NOW I SHALL GIVE HIDDEN TRUTH ON MARKET SUBTELITY IN THE LIGHT OF LAST POST
expectation factor/ma study as suitable smoothing is helpful[50dma certainly guide idea of intermediate term].....u have to take biasness of higher time to check tenacity.also SUSTAINABILITY of cash flow and how much cash r left out or sitting idle??
At top of range ,some times range expansion occurs ....this is key for a trendiness.
Here shortplayer throws towels...book loss gives strong up move.
Similarly at unfair low and after stop loss triggered by battered bull ;.....buy comes after some day from mature fund managers......as bigger sell no more exist .
hence i repeatTOP SIDE HAS UP BIAS, & BOTTOM ZONE ...BEARISH
.....hence both offset of unnatural high and unnatural low offer oppurtunity to observer/experienced trader
Now after little fall[distribution] so it is downside pause. here take breadth....2nd attack by bear to be expected......if they fail normally another attempt is made , fortunately if it holds ,
there is only one plausible move...UP.
For further analysis we go into micro detail ,study critical value zone and moneyflow near it. study how close affect and test and behave after creating imbalance and thus oppurtunity
day 1;open 9.15-1030
mid 1300-1330
end hr 2.40--1530
.....
I ZONE 1
I....
I ZONE 2
I....
I ZONE 3
CONCEPT OF RANGE BAR, compare with close yesterday
in hrly bar study use yesterday's last bar continuation idea
..............................
Factor: with growth of media and internet , investment money comes instantly to market after news.
a mix up in various timeframe player ,hype by media, fear of individual make trading a complex process .
......hence money flow is most critical element as in upmarket,
however in balance case, equilibrium to middle value ......tendency is normal .
(our aim is to search for directional move)
news ....its impact,unexpected readiness is must for a trader.say.....a bullish report comes , market but dont rally .....sign of great danger,,,,,,sell all holding ....be ready for short
.......................
hence visualise near term activity
study market's current condition
understand participant's vs. watcher's role .......range idea ,balanced zone
next comes can u watch price and learn and predict?
still its difficult to say ...a break out is going to be beginning of new trend......but that's the aim
..............................
studying market always at the context of present
..................................
what exist now? imbalance or balance
long term view and short term view
if imbalance exist ,go with the move .....in balance case -fade or watch.
now in weekly frame imbalance bias of upside must be taken as buy oppurtunity .
next question is where position should be held longer?
so normally after price escalation,..short the same trade in smaller size .....allow it to move to price restoration .....again take small position and watch
.....hence this 2 factor ..1]price and 2]participant r governing factor......when phenomena is controlled by price ....its better to buy at break pt after break out.....also sell by fade at rally.(as per rhythm of market)
remember money flow is mother of all activity .longer timeframe has more control ...to guide duration.calculate different av [ma] to continuity in intermediate term
.........
whether new top(near term) is holding or not, very critical part of study
strategy for balance[zone] and rule for imbalance .....r strategically as well as tactcally different.
Ability of a trader
1] see near term activity in longterm context
2] as a person [pro] aim to build up when to enter and how long to hold?
- time frame weekly is helpful
trade zone:mean pt keep balance with ma
hrly equivalent range expansion shall show trend ....market shall decide to stay there or break it[continuity]......thats the study giving clue at each hr....an excellent view put forward on nifty future.
2terms impulse[quick distribution] and reaction[development]....standard ta meanings r used- also higher time has powerful influence ,....normally impulse case move is up....then after is reaction
tradezone[development]........
1range established
2 value area rotation occuring
3 higher time is diminished by small small move in opposite direction [more in number] . repulsive by small insignificant move
now suddenly quick move starts in opposite direction
4.old support/resistance define activity with sp. limit with major idea mean reversion
................now conversion to impulsive system[quick distribution]
1. trade range expansion
2.beginning of a new higher timeframe move [bias]
touching higher ref pt[resistance ]and continue and break it to move forward
price influence is dominant
...........now with its trade zone reference and a big picture clarification with price and a breaking of critical price level , u can capitalise oppurtunity.hence see current activity,short term development,longterm impact [continuity idea]....enter the trade.
create this idea for buy/sell and taking position ,particularly understand impulsive strength.....spring coil'mechanism.we are as at trade zone ........idea of trade is different .... in low bottom test
in trade zone define first std resistance..recent top
std low support.....bottom
middle=balanced value
whether this top ,calculated from higher time frame is unfairly high?
then at top fade shall occur.....it means at high pt low volume sell ....but its coming contineously.
however in start of trend ,market is controled by active participant ie. force to join in it with strong money ,....normally create a forward drive. hence after continuation of higher top , break out continue[development of trend]..........it is searched for more money ....hence participant[stronghand ] r imp factor as they continue to hold,however ....if if its not backed by strong fund,.....holder become panicky, and start liquidating position .
hence do solid grasp of this theory[ hi i am a theoritician ....with sufficient trade experience only in indian stock market]......follow this principle to trade in cash or future[mature player only]....
first define reference pt with longer time frame
1] weekly
2] then watch near term activity(perspective of trade timeframe-daily)
3]see then how participant r behaving.....in particular price area
since the theory is long enough .......some imp hints r to be repeated.
1]what is mean value in longterm
2]past distribution phenomena 'trade zone'in higher time frame
3]cash flow plan of u and market participant
4]smaller time frame approach to study directional break
5]start of a trend vs. narrow rotation in top/bottom
6]directional trend depends on new events and market development with strong moneyflow
7]execute rapidly decisively with big picture in mind
8]new cause and hence change in perception of value
9]whether distribution [tradezone] is showing same bias in shorter timefram ie. wavelet
10]more news /activity is tandem with price behavior ....or suggesting directional play by news event
11] still keep ready for unnatural event
12]even after entry , near time judgement based on price has to be seen as well as who is active participant
13]longterm development
14]down day factor
15]test at zone[top].....how long u shall hold?........when sell come against u .....in context of today/or from higher time frame big volume seller
16]when to go for short?study critical price at new top?
17]in lower time zone what is the value ......if volume poor, so is higher mean reversal tendency.....hence fade trade plan.....
now where new buyers r uncertain?this is first criteria for short.....next media help to propaganda , seeing market at balance with slight -bias,....now sell big .....break down .
...when it try to reach equilibrium at bottom.....cut down excess ...normal profit booking ....and some short r hold....see by price with hope what near term suggest....if again down contd......just hold and book profit.
theory of short at top
..............................
is it a major resistance?
no strong buy observed at higher pt
if it cannot trade up, logically it should now test a bottom /mean value .....in downside .
as participant r uncertain ,so they shall definitely liquidate position by following law of volatility.....with this evidence we may join in short.
....where to liquidate?if with liquidation at bottom , new selling r coming .....hold further.
.......when market slowly reach upside ....and again start coming down ....go short.
prepare playplan first.....its not easy
first clear with holding position.....exit from all long position
...............................always judge possibility vs. actual ....and concept of part vs. whole
....only after some yr case basis trade ....then only trade aggressively
IF YES , DONT PUT MONEY......OBSERVE, LET OPPURTUNITY SLIP BUT DERISK
.....so now u test idea
check imbalance & direction of price move.......to reach a value in time and rupee from imbalance to balance.
IF FAILED EXPANSION CAN GIVE FADE....OPPOSITE DIRECTION TRADE[VICIOUS MOMENTUM
NEXT COMES STRENGTH OF BUYER AND HOLDING POWER....VS MARKETING STRATEGY ADOPTED BY MEDIA.....TO LURE THE WEAK MIND IN FORMING A CROWD RUN/CHASE
.....same way at bottom imbalance occur .........if new directional trend fail ? study....
oppurtunity or risk!!!
study neutral day and volatile day
...........................day 1,day 2, day 3, day 4, day 5.......@TOP ZONE AND BOTTOM ZONE
...........R U GETTING THE SIMILARITY ......HOPE NOW USE IT STOCK SP. CASE
now we actually watch this constantly unfortunately positional holding [blocked openion of direction] CRIPPLE OUR READING[ANALYSIS CAPACITY]
...............
IMP OF LONGTERM TRADER, ACTIVE PARTICIPATION CREATES BULLISH BIAS . ON THE CONTRARY AGGRESSIVE SELL BY THEM CAUSE DOWNFALL
WHEN THEY R UNDECIDED , WATCHING.....market stays in sideways
.....................another imp observation ,....one first move fail[neutralise by counter selling] THEN AGAIN MOVE ...........THIS NORMALLY HELPFUL, ACTUALLY 3RD MOVE HAS MORE STATISTICAL UPBIAS .
MIND IT ALWAYS.......PERCEPTION OF VALUE ITSELF IS VARIABLE
U MUST STUDY RELATIONSHIP WITH PREVIOUS DAY/WEEK......WHAT IS HAPPENING NOW?IN MARKET ,IN THIS SESSION ..TODAY....THIS HR??
STUDY BALANCED DISTRIBUTION WHICH NORMALLY HAPPENS BUT AWARE OF POTENTIAL LIQUIDATION PT
a bull is ready to liquidate for profit .......but where??
adding of new info [+ive dimention].....no risk....hence hold further for bigger profit.
but opposite direction move starts.....bull must liquidate to book money profit.
hence excess of profit[desire].....act a new dimention to an existing trade
.......VOLUME TO STUDY....BIG MEANS MORE ATTRACTIVE BUYER OR SELLER
HENCE STUDY AFTER OPENING WITH RESPECT TO YESTERDAY CLOSE .......HOW MARKET IS BEHAVING TODAY [1/2 HR]...CRUCIAL .UNDERSTAND WHAT IS A TREND IN CONTINUITY..
WHETHER IT EXISTS AND FURTHER CHANCE OF CONTINUITY , ON THE CONTRARY imbalance and move to extreme or mean reversion balancing move[no trade oppurtunity exist then]
ON THIS CONDITION ON ACTUAL MARKET CORRECT TRADE EXIST.....AND THIS IMBALANCE AND MOVE TO EXTREME FACILITATE A TRADE[ CONTINUATION TYPE BUY SYNDROME TRADE WITH TREND]
............HOWEVER ANOTHER DIFFERENT BALL GAME CHOSEN BY A FEW PRO.
LOGIC..change can happen rapidly .observe[perception change of participants]
normally its dificult to understand change of trend due to bias[ so being minority these pro r in right side of trade,unexpected event due taken care of]
study session 1 hr chart bias & gap fill..session 2 ...session 3...session 4 session 5
similarly in day 1 day 2 day 3 day4 ....day5......WHEN OPPSITE FORCE ATTACK ?
HOW IT ATTACK ........INDIVIDUALS PERCEPTION OF VALUE......MOMENTARILY WEEK HAND GO IN UNCERTAINITY MODE AND ACT FOR SELF SABOTAGE.....THROW AWAY IDEA [IF AT ALL] IN PANIC.......AND supply money to this cold blooded pro......as if natural loser[being weak disciplined person]
HOWEVER STRONG HAND ALWAYS PROVEN RIGHT DUE TO CONFIDENCE[JUST LIKE RECENT ENTRY @BSE14200......]STICK TO AND READY TO BUY , ABSORB AT FALLING PRICE CONSIDERING IT AS FURTHER BUYING OPPURTUNITY
hence perception of same event has 2fold outcome/influence.......weak hand seller and strong hand as buyer
.......as a normal person we r fearful of uncertainity , so any event which has financial implication we watch, and try to derive its influence in short term and those who can think for long term,......size and visinity.....a cluster zone can be created considering upper boundary price tag[target]....and lower zone value [entry pt]
all we know condition affects price.......so plan should be ,
1]change of price up...sell oppurtunity
2]low zone...considerably buy idea....provided new percept not so bad
........dynamics of each case stock specific is different
....hence another idea .....surprise event
unlikely event
expected event ......has to be added
.................................................. .
in expected event normally mean reversion towards value equilibrium occur
another 2 factor.....fundamental impact of an event and understanding time frame r imp.
normally higher time frame ,say weekly......has more bias...
