My Swing Trading :3 Indicator Method

Discussion in 'Technical Analysis' started by joy_verma, Apr 24, 2006.

  1. joy_verma

    joy_verma Member

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    Hi,
    For the past few days I have been seeing much controversy on forum about technical analysis . My opinion is that if you have your home work
    done, if you have confidence in yourself ,if you are diciplined, if you want
    to learn and succeed, You will develop your own methods and setups and
    execute them in your plan and then trade your plans. This way you will
    not rely on anyone Ashwani Gujaral Or anybody else.(I respect Ashwani as
    he is successful and disciplined trader)
    One of the hot scrip on forum has
    been PBA infra structure. I am Taking up this scrip for My Actual Method
    for swing Trade. I have simple method and I call it "3 indicator method".
    On the day when sensex went down to 11008, PBA infrastructure Made
    a low of 154 and a high of 167. I spotted this scrip on my chart and
    saw my setup giving a buy signal. some people would wait to buy it
    above 167 the last bar high but in that case my stoploss would be little
    far away at 154 and as I am bit agressive I decided to buy it at nextday
    at market opening.
    Next, I analysed my 3 indicator method. It is a simple
    method comprising slow stochastic, RSI, And MACD. I keep settings for
    stochastic as 5,3,3 for Rsi 9 and for MACD 5,34,5.
    Notice on PBA infrastructure that stochastic gave the first buy signal RSI
    gave second signal and Macd final confirmatory signal. the same is applied
    to sell the scrip when a sell signal is generated. I dont buy if this setup
    fails to give me buy signal howsoever attractive that scrip might be. In that
    event I search for next scrip. See the attched chart it gave me perfect
    settings to buy and I placed a buy order the next day at market open
    My buy order was executed at 160.25 with a stop at 154 which is just Rs. 6
    below 160. Had I bought above 167 my stop would have been Rs. 13 away
    from 154.
    Now in four days time the stock is up more than Rs. 20 and none
    of the Indicators have reached over bought region indicating that there is
    still much distance to be covered by the scrip on the up side.
    So this is my simple swing trading technique. In conclusion, if you do
    your home work properly and trade your technique you do not need the
    Famed technical experts to rely upon.
    So, this is my "3 indicator method for you". I am pretty certain that many
    of you will have your own methods and setups.
    Regards,
    vinay
     

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  2. vince

    vince Active Member

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    Way to go Joy, but do you always wait for confirmation from all the three musketeers you use.
     
  3. joy_verma

    joy_verma Member

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    Hi Vince,
    That's true. This method looks simple but is very effective.
    It is effective for the novice as well as for the experienced
    trader. It is not the simplicity of a system or complexity of
    a method which makes a good trader but the dicipline of
    a trader that makes him a successful trader. Give a good
    system to two traders and see different results .
    Regards,
    vinay
     
  4. srisara

    srisara Member

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    Joy,

    This method is one of the near perfect methods, which i am also employing...

    great that you put it in a beautiful way.

    I used standard MACD 12,26,9.

    great going my friend....

    Regards
    Satya
     
  5. joy_verma

    joy_verma Member

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    hi Satya,
    True. This is a good method. I have above the indicator settings
    to eliminate the time lag.
    Regards,
    vinay
     
  6. rpc

    rpc Active Member

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    Hi Joy
    A nice method for trading.
    "My buy order was executed at 160.25 with a stop at 154 which is just Rs. 6
    below 160. Had I bought above 167 my stop would have been Rs. 13 away
    from 154. "

    Pls advice how you arrive at stop loss
     

  7. joy_verma

    joy_verma Member

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    hi rpc,
    There are many ways to reach at stoploss but in the above case
    see chart . Therein you will see that when my setup was about to
    give buy signal there was a big candle on that day with the candle
    high price for the day at 167 and low price of 154 . this candle was
    the latest swing low . so on the day this candle occurred and the
    next day I got my buy signals , It is a standard method to buy
    above the previous bar high and keep a stop loss at the bar low.
    so the bar low was 154 and bar high was 167 . that is how we
    reach our stoploss and buy price.
    But incidently I have closed the
    above Swing trade around 190 a net profit of around 20%. that is
    because price had reacted from 199 and scrip went in pullback mode.
    So in swing trading we exit the trade at first sign of price weakness.
    therefore I booked profit and planning to enter on pullback. so a
    profit of 20% is not bad if it comes to you in a trade which lasted
    for 5 days only.
    Regards,
    vinay
     
  8. bharatk8

    bharatk8 Active Member

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    hi joy... liked your sharing spirit...
     
  9. VICKY_SEEKINGINR

    VICKY_SEEKINGINR Member

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    Thanks for sharing ur experience.
    INfo on slow stockchart is good.

    Thanks
     
  10. huineng

    huineng Member

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    Dear Vinay,
    While calculating the stochastics, if the closing price is less than the lowest low price we get into the minus symbol. Does it matter?
     
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