Beginner's Orientation- Sharing Experiences On Technical Analysis Two Day Seminar

Traderji · #11 15th July 2004, 02:05 PM

Trailing Stop Loss

A trailing stop-loss order is a stoploss order in which the stop loss price is set at some fixed percentage below the current market price.

If the market price rises, the stop loss price rises proportionately, but if the stock price falls, the stop loss price doesn't change.

This robust stoploss technique allows an investor to set a limit on the maximum possible loss without setting a limit on the maximum possible gain, and without requiring paying attention to the investment on an ongoing basis.

The trailing stop-loss order is continually adjusted based on market volatility and trend always keeps at a certain distance to the market price.

I personally use the TradersEdgeIndia.com trend trading indicator as a trailing stoploss indicator for all my trades.

Please see attached chart of how I was able to hold on to my long position in an uncertain market condition.

As can seen on the chart the magenta coloured dotted line is a trailing stoploss and it trails the stock at a distance moving only in the direction of the profitable trend.

This stoploss either only moves up or sideways to help you lock in as much profits as possible.

vsparikh · #12 21st July 2004, 12:15 AM

The best way to success to trading is to maintain the record of earlier trades, in order to judge your successes and failures. This would in turn crystalise the reasons for your successes and failures, right and wrong decisions.
With the analytical tools at your help, one should keep up to the targeted strategy, without fear and greed. The TA tools always achieve the targets at 95-99% success. It is experienced that in most occassions, the "time target" is either delayed by few days or results earlier.

sh50 · #13 21st July 2004, 07:45 PM

Nice to get in touch with somebody so optimistic, Mr Parikh. I have been led to believe that failure rates among traders is quite high.

This is HSSHAH from Delhi. Kem Cho?

I know somebody who has delivery of several shares and funds as well. He tries to do intra-day trading during the day. If required he gives delivery when required and has the funds to take delivery if he is not in a position to square off. Though aware of Technicals, he uses his gut instict and is a good trader. I suppose Technical analysis should be helful in a situation like this. He says that his complaint with Technicals is that everybody says that one should work at this or that level(Support/Resistance). What about the opportunities that arise till then? Can you wait for a breakout, crossover,overbought/oversold? What about the inbetween opportunities? ANy comments, traderji. One can work in a trading market as well but supposing the market is neither trading nor trending. Is that possible?

The second question also pertains to intra-day-trading which is deemed toughest unanimously. Once you get your bearings in Technical Analysis, isn't intra-day trading the best from a purely learning perspective considering the number of transactions involved. One would ofcourse do small transactions. End of day trading can make anybody go of to sleep. Intrday though tough would be baptism by fire. Any comments, traderji?

Traderji · #14 22nd July 2004, 08:21 AM

My experience over the many years of trading has proved to me that security price changes or movements are primarily random with a small trend component.

This fact is extremely important to those desiring to pursue day trading in a rational, scientific manner. It means that any attempt to trade short-term patterns and methods not based on trend are doomed to failure. It also explains why day trading is so difficult.

The shorter the time frame (day trading), the smaller the trend component.

Novice traders get lured to day trading because the price patterns on intra-day charts are similiar to the price patterns on long term charts. This similarity in chart appearance convinces novice traders that they can day trade successfully with the same tools they use on longer-term charts.

However, the trend-following tools and indicators that work in intermediate to long-term time frames won't work in day trading. This is because the trend component is so very small during the day that it is very unlikely for a novice day trader to make enough profits to overcome the costs of day trading.

In longer-term trading, you can let your profits run. In day trading you can only let your profits run to the end of the day. Thus your average profit per trade is much smaller.

Also, your costs of trading--slippage, the bid/asked spread and mistakes--stay roughly the same on a per trade basis. Thus, your day trading system must be much more consistent and robust to stay ahead of the costs of trading than would an intermediate to long-term system.

Remember that market price action is mostly random and the tendency of most markets to trend is the only possible edge in trading!

To be successful in trading one must use methods that exploit the non-random feature of market price action.

The trend component is certainly are not present every day. That is why the person who tries to day trade at least once every day, and perhaps even more often, is doomed to failure. The more often you day trade, the more likely it is that you will be a long-term loser.

sh50 · #15 22nd July 2004, 08:21 PM

Thanks very much. You have guided extremely well. Day trading is indeed very risky but purely from a learning perspective, if one were to do small quantities, is it not faster than end of the day trading where one has to wait endlessly for crossovers/breakouts.

If you have the funds and the delivery, can't one turn intra day to one's advantage after reasonable mastery over it. What I mean is that if you short sell and the market goes up you can give delivery and pick it up later. If you buy and the market goes down instead of squaring you take delivery. I have seen people do this without any analysis and make money. Can't the intra day charts be there for decision making.

Traderji · #16 22nd July 2004, 08:29 PM

There is nothing better than the experience and knowledge one can gain from real trading with one's own money.

If you want to try a strategy then one should go ahead and test it out!

VRAM · #17 25th July 2004, 05:09 PM

Is there anybody who makes profit purely thru intra day trading every day and consistently? I am yet to come across such a person. Every body says it is the toughest job. Does it mean that there are no single successful guy who is intra day trading and making a living out of it? Or are there successful peoply but wont reveal the secret? I am perplexed.

Neal · #18 25th July 2004, 06:39 PM

I am sure a stockbroker or somebody working for one can answer your question since most of them have daytraders as their main source of income!

hmp · #19 13th March 2005, 11:14 AM

Quote:

Originally Posted by Traderji

There is nothing better than the experience and knowledge one can gain from real trading with one's own money.

If you want to try a strategy then one should go ahead and test it out!

SIR,
WHAT ARE THE STRATEGIES. PLEASE EXPLAIN.
REGARDS
HMP.

Traderji · #20 13th March 2005, 01:01 PM

Quote:

Originally Posted by hmp

SIR,
WHAT ARE THE STRATEGIES. PLEASE EXPLAIN.
REGARDS
HMP.

You can get started by reading about The Guppy Multiple Moving Average

Similar Threads for: Beginner's Orientation- Sharing Experiences On Technical Analysis Two Day Seminar
Thread	Thread Starter	Forum	Replies	Last Post
Good Technical Analysis Sites For Beginners	sh50	Technical Analysis	31	12th February 2008 05:44 PM
Technical Analysis Software - Key points fo consider	andy	Software	10	26th January 2008 06:38 AM
What is Technical Analysis?	TATrader	Technical Analysis	7	24th December 2007 06:03 PM
Recommended Books on Technical Analysis	Traderji	Books	40	6th September 2007 01:21 AM
Technical Analysis - Moving Averages	MasterTrader	Technical Analysis	10	26th July 2005 12:21 PM