however in case an unlikely event ,occurs as a shock, price and its value both move together towards a directional bias until stability
hence give priority to surprise event as it act as oppurtunity
on the contrary if u r in wrong side , book loss early if possible reverse position
......remember for expected event after announcement normally price reacts to opposite direction
THIS INSIGHT HELP TO UNDERSTAND RISK BETTER IN TRADING
buyers /sellers confidence and uncertainity r imp factor
actually buyers' dominance /sellers big volume attack....this 2 greatly influence price and so called direction into 'oppurtunity' [threat to a fool]
wild move suggests thrust, when participant transfer from hesitent to aggressive ...wide range occurs.where as openion based participation without rigid parameter and future uncertainiy cause wide fluctuation [volatility]
hence a feel for value is vital
oppurtunity=price away from actual value
normally price fluctuate above and below value
execute=how quick u can act
depends on how much clearly u can visualise with certainity
always study from long term prospective,..what chance is there from present balance to go to quickly imbalance and stabilise higher[new] balance zone
.....now ask ....will sombody buy at higher,if yes....ok..buy now.
for shorting , if u see big seller may come or not.
hence mean reversion is a good theory to apply in market
..........................
hence u check if at present
1] current market is undervalued or not [strategy]
2]study of imbalance in buyer'side
3]continuity factor
..................
hence reaction to news is an imp study to understand internal strength of market
...........................
confident trader[longterm mature buyer] vs. novice day to day [trouble lover]
...........................
remember current perception of value r always reflected in price
............................
be ready for atleast 2 different event 1]unlikely.....2]expected one
play plan for both r entirely differentfor unlikely event,if u r in otherside ,damage is very costly,hence prepare for it,..as then price and value both quickly goes against u,shockingly bigger loss
hence be ready in mental level for it[worst case scenario]
experience helps to understand this price/value/event relationship and expectation of people vs. news and its reflection in price
this i call market dynamics of watchers
hence confidence and uncertainity of watchers[potential buyer/seller] gives only directional bias.with uncertainity more rotation occurs ie. distribution phase
.................................
price distribution study
........................... study of ask vs. bid
1]10 -1030..first half hr
2]13-1330 lunch hr
volume or order flow study based on
3]15-1530[presently upto 16oo]close hr tick data[pib]
.................................................. ..............................
this study of tpo...time price oppurtunity concept u have to do for u [own research]
mine shall not validate ur plan....however i suggest to distinguish to understand
up day
down day
volatile day
.................
first half hr ..opening initial balance with yesterday close
lunch hr...observation of biasness development
closing hr...time to take action
................
most imp is long term holder[strong money] r participating or they r sensing danger...hence selling delivery [distributing] to sit on cash andor taking money out
.............
normally all buyers want to buy low and sell at profit[high]
so categorise buyers......short term and long term in trading percept.
long term trader search for unfairlow price with bigger view with higher holding period
shortterm player search and book profit with quick imbalance
hence when break out style is visible ,ranging is moving up with interesting higher pivot break pt, with perception of imbalance to continue.......long term player put big chunk of money near day end with high bias of continuity
........................
so short term day trade type player ,skillful in execution take its advantage ..with their computer generated signal [an edge to take !%profit] continuously take profit with him as per his comfort level ......he is happy , as his scanner suggest oppurtunity every now and then.....based on %up list/volume up signal /a quick pivot break up.
however for long term buyer its not that easy........he has to search continuity of directional bias , ruthlessly buy out volume at top with money power to prove break out.
hence study on eod /weekly chart of impulse[main direction] and distribution [reaction]..
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hence i repeat again ,good 1-2 day mometum players use to play to trade in the side of big money player.
some other skillful player trade ..buy and sell in small targeted zone.
however when other players,new players vs. strong money players maintain equilibrium ....
hence plan of small profit with sector rotation occur as equilibrium tradezone facilitates buy low at support and fade at weekly resistance pt.
so long term fund is out and watching as imbalance creation is aim for strong hand......with watch when they found without news some strong resistance zone is touching again and again ,they test with good money power ..can they break it? ,if yes, put it....and pull price price out of that resistance to new imbalance with a hope of continuity ,luckily greedy buyer or fearful short seller, sometimes media with news help them to fulfil target.
this balance area of around resistance line is test ground .....against new buyer by other pro seller or experiment field for short term players, however ...continuity or holding several days over this new acquired land [from bear]....severity of opponent comes down ...as a true pro they leave to win against bull in other stock where high price on top may attract short seller.
corolliary: market moves directionally unless opposite [reaction against impulse]...strong orderflow comes[attack by big sell].
......................
concept of whole [market] vs. part[individual stock]
..................
nifty component imp one r to be checked .....similarly for summation of total effect ie. play plan of nifty.
similarly for intraday........first playplan
i]range is defined ....high/low in first 10min...[for av trader 1/2 hr]
balancing of flow in it.....when and where it showing range expansion.....show direction defined
ii]so verifying continuity of imbalance in mental level
[i do it,u can use suitable software for it]
enter the trade.....as strong order flow is coming inyour direction ,while breaking predefined pivot ........
yes its the real intraday trade.
[however unless u know control of mind /experience.....hit of moment its not possible
all we know ftse market of opening .....affects around 14hr in trading......and opening bias of nasdaq in tech shares.
now beginning must be observed carefully[in fluctuation as well as orderflow]
price must be treated as supreme ............holding of price over a particular value ...in a particular duration suggest lot of things
yes its the secret of trading
hence study of imbalance and test trade r imp.
...now after new price discovery it has a typical tendency to reach new balance , old resistance bounce .....idea of test validity of new price strength
somebody puts in oldway of impulse......and distribution [reaction]....upto a particular retracement value,
however next flow is all imp .......as it gives all important continuity of imbalance.....as seen in pennant and flag pattern
in other words orderflow or new money is vital.
imp oppurtunity occurs if continuiity can be seen,......VISUALISE for higher time frame .
the delivery trade by close........drying the float uplift price normally further up
some of us in this field of trade experiment put this mean value +/- 2sigma.....a balanced zone with typical past data calculation for 'sigma' value...in this days of statistics,for them monthly once new value based on 20 trade day better.......however i warn too much math make trading less profit worthy....as its the execution and sense of survival that counts after stoping self sabotage,...holding the profitable trade sufficiently take care of u and ur family.dream big should not be motto,learn big and live in reality
.................
normally high value order occuring in the stable zone slowly seen....as all r ready to watch for volume play.market moves as perception of value[fundamental] changes.as all [different time ,different style players participate in market simultaneously view and analysis is not so easy[in fact very difficult time consuming process for me six year to learn and i am putting this hypothesis].......thats why an organized analytical view help.
key component r 1]interest of shortterm buyer[intraday]
2]interest from weekly chart[view from intermediate term]
3]interest of swing style [eod study followed by av]
hence organize trade from this 3 element[put 3 different power spec. to see different view
and now give weightage]..........VISUALISATION IS KEY TRADE TOOL, IT ONLY HELPS TO ACT WHEN OPPURTUNITY/THREAT COMES .........otherwise fear/greed put u wrong trade..
put u in info paralysis,courage not to act.......u can be an analyst but not a trader.
larger time player has thats why better judgement,as considering temp fall they can buy in strong bull run.
report publication and its impact change in near term value.......later when bruice die down they enter slowly if long term view is that really good.in all time frame balancing occur through movement of price from quick imbalance[impulsive] to reach next probable balanced zone. volume suggests aggressiveness of participant
study of std 1-2-3 pattern[a-b-c named by others] is always helpful to understand change in value perception
successive session continue ie. biasness of trend.uncertain buyer/seller can not hold trade
linda has suggested first this simple break up of a range bar in 3sect......higher as 1, middle equilibrium and 3 low as down bias......now close gives more mathematical judgement than foolish openion style trade,.....see at close where more activity is ,in tick chart volume by more activity suggest buy by short term moody buyer or deep pocket longterm player .....
study of time and distance move by price clears it......
time when it breaks and move up very imp.
influence of current pice[close of last] also to be seen.close shows final sentiment of that particular time frame ..balance pt of bull/bear.now come influence ........if influence of price towards back[rationality].....price goes back to mean reversion.
if confirmity of irrational by price........up and up or by gap up ......concept of greed or trend fulfils.now most market participant believe [mean of total ie. market majority] it shallmove up....really it will move up.
this is the forward move of price......confirmity.
........................
normally most of time market maintain balance[equilibrium].
short term break of balance shown in long term chart[weekly]...gives oppurtunity when strong money players[biased] participate in trade with a vbiew to hold.
imbalance strength can be studed by volume , price roc also imp.....also study distribution [price relationship]
majority time after new value discovery price move quickly occurs by impulsive move to reach new stable zone. a forward price driveness occurs in market, based on earlier close and feed by media.among all timeframe player higher time frame has max influence [dominance]
.......................recognisation of trend..............
to define a trend ,a ref pt has to taken..it may be yesterday close ...mean pt. or opening stabilise
another factor,.....market needs time to develop trend [continuation]..ie. market must show some move , then opposite direction force has to be neutralised, then only new direction strong trend move possible .
step 1; study in 'balance area'
so which direction imbalance is building up
step 2; now in relation to bigger picture ...how a trend may form
so fairly low..fairly high] ...which one is breaking with thrust ....govern..move in future
....................
however sometimes stabilisation occurs ,hence price flatly fluctuate high/low of a range...in side ways.hence a band study is critical and how many times it touches to break at top or bottom[say 3].now when at what context reversing in price with volume thrust is very imp
now if down value is not breaking , then upthrust may bring easily a move of trend .
the path of least resistance .....another concept to be put forward.similarly market if can not trade up ,anticipate a test in downside ,
hence check reverse at top.....unfair top value, reverse at bottom unfair bottom value.
.....however equilibrium in middle not to trade........and watch only
.................................................. we also watch condition that affect value .it helps in our decision making process of trading
1]imbalance in move
2]balance of rotation in money [sector rotation] as uncertainity play plan
3] about to; termination and sharp move in opposite direction
4]continuation of past main strength
..pl use this concept in actual trade.
cashflow[money flow] is based on news flow....new development causing watcher participate to join , samely if big sell occurs cash go out of system, causing downfall of market..so at low value ,with least interest sell diminish.so range ....high -low , imp to watch on context when and why occurs. its also variable of session 1-session2--session 3 has some relation to predict continuity and or reversal . in an established higher time reference range balance trade occurs.but considering oppurtunity cost this zone with small range not to be traded as least oppurtunity exist.axism of trade =test of top and bottom .now with spring action by thrust imbalance break that zone at top or at bottom ,attracting further buyer/seller and another new equilibrium attempt is made,however strong media hype can fuel addition of new buyer/seller. distribution of capital is another theme..expectation factor/ma study as suitable smoothing is helpful[50dma certainly guide idea of intermediate term].u have to take biasness of higher time to check tenacity.also durability of cash flow and how much r left out or sitting idle??
at top of range ,some times range expansion occurs .this is key for a trendiness.at what pt shortplayer throws towels...book loss gives strong up move[thrust like yesterday]
similarly at unfair low and after stop loss triggered by battered bull ;.....buy comes after some day from mature fund managers......as bigger sell no more exist .
hence i repeatTOP SIDE HAS UP BIAS, 3BOTTOM ZONE ...BEARISH
.....hence both offset of unnatural high and unnatural low offer oppurtunity to observer/experienced trader
factor: with growth of media and internet , investment money comes instantly to market after news.
a mix up in various timeframe player ,hype by media, fear of individual make trading a complex process .
......hence money flow is most critical element as in upmarket, money and index both r up
however in balance case, equilibrium to middle value ......tendency is normal .
our aim is to search for directional move
news ....its impact,unexpected readiness is must for a trader.say.....a bullish report comes , market but dont rally .....sign of great danger,,,,,,sell all holding ....be ready for short
.......................
hence visualise near term activity
study market's current condition
understand participant's vs. watcher's role .......range idea ,balanced zone
next comes can u watch price and learn and predict?
still its difficult to say ...a break out is going to be beginning of new trend......but thats the aim
.....................................so normally unless normal signal is not valid,..short the same trade in smaller size .....allow it to move to price restoration .....again take small position and watch
.....hence this 2 factor ..1[price and 2]participant r governing factor......when phenomena is controlled by price ....its better to buy at break pt after break out.....also sell by fade at rally.
memember money flow is mother of all activity .longer timeframe has more control ...to guide duration.calculate different av [ma] to continuity in intermediate term
.........
near term whether top is holding or not, very critical part of study
.............................................
