who bought all the way from 50 to 100 3 months back. This group is called Overhead Supply. This group is just waiting badly for the stock to go up so that they can dump (sell) theirs. Elder gives a perfect common sense example for these kind of stocks. Think about 2 scenarios.
Scenario 1: Falling down 3 stairs. U just wipe your butt off and there you go.
Sceanrio 2: Falling down 10 stairs. U will first check whether you can breath. Then check whether hands and legs are fine. Then look for people to help you (sector action). Then try to get up. You will fall down. This repeats couple of times. Finally (assuming that you didn't end up in hospital with broken hands/legs/ribs), you will get up.

From our perspective, these kind of stocks have a lesser probability to make you money (from Buying point of view) than a stock which has just made 52 week high and has no overhead resistance. Just like water, stocks go the path of least/no resistance.

good volumes(relative to what), iilquid stocks etc.
is volume also subjective to
volume also subjective to the time frame v are seeing
--- When you see a chart of a stock (picked for more review. Please look at my previous reply), you look at the complete data (for all years and different time frames). You will look what happened to the price of the stock. Similarly, u will look at the volume and indicator Average Volume (to remove noise/sudden spikes in a day). When they say "good volumes", what them mean is price action supported by increase/decrease in volume (average volume). That there is really a demand/no demand for this stock.
--- Average volume can help to filter low volume stocks. Low volume stocks are hard to liquidate (sell) your positions. U will put a sell order and no one is there to buy. This means, you will have to reduce your price and then try again. This results in high volatility of the stock and lot of gaps. U need to pick stocks that have good (based on Ur confortability) average volume. That do not have lot of gaps (they result in lot of difference in buy vs. ask price). Stock elimination is as important as stock selection. When in doubt, leave it.
--- Volume Time Frame: Definitly. Lets say a stock's volume has gone up last 2 days. When we see that, our immeadiate thought is, something is going on. Why are people interested? How about 5 days volume spike. There is really something going on. How about 3 weeks. 3 months? 6 months? As the time frame increases, your confidence on the price action supported by volume data increases. You will trust the price action better.

may I buy Facor alloy now at 2.60/?
No. Don't go after low priced stocks. They can be easily played by market makers. They suck you in.

Also give some word about National steel and agro.
I don't like the charts for new entry. Are U are already in? If you are, trail the stop below previous base.
If the market goes down, individual stocks are nothing. Doesn't mean you should reliquish your position. Because, we don't know whether the market is going to continue the downward path tomorrow. Stick with the stops. Let the market determine its next step

No matter what I say below, I suggest No Entry to any of stocks. Wait for the market to show the direction. It is still in the break down mode.

JPAssociates
-- Pullback has stretched into the short term trading range below. Let this condition improve. I think this is true for most of the stocks (look at Wipro). These conditions will improve when the market improves.

Day Trading (Volume, MA, Medium Liquid Stocks, Price Movement Manipulation)
-- Please read my earlier reply(s) on day trading. In day trading you need the following to excel:

1. Avoid looking at too many things. You will have very less reaction time and attention span. More on this in the next few points.

2. Have a tool which can execute orders fast. Don't have some thing which takes you to another page for confirmation and then executes the order. Those are good for End of day trading.

3. Bargain for low commissions on day trading. You need low commissions because U will be trading a lot as U will get lot more signals in day trading.

4. Determine before hand (before sesson starts) what stocks you will day trade. Use volume, beta (volatility) of the stocks as the criteria as the selection. You need high volume, medium price, medium to high beta stocks. Further, determine what direction these stocks have chance of trading. U do that looking at EOD data on a daily chart using EMAs. I talked about it in previous emails. Also, look at the charts I am attaching. U will have an idea. Basically, what I am saying is, U need to decide whether to go long or short before hand for a stock.

5. Restrict to only 2 stocks for watch list. If you don't see any movement for couple of hours, then start looking at another 2 stocks. Not at any point of time you will be looking at more than 2 stocks. Try to restrict looking at 10 stocks in general. That way, Ur mind will get tuned with their price movements. After a while, U will know them more and your actions will get aligned with their movements.

6. Avoid looking at 1 minute chart in a day chart. Its close to imposible to make decisions on 1 minute chart because of noise.

. Now, coming to what indicators you will be using.

a. Look at 5 day chart. I don't know whether you have the tool which shows 5 days of data. In this, use 1 minute time frame. I know U are confused at this point based on what I said on point 6. But, here we are looking at 5 day chart. Read next how this makes a difference.

b. U will be using EMA(8) min and EMA(50) min. Since we are using 5 day chart instead of 1 day chart, this effects the EMA calculation. They will take out the noise.

c. U will be using MACD with line and Histogram (atleast histogram). Again, hopefully Ur tool has these.

8. Methodology (I tried to avoid revealing this info. in earlier replies. I was tempted though). My friend will kill me if he knows I am revealing this info. But, its ok. I am not doing it any more.
Hope, you will make money of it. Hey, atleast can you keep this a secret? (Ya right!!! ).

a. As in EOD trading, we need enter and exit points that make you money. But, unline EOD trading, you have less time to make decisions and there is lot of volatility. So, you need clarity.

b. We will be using crossovers for this. When 8 min EMA crosses above 50 min EMA, you buy. Similarly, if 8 min EMA crosses down 50 min EMA, you will sell short. When the ema crosses over, wait for pull back (pull up in case of short). Patience!Patience! Patience! before triggering. It is better to avoid then do it wrong. Crossover is Ur ultimate test

