TO LEARN SOME ACADEMIC REF IS GIVEN BELOW
....................................................................
1] Van K Tharp -supertrader,how to grade u
Financial freedom-what to if u want to be trader
2]Jack D schwager(market wizards series)- 1st time told me imp of MM, clarified for success different method exists ,u have to fit u and in ur comfort zone
3]Elder Alexander-trading 4 living,trading room- a real fascinated story on how to trade,
entry-exit,0 imp of mechanical trade and rational thought process
4]Mark Douglas( Disciplined Trader,trading in the zone)- it clarifies particular psychological thought process of a novice to a trade learner
5]Candlesticks (steve nison)- basic on candle
6]Al brooks - Lance Beggs (price Action)- helps to start price study is imp,but video is better , more imp i find trend dynamics course also i read and found useful works of MARTIN PRING
MOST USEFUL I FIND -PHANTOM OF PIT.
...............................................................
All counter trend trader use SMALL stop, High probability, high reward/risk ratio.Demand -supply mismatch on a particular pivot is key. YES THEY HAVE SEEN ENOUGH -moreover that style suit them.
USE OF Timeframe"- first of any move (new) must be in intraday- when some typical momentum , cause X over a localised HIGH/low value - we may say it has higher potential to moveup or down accordingly- this is key theme on trend.IF that thrust easily cut higher pivot- we play for trend ,as then that is HIGH PROBABILITY.
As thrust must come from speed or High volume - that is observation by experience, some modern trader , themselves programme it in search mode(scanner).
Same concept can be upheld by DAILY ,as well as WEEKLY(as longterm bull market arrives).
Most indicator's use r known to a few person. Say William%R deals biasness of close.So it can be use for Turning pt.
Similarly ADX bias(i use aroon instead)- suggest me to understand strength of trend.
............................................
Trade management is a continuous process - with Market u adopt, not vice versa.
A good trader is nothing but a good risk manager first.
Is there any other way of safe trading ???
Yes,Yes,Yes.- its pullback trade.
Many a oldtimer confuse its with swing . also cup& handle- handle bottom for going long.
Idea is when main direction is established , in 1st pull back u buy.
Pl see Siemens i recently traded 18.9.13 as pullback buy which gives me good money .The way it breaks 450 , it has strong uppotential , so when it come back to 468/- i enter long to make an easy money.
Idea is THRUST-PULLBACK-TARGET =1-2-3 OR A-B-C.
This is known to many old trader as their bread & butter.Mcmohan of OTA fame popularises it.Also SAFETY IN THE MARKET in 2005 sold them as propiety tool with guaranteed trade @ 45000/- with 2day training.But i prefer eyeballing as discreationary trader and see clearly in the context of Present market.
Landry of tradingmarkets.com once add upthrust , after pullback as his swing trading technique (creating a delhi based snakeoil vendor tv artist)
Many old school uses its variety in TREND channel trading ,as buying at support of trendline.
Modern players use also FIB as anticipatory trend turning pt for short term trade, with lower Fib value as stop .
Can be used as stand alone technique , provided market condition is neutral
Master trader as experienced by Mark CRISP also play in down trend for short, while it approaches higher pivot.
To see imp pivot ,just use line chart on EOD - its crystal clear.
In resistance zone, use candle - is it Doji, small body? So momentum is less ,so at the first sign of Bearish Engulf ,JOIN short .Trade what u see.
2] Gap in EOD ,for unfilled price, has a strong reflection . Up GAP means strong greed,so when that gap ,trade in direction of Gap.
3] Difference between Correction & downtrend is retracment value. Higher the value , known as Down trend- Nobody can effectively tell it(mind it Nobody)- its better to watch with cash, watching the downthrust -the speed at which its falling ,can give us some guideline for deep discount buy zone or after breaking lower low pivot, arrival of bear trend.Best sign i found Good result of company,but No uprise in price= bear market starts
.............................
Sentiment indicator as well as slope of MA ,helps us to understand TREND.
IN uptrend market ,pull back buy works best. In volatile market- buy low sell high works better. In secular bull market(buoyant economy 10%GDP) only break out works.
Whether to play a LONG or short- depends on TREND of market ,+ fundamental of economy.
BUY zone for long & SELL zone for short- r strategic pt to keep eye. Variations is Context of present scenario- what will happen THIS time(present tactical move)
Use of 2MA to see strength or diminishing of trend(converging = diminishing)
Defining timeframe u predict , time available to trade, Time & place to study for Market- r strategic factor.
Your flexibility /confidence comes with experience .Nuisance of market only can be understood watching 10000hr of chart,if not more.
I used a software OMNITRADER to play last 1 yr data ( suppress rightside and then predict bar by bar 1 bar at a time ,) to convert a random event in certain predictive mode.
Your memory bank ,must know HOW to react quickly on a particular condition.
Some trading firm(Capstone) propiety trade on orderflow data /also train on simulation .
But they have very strong RISK Management dept- hire & fire is motto. (to save ur job ,u have to perform -no luxury)
Since as a normal isolated trader ,u r urself Risk manager- Highest priority given to Risk management.
1] daily loss limit,
2] % loss limit per trade
3] portfolio loss limit
4] NUMBER of position
Since position size can easily be programmed /calculated - its should be part of discipline or mechanical.
Since Trading heavily dominated by psychology (atleast i believe)- use PMA .some stress buster.
Visualization or scenario preparation for next day, really helps in market hr, Deer stiffness by night head light (analysis paralysis)- must not be there for a trader.If u r parttime trader, main tool/time is study at weekend.& play on daily as per set up & plan ,prepared by u.
Price reflects emotion of participants=novices.Take best measure to stop ur emotional reaction to market. This we learn from experience.Disciplinedtrader.com given some tool to control
- basic idea is i shall not react to market. i shall not abuse myself for wrong. I shall not afraid to take at support. I shall book profit at my target. I must not use hope in trading.I must potential trade before(tradeplan action guideline). I shall put chart to keep by record my reason of winning as well as losing trade.
No1 part of any system is I -, no 2 element MARKET ,
no 3 is -SYNCRONISATION WITH MARKET
i must spend time to change , behaviorial problem if any.
Entry -exit & reason ,as well as set up validity must be checked in present market context.I must create a strong mind so that other's talk cant influence my trading decision.Market earning will guide , whether i am in right path or not.
depending on market volatility & understanding of market , i define position size.
Experimental Trade - value 1lakh. Dont understanding market = o position.
Busy in other part of personal life , no new position.
Long market - normally 2 position ,4 max.
Bear Market - normally 1 position , trade size - bigger. if initial trade Right.(pref Nifty put)
At imp low - priority to take new position on defined good stock ,
- large or mid cap.( Max 4)
If not clear on market , study fundamental of company to understand whose result r showing better in last Quarter. Whose technical r stronger compare to Nifty(shining the blade )
So major risk management- sit on cash
...................................
How to find opportunity
1] by observing basic fundamental list of about 100 stocks which was traded in past with RIGHT or Wrong- not inventing new stocklist ( never to new issue)
2] Sector which r showing strength as per RSC in metastock monthly scan with nifty
3] For intraday trade ,stock which is shown some wide bar activity yesterday without known published reason. So play against or FOR the momentum with 1% quick move, at predefined entry - based on last night analysis.
.................................................. ...............
General observation on market :
Imp support /resistance on weekly chart for predefined list. Price behavior in hr chart ,near to that value.
News on economic event/ national event which may affect market.
Imp NO- not to listen to tv.
...........................................
My Swing Trading system
...........................................
Normally its for nifty and some of defined stock which behave similar to nifty.
Also when nifty defined no fall zone, extra long position can be taken on midcap ,whose last quarter result not bad.
1] for nifty ,it must be imp lower pivot .for long
2] FOR short- at new high ,also divergence suggests fall , candle suggests no further up momentum. After initiation of position ,confirm of trade direction ,add PUT on current month . for STOP ,predetermined written stop .
3] Stock short - must be in Resistance zone ,not at NEW high.In candle - doji or engulf bear . Also max 2 days or hitting time stop on 3rd day. Stop = 1.5 atr
So 1oo% profit book on 3rd day or 100% get out . No hope factor. In case of right for short . Also find other short candidate , who r hitting resistance with similar candle pattern.