Volume confirms liquidity and price distribution, actually used for confirmation of price strength.it may help in your decision making tree.
1]trend is going to continue??purpose is react early
ask question ...to clarify ...what market imp.participant r doing ?buying or selling..or in distribution [watching]
in trade zone ....again see as per range in middle no participation , near top.....high volume participation with good % delivery.......take risky entry
near bottom low volume participation ...again take entry....support buy.
...........
can we distinguish buy volume vs. sell volume?in higher range with price up,volume up phenomena is good .
in lower range , higher volume suggest sell volume.
........
next question is at lower volume at down day who is buying it?....definitely long term informed buyer r buying with good idea on company /near future.remember long term buy is done at comparative lower price ......with different play plan of sleeping money.
...............
higher volume near top suggest interest by strong hand .....a short term aggressive play plan.
total volume tool
.................
creating momentum more than double volume ,compare to 10day av. is good.observe when down volume brings strong buy .....quick up move [not allowing to stay in bottom].......it suggests whenever good news flow comes , probability of strong upmove.
similarly if low price brings more activity ,price shall have to go down .....to stabilise first.decrease in volume in low price ......stock has no more interest,however bottom is near.
if low no trade @top,.....buyers seem to be not confident .......hence fall is imminent
in general volume pick up suggests more participation of public in direction of price.
advertisement of commercial when marketing.....play to lure participant is natural....
so it can be a tool for oppurtunist trader ........
more activity [normal type distribution ] @ av zone.......is balancing action......watch only.
ultimate shift to topside or bottom zone has some utility.hence expected behavior in trade zone .........buy at lower value and sell @higher value [channel play]
but who is behind to change it........to create a new trend?
hence sudden sell by pro at lower value means they expect bottom further, similarly buy by them at top.......means they have reason to be greedy[unexpected event ]
Three main criteria to pinpoint potential Stock Picks
A history of consistently strong sales and earnings growth
A reasonable price
Strong price action relative to the market
As long as the stock shows consistently strong sales and earnings growth you can continue to hold it. This ofcourse is fundamentally. However since we trade price and profit from price trend I would suggest you get out of your holdings as soon as the stock you are holding begins a decline/downtrend is prices.
stock picking is an art...an experience hand can do it.
fundamental data gives the potential of future betterment.for a different industry ballgame is different...futuristic business up has to be seen in light of profitability.
so some idea...on a sector.
hospitality and tourism ....on hotel.
theme of cram...export
banking...rate of interest...npa
............
next comes ta...its the reflection of price......what present traders r doing..
how far they r bullish?
here most traders make mistake........they presuppose to guess..[hoping accurately...forgetting its a probalistic model]
its only DIRECTION CAN BE PREDICTED. not the target...
judgement must be for continuation[trend]..or reversal[mean reversion]
initial plan must be based on low risk strategy...and what works on present market condition.
risk analysis must be done...before entry.
as price reflects all known event....we should spend money to get unknown news...which may affect price
or otherway...we must study reflection of news on price...
.........next factor...how u close a trade...and what u learnt from a trade.
its those analysis makes u a mature trader AUCTION CONCEPT IS VERY IMP FOR TRADING, NEGOTION OF BUYER AND SELLER ..A VALUE ZONE,HIGHER UNJUSTIFIED, A SELL PT,....LOWER AGAIN UNJUSTIFIED BUY PT.
PROFESSIONAL MONEY MANAGER WHO BELIEVES IN TA LOOK FROM LONGER TIME WEEK/MONTH.....START BUY THEN AS THEY HAVE MONEYPOWER.
normally we should all buy lower price ....use for buy oppurtunity and use higher price zone for profit booking oppurtunity.
in normal condition market stay at top or bottom a little .and stabilise at price equilibrium pt
IF WE LOOK FROM LONGER TIMEFRAME WE HAVE BETTER ANALYSIS TO TRADE
IMBALANCE OF PRICE.
REMEMBER- PRICE TRY TO REACH QUICKLY TO BALANCE.
NOW TIME TO REACH THERE ,before that entry...IS OPPURTUNITY
WE must study behavior of market to understand it.
define ;RANGE DEVELOPMENT
NORMAL DAY
TREND DAY.....UP AND DOWN [nothing told consider up to put sp idea]
VOLATILE DAY
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RANGE HELPS TO DEFINE DAY IN TIME
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CONCEPT OF CONTROL ; BUYER $ SELLER
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PRICE NORMALLY GREED DRIVEN IS UP
PRICE UNDER CONTROL OF FEAR...DOWN TREND
MARKET MOVES FROM IMBALANCE TO BALANCE
THROUGH PRICE EXTREME/RANGE EXPANSION OR VALUE AREA..SLOW MOVE
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LONGTERM TRADER WATCH FOR OPPURTUNITY, SEARCH FOR A PRINT[REPEATATIVE TENDENCY OF EDGE 'GIANT FOOTPRINT'
WHEN LARGE BUYERS COME PRICE MOVE UP AND WHEN BIG SELL-ORDER COMES PRICE FALL DOWN.
IN UPMOVES , RESPONSES COME FROM GREED DRIVEN OBSERVER
HENCE MARKET BEHAVIOR STUDY FURTHER BREAK UP 2SUBTLE ISSUE
1]IMBALANCED DIRECTIONAL MOVE
2]BALANCED ROTATION OF MONEY IN CYCLE /FOR SECTOR ALSO DUE TO CONSTANT CHANGE OF PARTICIPANTS PSYCHOLOGY[GREED AND FEAR]
OPINION...Longterm opinion of price reflects true value of stock
current value=todays value[all known and unknown openion hidden in price]
its imbalance we search for.....in weekly chart we see value shifting higher to see oppurtunity of longterm buy
range extension[predictive] shows biasness of close,normally in a range day,
DAYTRADER do active participation[whether earn or lose] at day top and at day bottom
now continuity of price at extension towards end of session provide biasness of watcher[better skilled trader] to put money for future oppurtunity to earn with trend[continuation]
AT CLOSE TIME HIGHER PRICE BUYING ACTIVITY SUGGEST LONG TIME STRONG HAND BUYER ACTIVE [OPPURTUNITY EXISTS TO EARN]
HENCE STUDY FOR OPPURTUNITY TO CONTINUATION OF IMBALANCE IS IMP WITH THE HELP OF 3 TOOL......PRICE,VALUE AND MARKET ACTIVITY
wide expansion is good for daytrade.....from range to wider range ...to be watched for
now narrow range suggests 'side ways market'.....