. If you want to be 80 % correct, then U will confirm the crossover using 5 min timeframe on 5 day chart. Remember, it will take some time for the crossover to appear on 5 minute chart after it appears on 1 minute chart. What this may mean is that you will enter at higher (lower for short) point than you would do using 1 minute chart. But, it will avoid false crossovers. So, you might make less money, but U will make consistently. 1 minute chart can be used to help you get ready for upcoming crossover.

d. MACD histogram is also helpfull for confirmation. Lines above the 0 bar means bullish. Below bearish (I know U know). So, when 8 crosses above 50, we are going from bear to bull. See whether it is happening in MACD for confirmation.

e. So, I have talked above about entry. How about exit. As in my EOD trading, U need adopt immediate 50% profit booking methodology. When U enter, U immediatly decide at what price the reverse crossover is going to happen (approximatly). This is your stop point.

f. If the stock moves in your direction, U should take 50% profits and move the stop where U entered for break even. Without this U will not survive. Because, in a day, the stocks show lot of noise. What goes up in the morning, comes down in the evening. U will be left withnothing on your plate, inspite of your hardword. U need income to continue for next day, just like people working in office do. Final exit will come when the reverse crossover happens.

9. In order to make money in day trading, U have to be a perfect person. U should not have fear or greed (applies to EOD too). You have to follow methodology to the core. No exceptions. Believe me, this is going to be hard. U will get greedy once U start seeing the money flowing.

10. Never trade when U are tired. Day trading will suck lot of your energy. If you are tired, take a break. Further, if you have lost a lot of money (% of capital), don't trade for couple of weeks.

Price Manipulation
-- This is a given thing. We can restrict it by picking stocks that have good average volume, medium price and no gaps in price movement. If you want to know price manipulation, read The stock operator book, biography of Jesse Livermore.
I have mentioned to use only Price, EMA, Volume, MACD, Williams indicators. Just read them on line in investopedia.com.

sudden increase in vol at particular price ,intraday.
--- Stocks behave like us. Why? because WE operate them. An WE are made up of same stuff and think a like for most of the cases. So, when we put a stop, WE all tend to put it at same point. Same for buy, sell decisions. As a result, there are lot of orders waiting to be executed at a same point. As a result, you will see lot of volatility with high volume at some price points. For EOD traders, when you put a stop, place couple of points high/low than what you think should be to avoid being stopped out.
--- Other scenario is, when you place stops, the market makers can see them. For low volume stocks, then can manipulate for a moment and hit your stop and come back (it will if there is no demand at the point). That is the reason you will see this huge bars in daily charts.
--- Another scenario is gapping down at the beginning of the day. If you carry stops overnight to next day, the market makers in the early morning gap the stock down, hit your stop. Since, there is no demand at the stop point, the stock goes back to previous day's trading region.
--- Having said the above, don't get paranoid from EOD trading stand point of view. It would be great if you don't carry stops overnight. Specially, if the stop is close to the current price. If the stop is far, it will be hard to manipulate. If you don't have time to do it, that should be fine too. The chances of occuring are low that you can disregard.
--- For day trading perspective, disregard volume info. You cannot do anything with volume in a day. Understand this. With all the TA, we are trying to read crowd behaviour on an average basis. You cannot make a valid judgement based on spike in volume in intraday. So, leave the volume info.

Also, yr comments reg Bse stocks,ICSA(531524) & Ankur drugs,both from investment point of view & intra day trading.
---ICSA, couldn't take out previous resistance at 750. So, should wait for it move up above this point.
---Ankur drugs, its been trading range between 120 and 160 for more than a year. Avoid.
---For
will pass for now. Look for stocks having min. average volumes 3,00,000. More the volume the better.

stopped out of ITC, Hindalco, GE Shipping, SSI, ICICI Bank, Rolta, and Wockhardt.......At what levels do you suggest that I should re-enter?
---We have to wait for the market to improve. Individual stocks improvement will come automatically. Right now all the stocks are breaking down. I will attach ITC chart.

For Day Traders:
--- Practice acquiring high Will Power. The crowd pull will be very high. The magnetic force is 100 times more than for EOD traders.
--- Don't count the money. Count the no. of times you used the methodology (crossover) to enter. Try to get this 100%. Money will flow as an after thought.
what do you think about Infosys now that the results are out and bonus announced? What are the probable scenarios?...
---Our basis is TA. So, disregard the news for all purposes. Are U saying why?
1. The news is already discounted in most cases. We are at the end of the food chain. Before we know, so many people already know about it. The rupee value of the news at the point we know is negligible.
2. Have you ever observed the stock movement opposite to the news. The stock goes down inspite of good news. The stock goes up when the news is bad. This is because of expectations or for unknown reasons. But, observe this. The movement in most cases happen in the direction of the trend.

So, the lesson is, don't use news as the reason for trading signals. You signals should be entirely based on your methodology. No exceptions. Even if you know U can make money easily if U can make 1 time exception. U should not.

Money (greed) should not drive your signals. Your methodology should. This is required for your long term survival. U should come into this market thinking that U will be there for long time to come. You should accumulate money slowly. Do you know how many get busted in the 1st year? Do you know why? Greed!!!!!
you can't define cheap in stock prices. Wait for the market to become better. We will have lot of entries. Wait!!. Waiting is the most importing part of trading in stocks. You have to wait like cheetah waits for its prey. It doesn't pounce until it is certain. We have to do the same.
Picture speaks thousand words. Wait till we see better picture. If you are already in and not stopped out, I will give it a chance

 

[yara]

Excellent writing by almost all members but key point is............to apply them in your real trading life..!trading/investment is an art and not a layman's job in my feeling,take them as an art but not make them your habit and see the difference in your profit!Good luck.