4] For Long stock - as its my bread & butter, i take main position in deep support ,after favourable candlebar. Also may play pull back buy in anticipated upswing on particular pattern. i prefer W.
5] Rarely on quick formed continuation pattern like pennant/triangle - in case of strong bullish market visualisation also take quick long break out style trade.(only on particular stock whose behavior i have seen years before - so i assume to know this stocks DNA, though market may prove Wrong on that trade)
..................................
Reflection on Pattern
...................................
As price study -core of TA , combination of many bars also may say u something.So knowledge of same must be part of system .
1] single bar - just see any candle.
its wick on top, at high will burn down the candle , to bring the price Lower.
Its TAIL will help the baby monkey to moveup . So tail is a pt of buy interest.
Breaking of previous wick(top)- suggest upprice BIAS.
Similarly breaking of UPpivot- suggest uptrend tendency.
Hammer at bottom has Strong BIAS to turn reversal.
2] COMBINATION BAR
morning star at support zone - gives strong upbias. Also 2 bar pattern BULLISH ENGULF.
similarly Evening star at Top, in a Resistance zone - a deadly combination for short. You may play with Bear engulf also.
.................................................. ........................................
OTher Price Pattern
IF u see many a chart - u see DOUBLE TOP, TRIPLE TOP, HEAD & SHOULDER,SHOULDER -HEAD & SHOULDER - ALL R SIMILAR .
1] AFTER making twice attempt of High - price is falling
2] after making thrice attempt of similar high-price is falling
3]AFTER making twice attempt of High, 2nd one less than first, - price is falling
4]after making 3 attempt of high, out of which 2nd one is BIGGER attempt-price is falling
So u should be ready for SHORT , as they r forming. Now You the great programmer -plans to automize it. Do u know after a strong move up, This pattern may look like a TRIANGLE /Pennant , also a FLAG pole attached - big pictures of many Bars - gives it a strong CONTINUATION pattern.So context is imp . Whether to long or short? Just see the HR chart- any break out on day , must be created in HOURLY chart first.word can not express it. Picture is 1000 times powerful.If u can spend some chillers, u may get to SEE video of trade /advance TA through CorporateBridge- to replicate similar trade.
.................................................. ...
Why i prefer 5/20 MA?
Ans: 5 is for weekly- so small change in price ,compare to 5days r reflected. Similarly for 20 day . And their combination tells me how price is change in mini-scale for week/month.Their converse tells me NO strength in price, their Divergence - suggests me
STRENGTH(momentum) ahead in price,- deciding holding my winner.Pricing cutting 5DMA suggests -TREND IS OVER. Pl understand difference between trend is weak vs. TREND is OVER- no more trade in that direction with immediate effect.
In delivery based trading fundamental grasp is must.
let us talk........Trader A.......definitely can understand.........what is coming due to change in economy/sector/company management/order flow...........Now whether to get that understanding......he gets it through Delegation(buying report/exceptional individual who understand sector/individual company revival)........or through self analysis.......or buying seeing higher time frame chart.....in which MA showing particular inclination OR REL STRENGTH IN COMPARISON.........Mode may be different.......PURPOSE IS SEARCH FOR CANDIDATE OF LONG HAUL.
YES ITS REQD........LITTLE BIT DIFFERENT MIND FRAME THAN SHORT TERM TRADE.
simplest literature........i think of MARK BOUCHER.......trainer of Fund Mater.
It should be aimed only after learning proper trade,not mixing different time frame,Discipline mastery.
no 1..........understanding in fundamental ..........whether Money shall come in the country.
No2.........if money comes , which sector.........which particular company??
no3.........whether u can make SWOT on that sector.....or if other good FA has
done for u,....but u can check that like an auditor.
no4.......At what condition /visualisation major stake holder/promoter buy or selling that counter?
...................................
Time again i have told.........past data......has no value in fundamental .So modelling dont work in financial market,apart from M &A.
Fundamental helps to create a value zone.......which may be useful to buy at big fall, provided u understand that fall is temporary.
support, MA , Fib,reversal bar, any momentum tool to understand reversal at bottom ...........i found them with some use.