INITIATION OF TRADE
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1.WATCH[OBSERVATION]
2.RESPONSE i]extreme......STOP
ii] favourable[ continue to hold or add]
other factor....problem of hope
3.now study specific case[with past data ,if ieod very good
4. failed expansion....too much too soon
5.trend termination...........trend of opposite....if proffesional fading coming with volume
..............
always ask current condition , value with mean [open high low close=mean] vs close price
HOW LONG TERM PLAY TRADER R THINKING ? R THEY UNCERTAIN ??
IF YES , DONT PUT MONEY......OBSERVE, LET OPPURTUNITY SLIP BUT DERISK
.....so now u test idea
check imbalance & direction of price move.......to reach a value in time and rupee from imbalance to balance.
IF FAILED EXPANSION CAN GIVE FADE....OPPOSITE DIRECTION TRADE-VICIOUS MOMENTUM
NEXT COMES STRENGTH OF BUYER AND HOLDING POWER....VS MARKETING STRATEGY ADOPTED BY MEDIA.....TO LURE THE WEAK MIND IN FORMING A CROWD RUN/CHASE
.....same way at bottom imbalance occur .........if new directional trend fail ? study....
oppurtunity or risk!!!
study neutral day and volatile day
...........................day 1,day 2, day 3, day 4, day 5.......@TOP ZONE AND BOTTOM ZONE
...........R U GETTING THE SIMILARITY ......HOPE NOW USE IT STOCK SP. CASE
now we actually watch this constantly ...........unfortunately positional holding [blocked opinion of direction with hope] CRIPPLE OUR READING[ANALYSIS CAPACITY]
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LONGTERM TRADER'S ACTIVE PARTICIPATION CREATES BULLISH BIAS . ON THE CONTRARY AGGRESSIVE SELL BY THEM CAUSE DOWNFALL
WHEN THEY R UNDECIDED , WATCHING.....market stays in sideways
.....................another imp observation ,....one first move fail[neutralise by counter selling] THEN AGAIN MOVE ...........THIS NORMALLY HELPFUL, ACTUALLY 3RD MOVE HAS MORE STATISTICAL UPBIAS .
MIND IT ALWAYS.......PERCEPTION OF VALUE ITSELF IS VARIABLE
U MUST STUDY RELATIONSHIP WITH PREVIOUS DAY/WEEK......WHAT IS HAPPENING NOW?IN MARKET ,IN THIS SESSION ..TODAY....THIS HR??
STUDY BALANCED DISTRIBUTION WHICH NORMALLY HAPPENS BUT AWARE OF POTENTIAL LIQUIDATION PT
a bull is ready to liquidate for profit .......but where??
adding of new info [+ive dimention].....no risk(u r siting with profit)....hence hold further for bigger profit.
but opposite direction move starts.....bull must liquidate to book money profit.
hence excess of profit[desire].....act a new dimention to an existing trade
.......VOLUME TO STUDY....BIG MEANS MORE ATTRACTIVE BUYER OR SELLER
HENCE STUDY AFTER OPENING WITH RESPECT TO YESTERDAY CLOSE .......HOW MARKET IS BEHAVING TODAY [1/2 HR]...CRUCIAL .UNDERSTAND WHAT IS A TREND IN CONTINUITY..
WHETHER IT EXISTS AND FURTHER CHANCE OF CONTINUITY , ON THE CONTRARY imbalance and move to extreme or mean reversion balancing move[no trade oppurtunity exist then liquidate]
ON THIS CONDITION ON ACTUAL MARKET CORRECT TRADE EXIST.....AND THIS IMBALANCE AND MOVE TO EXTREME FACILITATE A TRADE-[ CONTINUATION TYPE BUY SYNDROME TRADE WITH TREND]
....HOWEVER ANOTHER DIFFERENT BALL GAME CHOSEN BY A FEW PRO.
LOGIC....change can happen rapidly .observe[perception change of participants]
normally its dificult to understand change of trend due to bias[ so being minority these pro r in right side of trade,unexpected event due taken care of]
study session 1 hr chart bias & gap fill..session 2 ...session 3...session 4 session 5
similarly in day 1 day 2 day 3 day4 ....day5......WHEN OPPSITE FORCE ATTACK ?
HOW IT ATTACK ........INDIVIDUALS PERCEPTION OF VALUE......MOMENTARILY WEEK HAND GO IN UNCERTAINITY MODE AND ACT FOR SELF SABOTAGE.....THROW AWAY IDEA [IF AT ALL] IN PANIC.......AND supply money to this cold blooded pro......as if natural loser[being weak disciplined person]
HOWEVER STRONG HAND ALWAYS PROVEN RIGHT DUE TO CONFIDENCE-STICK TO AND READY TO BUY , ABSORB AT FALLING PRICE CONSIDERING IT AS FURTHER BUYING OPPURTUNITY
hence perception of same event has 2fold outcome/influence.......weak hand seller and strong hand as buyer
.......as a normal person we r fearful of uncertainity , so any event which has financial implication we watch, and try to derive its influence in short term and those who can think for long term,......size and visinity.....a cluster zone can be created considering upper boundary price tag[target]....and lower zone value [entry pt]
all we know condition affects price.......so plan should be ,
1]change of price up...sell oppurtunity
2]low zone...considerably buy idea....provided new percept not so bad
........dynamics of each case stock specific is different
....hence another idea .....surprise event
unlikely event
expected event ......has to be added
.................................................. .
in expected event normally mean reversion towards value equilibrium occur
another 2 factor.....fundamental impact of an event and understanding time frame r imp.
normally higher time frame ,say weekly......has more bias...