 

[oilman5]

learning from vvonteru
...............................ref p14
i don't want to short this market.
---I don't think any body should. Its long way for us. But, for somebody who don't know what shorting is or is sceptic on the whole idea of shorting (oh they say, there is no limit on the upside before covering), I recommend looking into it.

I wait till 3200, start looking for picks and make the positions by 3100-3070, i.e if i get the prices. At this level what will be the stop loss?, on Nifty or Sensex.
-- I personally feel that should be it. 3200 is 50 day support. 3200 is the previous pullback support after the gap on March 9th or 10th. But, as I said in earlier posts, feelings have no value. Our attitude should be, 'let the market make the next step. I will look at it and place my next step. I would not reveal my step before the market's'. Having said that, it is a nice idea to think through the various support and resistance levels and what U are going to do. Isn't this like a chess game!!

Ideally, you want the market to test the support successfully. "Successfully" is the key. We want the market to test the support, pull up and pull back but not go below the support. When it pullsback, thats when you would enter above the pullback. Ofcourse, I am talking about my methodology.

I think on the upper side i can do the same if markets sustain 3425 on closing. plz gide me if 3425 is the correct level

---Looks like you are expecting it to go above 8 or 10 day EMA. That would be nice too. But, I will wait for "Successful" test to happen. This will eliminate false breakouts and daily noise. My methodology doesn't trust breakouts. Too much money is lost in false breakouts.

1. Is it suitable for a beginner like me to get into this book?
---Oh Ya. I am your example. Why are wasting time. Just delve into it. You will never stop.
gain. Give the methodology a chance. If it works in a time span, you keep it. From time to time, U can tune it to suit Urself or based on market changes. More important, U should like it, should make sense to you and therefore U believe in it.

What about balance of Reliance? Shall i sell these as well 'cos market is going down or shall I place a Stop Loss? Is s/loss of 829 suitable?
---As we don't know whether the market is going down, we don't know whether the market is not going up. We just know that the conditions are not ideal for new stock entries. So, the existing entries should be dealt with stop loss. Let the market determine its next move. If it goes down, it will hit your stop loss. If it goes up, do we have a problem?

I would keep the stop at 783 (where U bought. Now U have booked 50% profits and have no loss no gain on the remaining shares i.e., breakeven). Let the next base clear up. When the stock moves up from this base, I will move the stop to 815. This is how I do on every stock. If you put the stop at 829, U are just asking for it. A daily noise can take it out. If you are unconfortable or feel you are going to lose money, take more partial profits. Its all about how you feel about the position. But, don't change how U put the stops.
Market: It was a nice come back. Lets wait for the follow through.


So can we say that the Key here is an unsuccessful attempt to breach the support levels, after a breakout?
--- Ya. We are looking for a pull back. We want to make sure that pull back does not go back to previous point from where the breakout has happened. If it does, they call it a false breakout.

Print the 6 month chart (if you can), put it on the floor. Standing, look at the chart and see where is safer to put the stop. Thats the test. Don't go into details. If we micromanage, we will lose the longer play. Our objective is to get the max out of the trade.

I have said earlier, we shouldn't prejudge the market. Thats the reason, we shouldn't come out of existing positions. The reason is, there is always be noise. That shouldn't change our existing plans. But, for new plans (entries), we definitly want to see better conditions.

With 1 day upside, the market has changed the charts. I now feel, probably, the previous downside was a deeper pullback. This can happen intermediate to several smaller pullbacks. From our perspective, can we take new entries considering the market was a pullback
for short and longer term ...
Please explain what U mean by these terms. If you are losing badly would U keep in long term case? Or if you are making money, U will sell because U thought it was short term!! I don't believe in short term or long term. I look at a stock's chart. If its good and has an entry point I enter. I give it a chance with a stop loss. If it hits, I come out. I can't take the pain thinking this is long term. Similarly, if its winning, I ain't stupid to come out.
Tracking 5 to 10 stocks:
For beginners that should be it. Just track them. Wait for pullback and enter. Don't go around 100s of them. U go around and comeback, these 10 are gone (Isn't there a saying One rabbit in your hand is better than 10 around the bush). Once U get hang of it, I suggest use a scanner to program patterns U like the stocks to exhibit. Once U get the result of the scanner, U should be able to judge based on the charts.
don't remember changing much. I modified the EMAs to use 8, 50, 200. Added another window (Shift + F12) to use MACD. Added another Window to use Williams. Added Volume as overlay to Price (Unfortunately, it doesn't show up in the zoomed version). If U want, you can play with the color settings using Indicator Settings menu.

Formula: 3 month high and pull back
highest_close[5] = highest_close[65] AND M_PriceFalls
>=2 and Close > 100 and MAVOL > 100000

U can tweek the nos to include/exclude subset of stocks.
Considering the market (All sectors except Metals and Oils) putting up Double top, try not to take new positions for a day or 2, till we have a better idea.
Sensex 12000, Nifty 3573 ... what now? What do the charts tell?
--- Nothing definite. Sometimes thats what it is. We definitly don't want to take new positions. The indexes have been rallying straight 4 days (+ Friday even though it was a down day, indexes did not give much back). The parobolic move suggests, there might be some pull back pretty soon.

Looks like too many people are expecting a correction. Too much bearishness makes the market bullish. If it doesn't come down pretty soon, all the people who got stopped out recently and sitting in the sidelines waiting for the correction will jump back. This may lead to even more parabolic move in the indexes.

Sectors:
MIDCAP & SMLCAP & AUTO : Still have double top
IT : came down from double top ( WIPRO, SATYAMCOMP, TCS, INFOSYSTCH )
OILGAS: 1 day pull back after acceleration. Hopefully, we will find entries in this pretty soon.
METALS: we need it to come down more.
BANKS: forget this sector till it comes out of the trading range

Maintain your existing positions inspite of people advocating correction. That talk should only deter U from entering into new positions. In not ideal conditions, if you want to go in, reduce Ur position size to 50% or 25%. Some of the good runs what we discussed recently are Reliance, Morarealty. ITC is looking more like a double top. Mcdowell-N was stopped out and was set yesterday for a short (I did/will not advise though at this time).
Lesson: Stocks give you at least 1 chance to get out (in my observation). Lets say you did not honour Ur stop (I don't want U to do that). The stock will give you another chance to get out. But, in most cases, we don't get out. We get greedy and think there will be follow through. My suggestion to you guys is, when in doubt, execute 25% or 50% of position, either on the sell side or buy side. Atleast U will not be 100% wrong. Don't try to get every thing right. Don't be hard on Urself. Accept the fact that there will be mistakes made (even if U are a pro) and we will learn from them.
My suggestion to U is, if at any time a position makes U tense from being Urself, that means the position size was not right with respect to the stop loss (this comes under money management issue). So, ask yourself what position size would make you confortable if a loss happens. Once U know, reduce the position.
U could have shorted using MACD divergence. Look at MACD histogram bullishness for each of the peaks. At the last peak, MACD went negative. That shows that as new each new high was being made, the stock had lesser strength. An short entry point over here has higher risk as well as higher reward.

A higher probability trade would be using First Thrust Pattern. After making a new high, the stock falls down more than 10% and pulls up. Right now, its still falling down after making 52 week high. Wait for it to pull up. Also, note the 50day EMA. Many people buy at 50 day EMA. So, it would be nice if the stock goes below 50 EMA and then pulls up.
About shorting, at this time, understand the general market momentum is upside. In this kind of market even cats and dogs jump. Shorts have less probability of making U money compared to Longs. So, avoid going shorting at this time.

 

[oilman5]

further we r learning from VVONTERU[ A TRADING GENIOUS]
..................................................................................
It has good chart. I came out from major trading range and has momentum. It is testing 50 day EMA. Stocks do that after a run up. I don't know how U want to play this. Normally, I would wait for it successfully test 50 day, pull up and pull back. I would enter above pull back. When I say Normally, in those cases, stocks take around 10 days to touch the 50 day EMA. In this case, its just 4 days. U can consider it just a pull back and enter at 93. Have stop below 50 EMA around 83.

Stock Entry: Above previous day's high (high + x) where x is based on stock price and volatility
U should always enter into a trade above previous day's high. Why, just look at all the stocks suggested yesterday. Look at Bajaj Auto. I suggested entry at 3000 above previous day's high (2989). Since, there was no up tick, our entry was not triggered. Using this technique, U can avoid some good trades that turn into bad ones. They call it, No Ticky No Tacky.

The downside to this is that U may enter high of the day. But, going so far, taking out previous day's high, the stock showed its potential of turning back from pull back.

Count the no. of day's its been down continuously. Total 10 days. In the last 11 days, only 1 day was an up day. I remember recently reviewing this stock for a short. At that time, the stock was still in the trend. In the last 2 days, the trend line has been broken. Today was the nail in the coffin. All the guys on the upside are caught now. They never had a chance to get out. They are waiting to get out. What they need is couple of updays. That is when we enter for short. They will give us the impetus for the next leg down.

I currently do not scan for the stocks under this pattern (First Thrust). The market does not support the shorts. The only way we can make an exception is if the sector would setup as short. Lets follow this stock and Siemens

Market:
Considering that it still is a pull back, lets look at some stocks. In case the market goes down another day, we have to reconsider. It might be in trading range or correction (I doubt).

This is a good scanner U can use. Lets see what we want based on the market.

1. 52 Week high
2. 3 days lower
3. Price between(User specified, in Indian Rupees(Rs.)) 100 - 5000
4. 10 day simple moving average above 20 day sma Yes
5. 20 day simple moving average above 50 day sma Yes
6. 50 day simple moving average above 200 day sma Yes
7. Volume between(User specified, in 10000 multiples) 10 - 100000

Other Indicators I would Play with:
1. Price Changes
2. Price closed above 10/20 day moving averag (instead of crossovers)
3. Volume changes
4. MACD
5. Support Resistance levels
Siemens ended above the neck line. When I say test the neck line, I am expecting a pull up. U don't want to short when it is going down. It is already down. Whom are going to sell (short) it too? So, we need couple of up days. Right now, it is above neck line. Lets wait for another day to see if it is just noise. But, why are U bent upon shorting. The market is shooting up. Why don't U go Long. I will recommend some.
Hopefully, you are not asking this question for argument sake. Because, I am not interested. We are here to make money. My trading philosophy (as I stressed in most of my replies) is that no methodology is wrong or right. You test it in the real market and you make money, then use it. Thats your edge. Every body should find their own edge (what they can do their best) and use it repeatedly (this is the key).

What I meant about the statement is, make trading simple. When you start trading initially, we come to the market with some pre-concieved notions. That you can easily make money and fast (read greedy). When you don't, you think people who are making money know something you don't know. They are using indicators and waves etc etc which you are not using. Thats the reason you are losing money. If you didn't have this thought, thats fine. I am talking in general.

Then you go after reading books, using new indicator for every new trade, change methodology etc etc. In the mean while, your portfolio still doesn't improve. I have done this like anybody else. Ultimatly, what I found is that, trading is just common sense. It is using probability to make your chances of winning high. Accepting the fact that there will be losses and it is the business risk. That winnings are going to compensate your losses and make you profits.

In essence, don't try hard. When you see the chart, it gives most (80%, to give a value) of the information. The remaining 20% may not relevant in most cases. So, why work hard going after that 20%. Since, you are leaving 20% (or whatever info) you may get some losses. But, assuming that you are following your methodology to the core, the losses may be minimal compared the effort you are not putting. Just make life easier. Don't spend more than couple of seconds (max 1 min) looking at a chart. Within that time, if you like it, study more like
1. Look at all the data (Ofcource, 1st thing you want to make sure is the overall index is doing good). Check it fits your methodology (this was the reason you picked this stock for detailed review)
2. Look at the sector
3. Check whether your position in this stock fits your money manangement plan
4. Make a go or not go decision.

Having said the above, nobody is stopping you from researching. You can continue to do that. I decided I am not going to do it. Its just personal. I found my edge and my final truth ( I spent my time before). I will just stick to it.

hi...do not get paranoid...that question was asked to have insight into your mindset............i request u not to be judgemental....................................... .......as book of ELDER was recommended by u,I asked the question to know whether that idea had any application,it can not be called "research".....don't u think that u should have answered it in straight forward way


NO NEW ENTRY means, I am suggesting to all readers that I do not approve these stocks for new positions. Based on my analysis, I don't want somebody to think (based on stops) I am suggesting to buy them. Now, if U have already took positions in these stocks, there are couple of options.
1. Exit for profit if the stock chart is really bad.
2. Gracefully exit for no loss no profit.
3. Give a stop for last chance for the stock to make it.

U know, it is easier to read charts that are good than the bad ones. All these charts, I wouldn't spare a millisecond (infact thats the test). Now, trying to understand them and make meaning out of them is hard.

About my suggestions, right now, I am not recommending any new entries because of market and sector conditions. I will post it when market conditions improve.

 

[oilman5]

here we further learn from VVONTERU..P28
........................................

NO NEW ENTRY means, I am suggesting to all readers that I do not approve these stocks for new positions. Based on my analysis, I don't want somebody to think (based on stops) I am suggesting to buy them. Now, if U have already took positions in these stocks, there are couple of options.
1. Exit for profit if the stock chart is really bad.
2. Gracefully exit for no loss no profit.
3. Give a stop for last chance for the stock to make it.

My expertise is not with low priced stocks. Please see the chart attached. A triangle has formed. A decision soon will come, up or down. We can keep this stock if it goes up (no brainer). If it goes down, how far will it go down (already 35). The stock has to be evaluated based on fundamentals more than technicals. How about asking the guy who suggested you this stock
The time has come. It broke out. Wait for pull back, which will not go back to the trading range. What I don't like is the volume using which the breakout has happened. I couldn't find the sector. It is considered in sector All. I also don't like the general market condition to suggest a new entry. But, U asked for the RCVL. Here it
start with how stock prices go up or down. This is due to the demand for buy or sell. Lets take an example of RCVL. This has broken out of the trading range recently and closed at 320.60. If no demand exists for buying above 320.60 (no buy orders above 320.60) and sell orders exist below 320.60, the stock price will come down. I think so far U already know.

Now imagine some good news comes for RCVL. There are lots of traders who buy on news. They jump on news and put in buy orders. Most of them give market orders (they don't want to miss the action). The market makers (MM, who execute all the buy and sell orders in our behalf) see so many buy orders for RCVL and increase the buy price. Since these are market orders, they get executed no matter what the price is. Lets say more buy orders come in. MM see this as an opportunity and increase the price (On the intra day chart, U will observe a long open and close tick). They will push it so high till a point where no demand exists. Once U have this scenario, open a daily chart. The tick on that will have huge high (tail) low range. What we should read from the tick is that there is no demand at this high point and go for a short next day. Elder talks about the levels and stops for doing this. Similar is the case when the stock goes down.

Now, identifying the Kangaroo Tail is tricky (infact, I used to argue with my friend all the time. He used to look at some volatility on a day and say, there goes the kangaroo), just like using any indicators. Huge range can be there on any day. But, Kangaroo tail only applies on extremes. For example, when stock on a bad news is going down. After several days of sell of, U see a huge down bar, now thats a Kangaroo Tail. Why, because, the stock has been going down so low and at some point the MM tried to sell the last bit and found no orders to sell below that point. Similar is the case of upside.

I don't think that applies in this scenario (ofcourse its my opinion). The stock should have been going down or up for lot of days. This should typically happen because of an event (which will determine this sharp break up or down). If the stock has been going flat, I don't know how much this applies. The pattern is more based on
Any way, I don't trade on this pattern. Not that U can't make money on it. It doesn't fit into my methodology of pull backs.

Market is still in trading range. Avoid new entries for now till the market successfully comes out of the trading range

This stock is below 50 day EMA. 200 day EMA acted as support. Let it cross above 50 day EMA and then pull back. A safer bet would be after crossing 950 Resistance
did not look at all the indexes before. Here is the good news on other indexes. Most of the indexes broke out of the trading ranges. Lets see what are those.

BSE100
BSE200
BSE500 (This is better index to trust than SENSEX, which has just 30 stocks)
BSEHC
AUTO
BANKEX
OILGAS
METALS (Was not in trading range. But, really going good)
MIDCAP
SMLCAP

Still in bad condition
IT

Now what? Ideally, we would want the indexes to go up and pull back (not going back to trading range). Thats when we enter. However, if U are a aggressive player and want to go in now, consider stocks that are already in pull back and check if U can safely enter those without a wider stop loss.
did not look at all the indexes before. Here is the good news on other indexes. Most of the indexes broke out of the trading ranges. Lets see what are those.

BSE100
BSE200
BSE500 (This is better index to trust than SENSEX, which has just 30 stocks)
BSEHC
AUTO
BANKEX
OILGAS
METALS (Was not in trading range. But, really going good)
MIDCAP
SMLCAP

Still in bad condition
IT

Now what? Ideally, we would want the indexes to go up and pull back (not going back to trading range). Thats when we enter. However, if U are a aggressive player and want to go in now, consider stocks that are already in pull back and check if U can safely enter those without a wider stop loss.
U know what, I thought the same when I saw that. The question is how do we take advantage of that. We need to scan for that pattern. But, as I said earlier, I don't whether this is a high probability trade. What is the chance the sector of the stock doing the same. And what about the market in general. We need to have criteria for stock selection that mimics the General Market. The general market is all time high. Pick stocks that are comparable to the market. Be in a sector that is going along with the market. If not, U will end up with lot of stocks to trade. Which one do U take.

Stock selection (elimination) is the greatest challenge, once U gain knowledge of TA. Because, once U run a scan, U will get lot stocks in result. Which one U go for finally?
That is the reason, I suggested for it come below 5500 for a short. Now a new pattern is emerging. Wait for MACD crossover and then look for pull back to enter long.
previously mentioned negative about banks. They are breaking out decisively. Since they were in trading range for some time, hopefully, this is going to be good rally. Lets watch couple of bank stocks that are going along with the Index.
got a lot of stocks in the scan. I like most of them for entries. I am not suggesting any. I am waiting for the market to pull back. But, if U want to take it, here is the list. I like the metals. The index has been down 2 days and looks good for entry.

......to be contd

 

[oilman5]

further i learn from VVONTERU...P31
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Trend line is OK. Is it a buy based on MACD crossover? It depends. If you always buy on MACD crossover, then probably OK. For buying, MACD crossover itself is not enough. The cross over happens so many times. However, in this case, the signal applies.

For me, MACD cross over and histogram gives information about the goodness of a stock trend. After that, I wait for pull back. Pull back is the ultimate pattern for me to enter. Reason, I don't want to enter when the stock is going up. If I do, my stop loss will be far. And when people start taking profits, I will feel uncertain, unconfortable the stock getting close to my stop.
When U say entry after pull back,is it a different method other than trading the channels?
Also when we consider stop loss, Elder indicates a formula,considering Average down side penetrations.Can we adopt it as a main method of placing stops?
Again for taking profits,in Ur earlier charts U indicated booking 50% profits almost the same way towards the treand as to the stop loss.
Please give some details on these
FYI
In general, market goes in 3 stages.
1. Value of market < Fundamentals. At this point, nobody really cares about the stock market.
2. Value of market = Fundamentals. People start observing. Still no talk.
3. Value of market > Fundamentals. Speculation Stage. Everybody knows. Wherever U go, there is a talk. Any one U talk is in the market. Every body is dreaming of lots of money.

If U think something is over valued and not participate, U will miss lot of action. My philosophy is, not to prejudge the market. Let the market tell by its price action. That is the reason, stick with Ur stops. If cement stocks are going down, Ur stop will hit.

Currently, how many people predicted correction in the market (I was effected by that talk too). Every Tom Dick and Harry was expecting correction. I was talking to my brother-in-law who doesn't know ABCD of stocks. He was talking about correction. What happened? No correction. It is so much better not to heed to the news. Just observe the price action. If the price action gives the signal (based on Ur methodology) to buy, go ahead.

from you. Earlier, correction would occur or stay during 1-2 or 2-3 months period, where the sensex would go down by say 200-300 points. Now, these few days we have seen lot of volatility. Somedays the sensex would go down by 100-200-300-490 points. Till here I am right. Isnt it?

Then cant we say that this was a correction? Is it necessary for Correction to usually take a period of 1-2 or 2-3 months? Cant it occur during a single day?

Correction:
A loss of 7 to 10% can be regarded as correction. This can happen in 5 to 10 days. There after, the market or stock can continue to lose points or start a new trend. From our point of view, we need to avoid new positions, take profits and trail stops for existing positions. We just need to differentiate between normal profit taking verses sell off.

Good analysis. Thats what my objective was. To provide a list. Then, we all analyze it. Come up with the best, that we agree upon. If we don't agree, we have a choice. Either go for it or skip it, feeling there is a reason not to. As I said always, when in doubt (even an iota), leave it. Its like leaving a ball while batting in cricket. Just choose the best one to hit. Leave the bad balls.

On Ur analysis, I see about the jump. It made almost doubled in the matter of a month. Can it sustain. Probably not. Will it be in a trading range? Based on the pattern, looks like it has more chances for it to be in a trading range. The current pattern looks different. It has lot more momentum then previously. It made 100% jump. However, as I said before, can it sustain? May not. So, lets skip it.
The chart looks good. The stock is in overbought condition. Wait for pull back to enter.
Stock Entries:
The market has been up 7 days in a row. Still waiting for a pull back. If we go in, we will be entering at overbought condition. If we don't go in, we might miss the move. Do we? I was looking at my previous scans. Most of them are still in pull back mode. Thats the surprising part. Stocks are pulling back. But, the indexes are up. Only Metal index is in kind of pull back mode. Banking index is 1 day down. On further pull back, we can look at couple of bank stocks identified before. I have 2 metal stocks for entry. To be on conservative side, U can avoid entries in other sector stocks.