....................................................................
1] Van K Tharp -supertrader,how to grade u
Financial freedom-what to if u want to be trader
2]Jack D schwager(market wizards series)- 1st time told me imp of MM, clarified for success different method exists ,u have to fit u and in ur comfort zone
3]Elder Alexander-trading 4 living,trading room- a real fascinated story on how to trade,
entry-exit,0 imp of mechanical trade and rational thought process
4]Mark Douglas( Disciplined Trader,trading in the zone)- it clarifies particular psychological thought process of a novice to a trade learner
5]Candlesticks (steve nison)- basic on candle
6]Al brooks - Lance Beggs (price Action)- helps to start price study is imp,but video is better , more imp i find trend dynamics course also i read and found useful works of MARTIN PRING
MOST USEFUL I FIND -PHANTOM OF PIT.
...............................................................
All counter trend trader use SMALL stop, High probability, high reward/risk ratio.Demand -supply mismatch on a particular pivot is key. YES THEY HAVE SEEN ENOUGH -moreover that style suit them.
USE OF Timeframe"- first of any move (new) must be in intraday- when some typical momentum , cause X over a localised HIGH/low value - we may say it has higher potential to moveup or down accordingly- this is key theme on trend.IF that thrust easily cut higher pivot- we play for trend ,as then that is HIGH PROBABILITY.
As thrust must come from speed or High volume - that is observation by experience, some modern trader , themselves programme it in search mode(scanner).
Same concept can be upheld by DAILY ,as well as WEEKLY(as longterm bull market arrives).
Most indicator's use r known to a few person. Say William%R deals biasness of close.So it can be use for Turning pt.
Similarly ADX bias(i use aroon instead)- suggest me to understand strength of trend.
............................................
Trade management is a continuous process - with Market u adopt, not vice versa.
A good trader is nothing but a good risk manager first.
Is there any other way of safe trading ???
Yes,Yes,Yes.- its pullback trade.
Many a oldtimer confuse its with swing . also cup& handle- handle bottom for going long.
Idea is when main direction is established , in 1st pull back u buy.
Pl see Siemens i recently traded 18.9.13 as pullback buy which gives me good money .The way it breaks 450 , it has strong uppotential , so when it come back to 468/- i enter long to make an easy money.
Idea is THRUST-PULLBACK-TARGET =1-2-3 OR A-B-C.
This is known to many old trader as their bread & butter.Mcmohan of OTA fame popularises it.Also SAFETY IN THE MARKET in 2005 sold them as propiety tool with guaranteed trade @ 45000/- with 2day training.But i prefer eyeballing as discreationary trader and see clearly in the context of Present market.
Landry of tradingmarkets.com once add upthrust , after pullback as his swing trading technique (creating a delhi based snakeoil vendor tv artist)
Many old school uses its variety in TREND channel trading ,as buying at support of trendline.
Modern players use also FIB as anticipatory trend turning pt for short term trade, with lower Fib value as stop .
Can be used as stand alone technique , provided market condition is neutral
Master trader as experienced by Mark CRISP also play in down trend for short, while it approaches higher pivot.
To see imp pivot ,just use line chart on EOD - its crystal clear.
In resistance zone, use candle - is it Doji, small body? So momentum is less ,so at the first sign of Bearish Engulf ,JOIN short .Trade what u see.
2] Gap in EOD ,for unfilled price, has a strong reflection . Up GAP means strong greed,so when that gap ,trade in direction of Gap.
3] Difference between Correction & downtrend is retracment value. Higher the value , known as Down trend- Nobody can effectively tell it(mind it Nobody)- its better to watch with cash, watching the downthrust -the speed at which its falling ,can give us some guideline for deep discount buy zone or after breaking lower low pivot, arrival of bear trend.Best sign i found Good result of company,but No uprise in price= bear market starts
.............................
Sentiment indicator as well as slope of MA ,helps us to understand TREND.
IN uptrend market ,pull back buy works best. In volatile market- buy low sell high works better. In secular bull market(buoyant economy 10%GDP) only break out works.
Whether to play a LONG or short- depends on TREND of market ,+ fundamental of economy.
BUY zone for long & SELL zone for short- r strategic pt to keep eye. Variations is Context of present scenario- what will happen THIS time(present tactical move)
Use of 2MA to see strength or diminishing of trend(converging = diminishing)
Defining timeframe u predict , time available to trade, Time & place to study for Market- r strategic factor.
Your flexibility /confidence comes with experience .Nuisance of market only can be understood watching 10000hr of chart,if not more.
I used a software OMNITRADER to play last 1 yr data ( suppress rightside and then predict bar by bar 1 bar at a time ,) to convert a random event in certain predictive mode.
Your memory bank ,must know HOW to react quickly on a particular condition.
Some trading firm(Capstone) propiety trade on orderflow data /also train on simulation .
But they have very strong RISK Management dept- hire & fire is motto. (to save ur job ,u have to perform -no luxury)
Since as a normal isolated trader ,u r urself Risk manager- Highest priority given to Risk management.
1] daily loss limit,
2] % loss limit per trade
3] portfolio loss limit
4] NUMBER of position
Since position size can easily be programmed /calculated - its should be part of discipline or mechanical.
Since Trading heavily dominated by psychology (atleast i believe)- use PMA .some stress buster.
Visualization or scenario preparation for next day, really helps in market hr, Deer stiffness by night head light (analysis paralysis)- must not be there for a trader.If u r parttime trader, main tool/time is study at weekend.& play on daily as per set up & plan ,prepared by u.
Price reflects emotion of participants=novices.Take best measure to stop ur emotional reaction to market. This we learn from experience.Disciplinedtrader.com given some tool to control
- basic idea is i shall not react to market. i shall not abuse myself for wrong. I shall not afraid to take at support. I shall book profit at my target. I must not use hope in trading.I must potential trade before(tradeplan action guideline). I shall put chart to keep by record my reason of winning as well as losing trade.
No1 part of any system is I -, no 2 element MARKET ,
no 3 is -SYNCRONISATION WITH MARKET
i must spend time to change , behaviorial problem if any.
Entry -exit & reason ,as well as set up validity must be checked in present market context.I must create a strong mind so that other's talk cant influence my trading decision.Market earning will guide , whether i am in right path or not.
depending on market volatility & understanding of market , i define position size.
Experimental Trade - value 1lakh. Dont understanding market = o position.
Busy in other part of personal life , no new position.
Long market - normally 2 position ,4 max.
Bear Market - normally 1 position , trade size - bigger. if initial trade Right.(pref Nifty put)
At imp low - priority to take new position on defined good stock ,
- large or mid cap.( Max 4)
If not clear on market , study fundamental of company to understand whose result r showing better in last Quarter. Whose technical r stronger compare to Nifty(shining the blade )
So major risk management- sit on cash
...................................
How to find opportunity
1] by observing basic fundamental list of about 100 stocks which was traded in past with RIGHT or Wrong- not inventing new stocklist ( never to new issue)
2] Sector which r showing strength as per RSC in metastock monthly scan with nifty
3] For intraday trade ,stock which is shown some wide bar activity yesterday without known published reason. So play against or FOR the momentum with 1% quick move, at predefined entry - based on last night analysis.
.................................................. ...............
General observation on market :
Imp support /resistance on weekly chart for predefined list. Price behavior in hr chart ,near to that value.
News on economic event/ national event which may affect market.
Imp NO- not to listen to tv.
...........................................
My Swing Trading system
...........................................
Normally its for nifty and some of defined stock which behave similar to nifty.
Also when nifty defined no fall zone, extra long position can be taken on midcap ,whose last quarter result not bad.
1] for nifty ,it must be imp lower pivot .for long
2] FOR short- at new high ,also divergence suggests fall , candle suggests no further up momentum. After initiation of position ,confirm of trade direction ,add PUT on current month . for STOP ,predetermined written stop .
3] Stock short - must be in Resistance zone ,not at NEW high.In candle - doji or engulf bear . Also max 2 days or hitting time stop on 3rd day. Stop = 1.5 atr
So 1oo% profit book on 3rd day or 100% get out . No hope factor. In case of right for short . Also find other short candidate , who r hitting resistance with similar candle pattern.
4] For Long stock - as its my bread & butter, i take main position in deep support ,after favourable candlebar. Also may play pull back buy in anticipated upswing on particular pattern. i prefer W.
5] Rarely on quick formed continuation pattern like pennant/triangle - in case of strong bullish market visualisation also take quick long break out style trade.(only on particular stock whose behavior i have seen years before - so i assume to know this stocks DNA, though market may prove Wrong on that trade)
..................................
Reflection on Pattern
...................................
As price study -core of TA , combination of many bars also may say u something.So knowledge of same must be part of system .
1] single bar - just see any candle.
its wick on top, at high will burn down the candle , to bring the price Lower.
Its TAIL will help the baby monkey to moveup . So tail is a pt of buy interest.
Breaking of previous wick(top)- suggest upprice BIAS.
Similarly breaking of UPpivot- suggest uptrend tendency.
Hammer at bottom has Strong BIAS to turn reversal.
2] COMBINATION BAR
morning star at support zone - gives strong upbias. Also 2 bar pattern BULLISH ENGULF.
similarly Evening star at Top, in a Resistance zone - a deadly combination for short. You may play with Bear engulf also.
.................................................. ........................................
OTher Price Pattern
IF u see many a chart - u see DOUBLE TOP, TRIPLE TOP, HEAD & SHOULDER,SHOULDER -HEAD & SHOULDER - ALL R SIMILAR .
1] AFTER making twice attempt of High - price is falling
2] after making thrice attempt of similar high-price is falling
3]AFTER making twice attempt of High, 2nd one less than first, - price is falling
4]after making 3 attempt of high, out of which 2nd one is BIGGER attempt-price is falling
So u should be ready for SHORT , as they r forming. Now You the great programmer -plans to automize it. Do u know after a strong move up, This pattern may look like a TRIANGLE /Pennant , also a FLAG pole attached - big pictures of many Bars - gives it a strong CONTINUATION pattern.So context is imp . Whether to long or short? Just see the HR chart- any break out on day , must be created in HOURLY chart first.word can not express it. Picture is 1000 times powerful.If u can spend some chillers, u may get to SEE video of trade /advance TA through CorporateBridge- to replicate similar trade.
.................................................. ...
Why i prefer 5/20 MA?
Ans: 5 is for weekly- so small change in price ,compare to 5days r reflected. Similarly for 20 day . And their combination tells me how price is change in mini-scale for week/month.Their converse tells me NO strength in price, their Divergence - suggests me
STRENGTH(momentum) ahead in price,- deciding holding my winner.Pricing cutting 5DMA suggests -TREND IS OVER. Pl understand difference between trend is weak vs. TREND is OVER- no more trade in that direction with immediate effect.
In delivery based trading fundamental grasp is must.
let us talk........Trader A.......definitely can understand.........what is coming due to change in economy/sector/company management/order flow...........Now whether to get that understanding......he gets it through Delegation(buying report/exceptional individual who understand sector/individual company revival)........or through self analysis.......or buying seeing higher time frame chart.....in which MA showing particular inclination OR REL STRENGTH IN COMPARISON.........Mode may be different.......PURPOSE IS SEARCH FOR CANDIDATE OF LONG HAUL.
YES ITS REQD........LITTLE BIT DIFFERENT MIND FRAME THAN SHORT TERM TRADE.
simplest literature........i think of MARK BOUCHER.......trainer of Fund Mater.
It should be aimed only after learning proper trade,not mixing different time frame,Discipline mastery.
no 1..........understanding in fundamental ..........whether Money shall come in the country.
No2.........if money comes , which sector.........which particular company??
no3.........whether u can make SWOT on that sector.....or if other good FA has
done for u,....but u can check that like an auditor.
no4.......At what condition /visualisation major stake holder/promoter buy or selling that counter?
...................................
Time again i have told.........past data......has no value in fundamental .So modelling dont work in financial market,apart from M &A.
Fundamental helps to create a value zone.......which may be useful to buy at big fall, provided u understand that fall is temporary.
support, MA , Fib,reversal bar, any momentum tool to understand reversal at bottom ...........i found them with some use.