however in case an unlikely event ,occurs as a shock, price and its value both move together towards a directional bias until stability
hence give priority to surprise event as it act as oppurtunity
on the contrary if u r in wrong side , book loss early if possible reverse position
......remember for expected event after announcement normally price reacts to opposite direction
THIS INSIGHT HELP TO UNDERSTAND RISK-MAKES U BETTER IN TRADING
buyers /sellers confidence and uncertainity r imp factor
actually buyers' dominance /sellers big volume attack....this 2 greatly influence price and so called direction into 'oppurtunity' [threat to a fool]
wild move suggests thrust, when participant transfer from hesitent to aggressive ...wide range occurs.where as openion based participation without rigid parameter and future uncertainiy cause wide fluctuation [volatility]
hence a feel for value is vital
oppurtunity=price away from actual value
normally price fluctuate above and below value
execute=how quick u can act
depends on how much clearly u can visualise with certainity
always study from long term prospective,..what chance is there from present balance to go to quickly imbalance and stabilise higher[new] balance zone
.....now ask ....will sombody buy at higher,if yes....ok..buy now.
for shorting , if u see big seller may come or not.
hence mean reversion is a good theory to apply in market
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hence u check if at present
1] current market is undervalued or not [strategy]
2]study of imbalance in buyer'side
3]continuity factor
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hence reaction to news is an imp study to understand internal strength of market
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confident trader[longterm mature buyer] vs. novice day to day [trouble lover]
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remember current perception of value r always reflected in price
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be ready for atleast 2 different event 1]unlikely.....2]expected one
play plan for both r entirely different for unlikely event,if u r in otherside ,damage is very costly,hence prepare for it,..as then price against u,shockingly bigger loss
hence be ready in mental level for it[worst case scenario]
Experience helps to understand this price/value/event relationship and expectation of people vs. news and its reflection in price
this i call market dynamics of watchers
hence confidence and uncertainity of watchers[potential buyer/seller] gives only directional bias.with uncertainity more rotation occurs ie. distribution phase
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price distribution study
........................... study of ask vs. bid
1]9.15 -1015.first hr
2]13-1330 lunch hr
volume or order flow study based on
3]2.45-1530
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this study of tpo...time price oppurtunity concept u have to do for u [own research]
mine shall not validate ur plan....however i suggest to distinguish to understand
up day
down day
volatile day
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first half hr ..opening initial balance with yesterday close
lunch hr...observation of biasness development
closing hr...time to take action
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most imp is long term holder[strong money] r participating or they r sensing danger...hence selling delivery [distributing] to sit on cash andor taking money out
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normally all buyers want to buy low and sell at profit[high]
so categorise buyers......short term and long term in trading percept.
long term trader search for unfairlow price with bigger view with higher holding period
shortterm player search and book profit with quick imbalance
hence when break out style is visible ,ranging is moving up with interesting higher pivot break pt, with perception of imbalance to continue.......long term player put big chunk of money near day end with high bias of continuity
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so short term day trade type player ,skillful in execution take its advantage ..with their computer generated signal [an edge to take 1%profit] continuously take profit with him as per his comfort level ......he is happy , as his scanner suggest oppurtunity every now and then.....based on %up list/volume up signal /a quick pivot break up.
however for long term buyer its not that easy........he has to search continuity of directional bias , ruthlessly buy out volume at top with money power to prove break out.
hence study on eod /weekly chart of impulse[main direction] and distribution [reaction]..
where this phenomena is going to happen now
hence i repeat again ,good 1-2 day mometum players use to play to trade in the side of big money player.
some other skillful player trade ..buy and sell in small targeted zone.
however when other players,new players vs. strong money players maintain equilibrium ....u can take rest as NO oppurtunity exists.
hence plan of small profit with sector rotation occur as equilibrium tradezone facilitates buy low at support and fade at weekly resistance pt.
so long term fund is out and watching as imbalance creation is aim for strong hand......with watch when they found without news some strong resistance zone is touching again and again ,they test with good money power ..can they break it? ,if yes, put it....and pull price out of that resistance to new imbalance with a hope of continuity ,luckily greedy buyer or fearful short seller, sometimes media with news help them to fulfil target.
this balance area of around resistance line is test ground .....against new buyer by other pro seller or experiment field for short term players, however ...continuity or holding several days over this new acquired land [from bear]....severity of opponent comes down ...as a true pro they leave to win against bull in other stock where high price on top may attract short seller.
corolliary: market moves directionally unless opposite [reaction against impulse]...strong orderflow comes[attack by big sell].
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concept of whole [market] vs. part[individual stock]
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nifty component- imp one r to be checked .....similarly for summation of total effect ie. play plan of nifty.
similarly for intraday........first playplan
i]range is defined ....high/low in first 10min...[for av trader 1/2 hr]
balancing of flow in it.....when and where it showing range expansion.....show direction defined
ii]so verifying continuity of imbalance in mental level
[i do it,u can use suitable software for it]
enter the trade.....as strong order flow is coming inyour direction ,while breaking predefined pivot ........
yes its the real intraday trade.
[however unless u know control of mind /experience.....hit of moment its not possible
all we know ftse market of opening .....affects around 14hr in trading......and opening bias of nasdaq in tech shares.
now beginners must observe carefully[in fluctuation as well as orderflow]
price must be treated as supreme ............holding of price over a particular value ...in a particular duration suggest lot of things
yes its the secret of trading -hence study of imbalance and test trade r imp.
...now after new price discovery it has a typical tendency to reach new balance , old resistance bounce .....idea of test validity of new price strength
somebody puts in oldway of impulse......and distribution [reaction]....upto a particular retracement value,
however next flow is all imp .......as it gives all important continuity of imbalance.....as seen in pennant and flag pattern
in other words orderflow or new money is vital.
imp oppurtunity occurs if continuiity can be seen,......VISUALISE for higher time frame .
the delivery trade by close........drying the float uplift price normally further up
some of us in this field of trade experiment put this mean value +/- 2sigma.....a balanced zone with typical past data calculation for 'sigma' value...in this days of statistics,for them monthly once new value based on 20 trade day better.......however i warn too much math make trading less profit worthy....as its the execution and sense of survival that counts after stopping self sabotage,...holding the profitable trade sufficiently take care of u and ur family.