Hindustan Zinc Lmtd - I like this better. I am putting the stop Rs170 more. I don't want the noise to get it. I would get out on a loss of Rs 100 (Rs970). But, there should be atleast 2 decisive ticks. Use discretion on the stop based on Ur confortability
purposely did that. Yesterday's tick did not have a lower low. So, I wanted it to test day before yesterday's tick. U can go with yesterday' low. There is no right or wrong. It is just that if U think nothing has happening (no profit taking effect) with the current day's tick, U buy above previous day's tick.

I didn't get the data feed for current day. I see on the web that it has lost some points. We need to take a look at it as well as the index. I will have another post on it.

Others
-- I will get back to U.

Quickly on some stocks I already know/was looking at them in the scan.
RCVL - This is good stock to enter. I was looking for it to pull back a little more for entry. So, far no, just like the market. But, if it does pull back, I will strongly recommend this stock. About long term (if that means, U don't care what it does in the next 30 days), I will recommend this stock to enter. I am getting interested in new issues. Ofcourse, those have to be trending. I remember see some in my scan. I will look at it again.

Market moved a little bit. Based on its action, it looks close to its pull back. Can never predict though. Again, we have an option to sit out and manage existing positions. If U want to trade, metals are still in pull back mode. Banks appear as pull back. If U want to enter any stocks, I have a list.

Previous day's entry on Hindustan Zinc still holds good. Adjust the entry point. I was look at some stocks which are cheap. Below Rs100. I got 1, attaching the chart. I advise caution when U buy cheap stocks. They are prone to manipulation. Why I like Litaka Pharamacy?
1. It has good volume, which will make manipulation hard.
2. It has a nice trend with a pull back.
3. It had a opening gap reversal today.

 

[oilman5]

vvonteru's knowledge p36
.. I was waiting for pull back. It happened. I am expecting at least another day, given the upside we had. Whether we have it or not, its another question. We will adopt having an entry buy above yesterday's high. If the market goes up, we are in. If not, on a further pull back, we reduce our entry point. Thats what we are going to do with RCVL.

3) Let me know whether the Stock Entries I suggest are useful and U are taking them. If not, I am wasting time. I will rather spend time answer the questions about stocks. Let me know.

4) On stocks I am following
--RCVL pulled back further. I wanted it happen. Its prime for entry. I will be happy if we have another day of pull back in RCVL
................................. know something, I thought U were asking for buying now. I just saw U are asking for hold or exit. I don't know why U want to exit. When U enter new issues, U should like the company and its business. I don't think anything has changed in the last 2 weeks that U should exit. I don't know where U entered. Logically, I would suggest to put a stop at 16. But, rather, I would put a stop at 10, to avoid the stop getting hit in the noise. In fact, I suggest not to put stops for these low price stocks. If U do, U are asking for them to get hit. Moving a cheap stock down is not hard for market makers.
It is in the first day of pull back. There may be 1 or more pull backs. U have to sit tight. This should be a lesson for U not to catch something which is going up. Wait for pull back. I know it is hard to see something flying and U are not part of it. The waiting is hard part. But, what is other option. U buy at high point, see the stock going down and U are very uneasy about it. Ur stop will be too far now. U are looking at 1000 or to be safe at 950
numeric power system
-- Crossed previous resistance of 420. It is pulling back mode now. After another day of pull back (hopefully today), U can buy it above day's high + x.
BILT is Ballarpur Industries and its NSE code is BILT.
---This goes in a channel. The low end of the channel is the 50 day ema. When it touches 50 day ema, buy it. Upper end of the channel is the upper bollinger band. If U choose, U should sell it over here.
some order/pattern in the chart. Why? The chart shows data about thinking of people. U want to put Ur money on a stock which attracts like minded orderly people. So that we can predict some event (stock going up/down) with a degree of confidence (Do U remember probability in Math). For example, lets look at 2 charts:
1. Jai Prakash Associates
2. elgi thread
Let me know what U think. Where would U put Ur money. Which one will U trust more. Which one U can say confidently its going to go up or down.

Normally, U will look at a chart on an average couple of seconds. If U like it, write it down for further analysis. Don't force a position on a stock. If the chart is not good or chart is good but it is in over bought condition, skip the stock
It is a bull market with high valuations. There is lot of volatility. Combined with it, there are Market Makers who look at your close stops. They move the stock, touch your stop and go back (since there is no demand to sell further or there is high demand to buy at that point). So, when you put Ur stops, U have to consider:
1. Volatility of the stock. How much it can go down in a day. High - Low.
2. Whether the risk will fit your money management plan or Ur confirtability. The stock may be good for entry. But, if the stop has to be far, move on to the next one.

The reason I have the stop far than it should be is to avoid getting hit due to daily volatility. When I say 2 ticks, I am trying say, the stock should really go down. Not thru manipulation. However, if U can't look at the stock in day time, i.e., hands of approach, give actual stop. In this case, something below 500.

Triangle Pattern
--- I already have it in the chart. By, explosive, I mean, the base is not formed. Normally, the base is formed and tip is not formed. At the end of the tip, the stock has to make a decision to go up or down. In this case, the end of the current pattern comes when the stock no longer is forming the base of the triange.
Can you please tell me if TFCILTD has formed a double bottom?. Is it safe to enter now?.
Scrip - Tourism finance corporation of india
Code - TFCILTD.NS
-- Avoid the stock. Still in downtrend. Draw a line joining points 24, 20, 17. Further, avoid cherry picking in the current market. I don't know whether U read about my anology of falling from steps. If U have not, here it is.

Imagine U have fallen from 10 steps. U are trying to recover. U are about to get up. But, U see this gush of wind in the proportion of cyclone. Can U guess what will happen to U. Will U get up or fall down. If U do fall down, how long will it take to get up again after that hit.

The reason I gave U that analogy is, the market had a bad hit today. It has come back to the previous trading range. This is bad. When market loses so many points, these beaten down stocks get killed more. At this point, its just not this stock, avoid entries to all stocks. I will cover this further below.


Market Commentary:
When it had 2 days pull back, I thought, this is what I wanted on Friday night. But, looking at world markets, I had a bad feeling on Sunday evening. But, I did give benefit of doubt to Indian Bull Market. I can't say I was not surprised the way it happened. At this point, lets adopt wait and see approach for couple of days to get better understanding what today's price action means. Hopefully, 50 day EMA will act as support for Nifty and Sensex. If U have existing positions, take partial profits or/and trail Ur stops to make Urself comfortable. Avoid new entries for now.

About the positions I suggested with entries and stops:
RCVL, Reliance, Hindustan Zinc and fedder Llyod did not hit the buy point. So, we are saved by the bell. This stresses the importance of not buying directly into a stock. Try to buy at a point where U feel the stock really has scope for turning back. This is called, 'No Ticky, No Tacky'. Its like saying to the stock, 'If U don't perform, U will not get rewarded with my money'. Ofcourse, there will be times, where Ur buy point will be hit and then the stock comes down. Didn't I say in my previous reply that there is no full (fool) proof method. We just do the best.

Originally Posted by rahulg77
Hi VV,

Agreed our buy point did not hit so we will reduce our buy point. now our buy point will be if tomm it goes above todays hi. If the correction continues will we keep reducing our buy point like this? what if the indicators turn negative or it goes below previous pivot low...do we wait for it to make an uptrend again or we still buy knowing that the pull back was cause of overall market and not stock specific. also we buy above the previous high during same trading day or it should close above the previous high.

Rgds
Rahul

When U decide to buy a stock (based on a tip or scan), Ur analysis starts with the market indexes. U will do the following.
1. Look at BSE500 (Look at others too: BSE200, BSE100, BSE30-sensex)
2. Look at Nifty
3. Identify industry and sector of the stock. Sometimes, U will not be able to get the charts for these. There are BSE indexes for some sectors. Look at chart of the sector.

Our objective in looking at overall indexes and sector is to get a feel for the market conditions. We are trying to understand how all the traders are thinking.

Based on the above reading, if U feel the conditions are good, then compare the stock U want to buy with the sector. The stock should be comparable to the sector. Then U will make a buy or no buy decision.

I know the process feels long. But, thats what I call principles/methodology. It should be a repeatable process. Then, U can evaluate the results with some certainty. Try to take out degree of guessing, affected by greed and fear. Avoid gambling.
we still buy knowing that the pull back was cause of overall market and not stock specific.

When a Tree (market) falls down, what happens to the branches (sectors) and the leaves (stocks)? Hope I answered Ur question.


Quote:
also we buy above the previous high during same trading day or it should close above the previous high.

Looking at the pull back in the evening, determine Ur entry point based on our strategy. On the trading day (next day), if the buy point is reached, enter. The buying point does not have to be previous day's high + x. If U look at the charts I have given previously, U will notice that in some cases, it was couple of days back high + x. It all depends on the change happened in a day and the volatility of the stock. U will get that with experience.

So, looking at the current market conditions, I am adopting a wait and see approach for next few days. If the market indexes improve from these current levels, we will look at new setups. For tomorrow, I suggest no entries

 

[oilman5]

Please use discretion on stops based on confirtability and money management plan.

--------------------------------------------------------------------------------For All:
Remember, We can always make money. But, never make adjustments on how We do business. What I mean is, never move stops. If we do and lose money, we are not just losing money. we will lose confidence. This will affect the outcome of decisions on other positions.
Here I am writing
…………………….
Trade element…….

1] you…..swot …..time to learn..your natural patience…time u have..
BELIVE IN REALITY ,NO WISHFUL THINKING
2] market…your believe on market…
your ta tool mastery
your fa tool mastery
info network

3] fund to learn and experiment..
play less analysis more..use diary..
many help available @traderji.com

4] PSYCHOLOGY
read…book of dr elder..
market wizard series
mark doglous
ari kiev
Livermore

5] personality……& trade analysis

dr van tharp
dr bill William
larry William
Linda
Mark boucher
Dave landy
RAKESH JUNJUNWALA

6] trade system design
………………………..
Bernstein
Kaufman
Tusher chande..
Martin pring
Technical trade system
Instant profit

7] individual choice
bird watching in lions country
phantom of pit
personal software…metastock & omnitrader

8] trading style…its an individual choice

9] recent experiment….

Dynamic trading..and trend dynamics

10] encyclopedia of chart pattern
candle stick chart study

11] most useful concept
……………………………..
money management
risk control

12] yet to learn
……………………
volatility
optimum stop….

FUTURE DREAM
……………………..
A PROFESSIONAL TRADER AFTER 3 YR


EXPERIMENTAL TA..

1] TREND AND NON TREND BOTH EXIST IN MARKET

2] RANDOM NESS HAS ITS ROLE…
ITS AFTER BREAKING OF RANDOMNESS TREND STARTS

WHEN TREND TERMINATES…ITS DIFFICULT TO PREDICT…

3] PRICE PREDICTION AND STOP GIVES OBJECTIVITY
HOWEVER.. BASED ON WHAT PRICE TELLING U MUST EXECUTE

CONTROL OVER MIND MOST IMP.

4] SCANNING TOOL…PORTFOLIO CONCEPT HELPFUL

hope u enjoy this view..
this view r personal and suits me
.............................................
oilman5


oilman5