My daytrading

Today Tisco behaved very violently.

Broke Low, Broke high again broke low and then again broke high .

However if you followed what Stochs said we would have 1 losing trade and 2 winning trades.

Pointwise comment. May be bit difficult to understand.

1. _divergence - Break of P/L a winning trade.
2. OS_5 Bars - at the same time we have 2 hammers. Still we look at highs to short.Then it goes and makes lower highs even without touching OB zone.I short the break of PL.
3. Stoch makes HIGHER LOW. then it makes higher closes and my stoploss is taken out.
4.OB>5 bars - wait for dip and break of Pivot high we go long.In case one knows what exactly is the end of dip then he can take long even before that pivot break.Lets not discuss that now.

Being conservative we end with up with 8Rs. profit and 2.50 Rs. loss = net Rs. 6.50.

The key is to follow the method religiously by keeping Intuitive, logical and emotional mind away.



Regards
Raghav

Hey Raghav,

Thanks for your reply and am eager to know one more fact, of all the stocks available in Nifty 50 and BSE 30, how did educomp catch your eye. Any specific criteria one should look for in spotting these type of stocks or patterns.

Pls suggest.

_SECTION_BEGIN("Stochastic Slow");
periods = Param( "Periods", 3, 1, 200, 1 );
Ksmooth = Param( "%K avg", 8, 1, 200, 1 );
Plot( StochK( periods , Ksmooth), "%K"+_PARAM_VALUES(), ParamColor( "%K color", colorCycle ), ParamStyle("%K style") );
Dsmooth = Param( "%D avg", 4, 1, 200, 1 );
Plot( StochD( periods , Ksmooth, DSmooth ), "%D"+_PARAM_VALUES(), ParamColor( "%D color", colorCycle ), ParamStyle("%D style",styleDashed) );

_SECTION_END();

Thanks Raje. Really kind of you to help me. Please find attached the chart generated for "EDUCOMP".

This is a 5-min chart and the stoch is shown in the window beneath. I just have a query, Is the pattern same as shown in Raghav's post for "EDUCOMP"?

The OS area in his chart shows more than 5 bars but in this chart it seems to be a bit different, not sure if I have to do some settings in Amibroker. Please let me know.

Link: http://img268.imageshack.us/img268/628/stochg.jpg

Raghav,

Can you please let me know as which software you are using? Also does 3 mean periods, 8 means %K and 4 means %D?

It all depends on who you are and what type of set up you are comfortable with and what gives you more needed confidence.

I am comfortable with few patterns which these stocks generate again and again ( ICICI,TISCO,TATAMOTORS,EDUCOMP) and for me they are easy to read.And they do facilitate this method with high rate of success.

The key is you should extensively study few stocks and just focus on their behaviour for few months.Go through the historical charts for may be last 3 month 6 month or if possible one year again and again and observe .Any timeframe which you are comfortable with. Then all of a sudden you will know what it is likely to do next at any given point of time....


For example. Today at this point of time TATAMOTORS is trading at 765.Its one of my favourite setups. Staircase rally.Now My S/L is @ 761 and I [email protected] now I look for atleast 6 rs move upwards with risk of 3Rs. When you know whats your setup and and whats your losses are ,profits start chasing you automatically.


Regards
Raghav

Thanks Raghav.

Can you please help me understand on what basis (apart from the peaks / troughs of the day) should an intra day target / support price be decided.

Trading is all about what we see rather than what we think.

Few days back in local newspaper I read this quote.
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Success : Doing vey simple things day by day with unprecedented discipline.

Failure: Repeating small and same mistakes again and again.
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Today It was a simple setup in TATA MOTORS.

Our aim is to make very few low risk and high potential trades in a week which is less stressful but more profitable.

I personally do not prefer trading first 1 -1.5 hours unless I see a strong setup early in the morning.Reason - it takes time to build a setup.

1. Stoch stays in OS zone for more than 5 bars. sign of weakness.
Price goes to 21SMA but comes back. Stoch doesn't reach OB zone - so we need to wait for the direction.

2.Point number 2 Stoch makes higher low - sign of strength. Arrow number 3 We have a hammer. Also do note that lower Bollinger band pierced the tail of that hammer. One of my favourite long setup.S/L below the tail of hammer and we are long.I have not added Bollinger Band to this chart to keep the chart non confusing.

3. Stoch in OB>5bars sign of strength.Next our Pivot low is broken and its just + 2.50 Rs. We look for next chance. Its part of game we have to accept.

4.Stoch makes higher low again.I go long above one more hammer keeping the S/L below the tail of the hammer.

6. Here there is no _ve divergence so we need not liquidate the position immediately. we wait.

7.Stoch makes one more higher low .More is left.then when we see wide range bar with huge volume its indication that it can be a buying climax.Get alert. Next bar is a shooting star with good volume. I place my trailing S/L at 80% of that wide rangebar.Its taken out within few minutes.Thats it for the day.

In a week may be twice we get these kind of strong setups. We just do whatever it says. Awarding part we leave it to market. Key is to know "WHAT IS THE RISK".Also trailing stops or taking profit at various points is an art . Myself and you all are learning it day by day by our practice and experience.



Regards
Raghav

This is really great !! On a daily basis, I try to observe these patterns but am making mistakes on a regular basis. I will try refining it again .

Raghav,

This is sincerely a very good effort by you.

I think you are in a way re-iterating a fact that many fail to understand even after being in the market for long. The fact that analysis performs well than some dud system giving buy and sell signals proves that human mind is far capable than some dumb computer system.

I like the way you are integrating different aspects of TA. This is good and will put you light years ahead than most who follow some computer generated systems. Keep it up. Will be watching this thread with interest.

Tc

nice and very informative post.
Just one Qs in S(3,8,4) are they s( "period" , "Ksmooth" , "Dsmooth" )

thanks in adv