Technical Trading Corner

[primitivetrader]

i will be using this space to consolidate my thoughts, views and knowledge. there may not be sequence or rhythm in posting.

 

[primitivetrader]

oscillators:

1. derivatives of price.
2. most useful in active swinging markets.
3. have less value in low volatility environment.
4. most commonly used to highlight retracements after an impulse moves, as well as to indicate loss of momentum (appears as divergence).
5. are good indication of OB/OS conditions in ranging market.
6. can be used for confirmation of a price breakout if they make a new momentum high/low along with price making new high/low.
7. pick one osc and stick to it.

 

[primitivetrader]

pullbacks & breakouts:
as per me there are only 2 ways to trade any market any time frame. either pullback trade or breakout. both work well on any time frame any market. the key to success is to try to define them objectively as much as possible.
define pullbacks and only look for them in overall context of the trend. retracments which are not pullback are patterns and breakout entries are possible with patterns. i don't look for big pullbacks and large patterns, not comfortable with them and not able to define them objectively.
one way of defining pullback is to restrict the number of bars in pull let say max 3 bars excluding inside bar(s). the pullback should be smooth and without having any pivots among price bars. one can refer to jeff cooper gann 1-2-3-4 trading set up or joe ross book "trading the ross hook".

same i do with regard to patterns. i objectively define how many bars and how many pivots i can consider to eliminate complex patterns.

 

[primitivetrader]

time frames:
a day trader operates in 3 time frames and they are not chart intervals. from an optimum trading performance these 3 time frames are very imp and interlinked. even if one is missing - optimum trading performance will not come.
these three time frames are:

1. before - quality preparation
2. during - effective execution
3. after- accurate self assessment

 

[primitivetrader]

 

[primitivetrader]

http://imgur.com/i0xcrVG

 

[primitivetrader]

 

[primitivetrader]

Trends:

broadly there are 3 kinds of trends:

1. pa trend- this is bar to bar trend hh hl or lh ll on each bar sequentially.
2. pivot trend- this could be gann 1 bar/2bar or 3 bar trend. best is to use 1 bar trend as its the basic start of pivot trend.
3. contextual trend- this is by far the most imp trend to know about as its decide in which direction one need to trade. moving averages are best to define contextual trend. they are lagging in nature that is a good bar as previous 2 trends are not.

integration of above three trends is an excellent way to read the market and serve to keep trader on the right side of trend. in inraday it gives you the edge and time to align the entry with the trend. there is no hurry to punch the trade. momentum would be always with the trade.

 

[primitivetrader]

candlesticks:
an excellent way to identify reversal on any time frame. basic misunderstanding is that there are too many candlesticks reversal patterns and its very hard to remember them. this is not correct. if one understand the psychology and logic behind candlesticks reversal then its very easy to read them at turning points.
following are the 5 most imp double candlesticks patterns for me on both bull and bear side.

1. engulfing
2. sash
3. piercing line
4. counter attack
5. separating line

 

[primitivetrader]

momentum: