Are some price patterns manipulated?

beginner_av · #21 10th February 2007, 04:35 PM

example of the above is the recent IVRCL.....

another observation is that watch is the last hour bar...if biggies are taking it home, and a black candle doesnt appear...there's a higher chance that breakout will continue next day morning....
whether it will last till next day evening is a different story altogether.

bvpraveen · #22 10th February 2007, 05:01 PM

Hello Avi,

Quote:

Some more observations...

They were good observations. I wasn't aware of some observations which you'd mentioned. Learning more from you each time.

Quote:

breakouts in non-FNO stocks in india are much more reliable as with FNO available, large guys can quickly move in for leveraged counter trend action, and since it is not cash settled, can really hammer the stock.

Ok. Meanwhile how about they using leverage to the advantage of the breakout, ie., going by the direction of the breakout. Doesn't it will give strength to the move. Of course, their sell at one stage after the breakout will impact the same trend. ??

Quote:

Just novice observations...

I don't think so.

Thanks and regards,
Praveen.

bvpraveen · #23 10th February 2007, 05:05 PM

Quote:

Originally Posted by beginner_av

example of the above is the recent IVRCL.....

another observation is that watch is the last hour bar...if biggies are taking it home, and a black candle doesnt appear...there's a higher chance that breakout will continue next day morning....
whether it will last till next day evening is a different story altogether.

Yes, I agree on this.

But most of them are looking at the EOD's volume as a whole during breakout. If the volume is high during the breakout, then its considered valid generally. So doesn't it fuel the buy pressure, even when the conditions which you mentioned above doesn't happen?

For eg., if we look at HDFC breakout(which was discussed in detail in "Pattern trading" thread), the volume on the following day was high. But if you look at them in 3-min chart, the volume rise was only for ONE bar, somewhere in the middle of the course.

Praveen.

beginner_av · #24 10th February 2007, 05:06 PM

Ya praveen,

thats the name of the game...u really dont know which way they will sway...ur observations are correct...thats how a big move is fuelled initially...but as i become aware of more systems and see more data of past trades, i realize that many system has built in profit targer of 5 - 7% and square off...many square off if there's parabolic rise or climax like price action in 30 min charts and so on...

so its better to be well informed....u can tighten the stops accordingly.

beginner_av · #25 10th February 2007, 05:13 PM

Most professionals look at 5 mins to 15 min chart if not tick data...and yes i started searching for these only after i also did what we all do and got kicked...
of course many breakouts do work, but its better to keep your eyes open..

i wouldnt have taken hdfc on first day because of candle's wick or shadow on top, knowing that selling has happend...would have waited for next day's opening and put a buy stop order over last day's high...if it doesnt happen, leave it...
of course there are millions methods to trade.

bvpraveen · #26 10th February 2007, 05:19 PM

Quote:

Originally Posted by beginner_av

Ya praveen,

thats the name of the game...u really dont know which way they will sway...ur observations are correct...thats how a big move is fuelled initially...but as i become aware of more systems and see more data of past trades, i realize that many system has built in profit targer of 5 - 7% and square off...many square off if there's parabolic rise or climax like price action in 30 min charts and so on...

so its better to be well informed....u can tighten the stops accordingly.

I too came across at some place(i think its by Bulkowski in his book - "Encyclopedia of chart patterns") where he tells that prices usually doesn't move much above 5% after breakout.

I wonder how far they are true in real time, at least in Indian markets.

Praveen.

rs randhawa · #27 10th February 2007, 07:50 PM

I too have heard of it but cant say anything to substantiate it.

beginner_av · #28 10th February 2007, 09:07 PM

hey,

dont read too much into this 5%...the best way to do is take past data and analyze it and see the type or occurences..and that will jut be a statistic...nothing much..nothing less...but market conditions change...and so do reference points.
i think u get the message

edit: i meant hint...not messsage...so that you can take it up from there...

bvpraveen · #29 10th February 2007, 09:15 PM

Quote:

Originally Posted by beginner_av

hey,

dont read too much into this 5%...the best way to do is take past data and analyze it and see the type or occurences..and that will jut be a statistic...nothing much..nothing less...but market conditions change...and so do reference points.
i think u get the message

Ok...

Praveen.

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