Dream big should not be motto,learn big and live in reality
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normally high value order occuring in the stable zone slowly seen....as all r ready to watch for volume play.market moves as perception of value[fundamental] changes.as all [different time ,different style players participate in market simultaneously view and analysis is not so easy[in fact very difficult time consuming process for me six year to learn and i am putting this hypothesis].......thats why an organized analytical view help.
key component r
1]interest of shortterm buyer[intraday]
2]interest from weekly chart[view from intermediate term]
3]interest of swing style [eod study followed by av]
hence organize trade from this 3 element[put 3 different power spec. to see different view and now give weightage]..........
VISUALISATION IS KEY TRADE TOOL, IT ONLY HELPS TO ACT WHEN OPPURTUNITY/THREAT COMES .........otherwise fear/greed put u wrong trade..
Never put u in info paralysis,courage not to act.......u can be an analyst,unless decisive u cannot be not a trader.
larger time player has guts + experience,thats why better judgement,as considering temp fall they can buy in strong bull run.
report publication and its impact change in near term value.......later when bruise die down they enter slowly- if long term view is that really good.
In all time frame balancing occur through movement of price from quick imbalance[impulsive] to reach next probable balanced zone. volume suggests aggressiveness of participant .study of std 1-2-3 pattern[a-b-c named by others] is always helpful to understand change in value perception
successive session continue ie. biasness of trend...also uncertain buyer/seller can not hold trade.
Linda has suggested first this simple break up of a range bar in 3sect......higher as 1, middle equilibrium and 3 low as down bias......now close gives more mathematical judgement than foolish opinion style trade,.....see at close where more activity is ,in tick chart volume by more activity suggest buy by short term moody buyer or deep pocket longterm player .....
study of time and distance move by price clears it......
time when it breaks and move up very imp.
influence of current pice[close of last] also to be seen.close shows final sentiment of that particular time frame ..balance pt of bull/bear.now come influence ........if influence of price towards back[rationality].....price goes back to mean reversion.
if confirmity of irrational by price........up and up or by gap up ......concept of greed or trend fulfils.now most market participant believe [mean of total ie. market majority] it shall move up....really it will move up.
this is the forward move of price......confirmity.
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normally most of time market maintain balance[equilibrium].
short term break of balance shown in long term chart[weekly]...gives oppurtunity when strong money players[biased] participate in trade with a vbiew to hold.
imbalance strength can be studed by volume , price roc also imp.....also study distribution [price relationship]
majority time after new value discovery price move quickly occurs by impulsive move to reach new stable zone. a forward price driveness occurs in market, based on earlier close and feed by media.among all timeframe player higher time frame has max influence [dominance]
.......................recognisation of trend...
to define a trend ,a ref pt has to taken..it may be yesterday close ...mean pt. or opening stabilise
another factor,.....market needs time to develop trend [continuation]..ie. market must show some move , then opposite direction force has to be neutralised, then only new direction strong trend move possible .
step 1; study in 'balance area'
so which direction imbalance is building up
step 2; now in relation to bigger picture ...how a trend may form
so fairly low..fairly high] ...which one is breaking with thrust ....govern..move in future
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however sometimes stabilisation occurs ,hence price flatly fluctuate high/low of a range...in side ways.hence a band study is critical and how many times it touches to break at top or bottom[say 3].now when at what context reversing in price with volume thrust is very imp
now if down value is not breaking , then upthrust may bring easily a move of trend .
the path of least resistance .....another concept to be put forward.similarly market if can not trade up ,anticipate a test in downside ,
hence check reverse at top.....unfair top value, reverse at bottom unfair bottom value.
.....however equilibrium in middle not to trade........and watch only
.................................................. we also watch condition that affect value .it helps in our decision making process of trading
1]imbalance in move
2]balance of rotation in money [sector rotation] as uncertainity play plan
3] about to; termination and sharp move in opposite direction
4]continuation of past main strength
..pl use this concept in actual trade.
cashflow[money flow] is based on news flow....new development causing watcher participate to join , samely if big sell occurs cash go out of system, causing downfall of market..so at low value ,with least interest sell diminish.so range ....high -low , imp to watch on context when and why occurs. its also variable of session 1-session2--session 3 has some relation to predict continuity and or reversal . in an established higher time reference range balance trade occurs.but considering oppurtunity cost this zone with small range not to be traded as least oppurtunity exist.axism of trade =test of top and bottom .now with spring action by thrust imbalance break that zone at top or at bottom ,attracting further buyer/seller and another new equilibrium attempt is made,however strong media hype can fuel addition of new buyer/seller. distribution of capital is another theme..expectation factor/ma study as suitable smoothing is helpful[50dma certainly guide idea of intermediate term].u have to take biasness of higher time to check tenacity.also durability of cash flow and how much r left out or sitting idle??
at top of range ,some times range expansion occurs .this is key for a trendiness.at what pt shortplayer throws towels...book loss gives strong up move[thrust like yesterday]
similarly at unfair low and after stop loss triggered by battered bull ;.....buy comes after some day from mature fund managers......as bigger sell no more exist .
hence i repeat-TOP SIDE HAS UP BIAS, 3BOTTOM ZONE ...BEARISH
.....hence both offset of unnatural high and unnatural low offer oppurtunity to observer/experienced trader
factor: with growth of media and internet , investment money comes instantly to market after news.
a mix up in various timeframe player ,hype by media, fear of individual make trading a complex process .
..hence money flow is most critical element as in upmarket, money and index both r up
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hence visualise near term activity
study market's current condition
understand participant's vs. watcher's role .......range idea ,balanced zone
next comes can u watch price and learn and predict?
still its difficult to say ...a break out is going to be beginning of new trend......but thats the aim
.....................................so normally unless normal signal is not valid,..short the same trade in smaller size .....allow it to move to price restoration .....again take small position and watch
.....hence this 2 factor ..1[price and 2]participant r governing factor......when phenomena is controlled by price ....its better to buy at break pt after break out.....also sell by fade at rally.
memember money flow is mother of all activity .longer timeframe has more control ...to guide duration.calculate different av [ma] to continuity in intermediate term
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something is repeated from last post to give emphasis,-essence of trading is given
, :sos: