Million $ question

aca_trader · #11 27th March 2007, 12:54 AM

Quote:

Originally Posted by karthikmarar

If there was one, the stock market would not exist ..

Even if such a method were existing, the market can exist iif the Market partcipants are not aware of such a method (even if a few are unaware, trading would take place) or even if all the market participants are aware of the method, they have differing opinions as to its efficiency.

Agilent · #12 27th March 2007, 10:38 PM

Quote:

Originally Posted by aca_trader

Well! anybody who experiements can see the results. Those are fascinating in trending markets and as we are talking about buying on dips or selling on reaction rallies, non-trending markets are out of question.
BTW, There is nothing foolproof. Whipsaws will certainly be encountered but they will be far and few.

In a H&S formation period, the trendline will be broken after formation of the head and thus one will get an early entry with a SL at the last pivot (The Head).

Excise me Ashish but where does a trendline fit in , in H&S patterns

I thought its the breaking of the neckline (which has nothing to do with trendlines) which signals the reversal

See this for ready referencehttp://www.chartpatterns.com/headandshoulders.htm
what do u say

AGILENT

aca_trader · #13 27th March 2007, 11:29 PM

Quote:

Originally Posted by Agilent

Excise me Ashish but where does a trendline fit in , in H&S patterns

I thought its the breaking of the neckline (which has nothing to do with trendlines) which signals the reversal

See this for ready referencehttp://www.chartpatterns.com/headandshoulders.htm
what do u say

AGILENT

First of all, Neckline is also a trend line. ON number of times, neckline is upward sloping . Even a flat support line is a Flat Trend line indicating that trend is flat. ( No Trend)

Please check the chart attecahed to see how trendline helps in an early entry during H&S formation. All H&S formations which take place after a fair degree of upward trend (Reverse H&S in downtrend) will depict this phenomenon.

Best Regards,
--Ashish

Agilent · #14 28th March 2007, 09:30 AM

Quote:

Originally Posted by aca_trader

First of all, Neckline is also a trend line. ON number of times, neckline is upward sloping . Even a flat support line is a Flat Trend line indicating that trend is flat. ( No Trend)

Please check the chart attecahed to see how trendline helps in an early entry during H&S formation. All H&S formations which take place after a fair degree of upward trend (Reverse H&S in downtrend) will depict this phenomenon.

Best Regards,
--Ashish

Before i respond in detail, Ashish, can u pl cite some theoretical evidence to support yr theories viz
- that a trendline other than neckline comes into play in an H&S, and
- that the sell trigger in Bull market H&S arises from a breach of the trendline (as illustrated by you) rather than the neckline

Maybe you can also furnish some other chart as example

Thanks
AGILENT

aca_trader · #15 28th March 2007, 10:56 AM

Quote:

Originally Posted by Agilent

Before i respond in detail, Ashish, can u pl cite some theoretical evidence to support yr theories viz
- that a trendline other than neckline comes into play in an H&S, and
- that the sell trigger in Bull market H&S arises from a breach of the trendline (as illustrated by you) rather than the neckline

Maybe you can also furnish some other chart as example

Thanks
AGILENT

Well! First of all I am not saying that a trendline other than neckline comes into play in an H&S neither I am saying that in an H&S formation entry is triggered by breach of trendline instead of neckline.

What I am trying to convey that in cases where a stable upwards trend has been in exitence before formation of H&S pattern, an entry from short side after breach of Trendline would provide an early entry in comparison to entry after breach of neckline.

There are a no. of charts on which this phenomenon can be seen. Please study the charts and this will come clear to you. Attached is one for your reference. Even if you apply the trendline on theoratical charts shown on the website referenced by you yesterday, you will see that it's true. (Picture downloaded from that site attached after drawing trendline on it.)

BTW, I have not come across any theoratical evidence as to it as there is a tendency among writers to describe patterns in isolation classifying them in reversal & continuation patterns.

Regards,
--Ashish

uasish · #16 28th March 2007, 11:27 AM

Agilent,
Until LS full formation there may be a breach in the trendline,this is what Ashish wants to convey,now before the LS's full formation it may not come down at all ,rather go up to go past its H & negate our H&S frormation,but in that case also we have that trendline to protect with a Stop Loss.But say the LS is formed & moreover neckline broken then think of the potential gain that Short entry would have given,with minimum % Risk ,Reward can be Gr8,
this is what Ashish wants to point out to us.

Asish

omkarmango · #17 28th March 2007, 11:44 AM

Quote:

Originally Posted by aca_trader

First of all, Neckline is also a trend line. ON number of times, neckline is upward sloping . Even a flat support line is a Flat Trend line indicating that trend is flat. ( No Trend)

Please check the chart attecahed to see how trendline helps in an early entry during H&S formation. All H&S formations which take place after a fair degree of upward trend (Reverse H&S in downtrend) will depict this phenomenon.

Best Regards,
--Ashish

Dear Ashish,

Don't you think, H&S pattern is nothing but the formation occurs at the end of five waves formed according to Elliott. i.e.

Top of the Third wave wave, = Shoulder 1
Top of the Fifth wave = Head
Recovery before the bear phase (OR wave B either) = Shoulder 2

U can find this most of the times, even in images posted by you

Regards
Omkar

uasish · #18 28th March 2007, 01:47 PM

omkarmango,
Plz do not generalise Elliot Wave as presented by Mr R N Elliot.

Asish

omkarmango · #19 28th March 2007, 02:15 PM

Quote:

Originally Posted by uasish

omkarmango,
Plz do not generalise Elliot Wave as presented by Mr R N Elliot.

Asish

Agilent · #20 28th March 2007, 02:43 PM

Quote:

Originally Posted by aca_trader

Well! First of all I am not saying that a trendline other than neckline comes into play in an H&S neither I am saying that in an H&S formation entry is triggered by breach of trendline instead of neckline.

What I am trying to convey that in cases where a stable upwards trend has been in exitence before formation of H&S pattern, an entry from short side after breach of Trendline would provide an early entry in comparison to entry after breach of neckline.

There are a no. of charts on which this phenomenon can be seen. Please study the charts and this will come clear to you. Attached is one for your reference. Even if you apply the trendline on theoratical charts shown on the website referenced by you yesterday, you will see that it's true. (Picture downloaded from that site attached after drawing trendline on it.)

BTW, I have not come across any theoratical evidence as to it as there is a tendency among writers to describe patterns in isolation classifying them in reversal & continuation patterns.

Regards,
--Ashish

Ashish .

Assuming for a moment that yr theory is sound (I mean u say yrself there is no theoretical corroboration) , and going by yr own example of Aurobindo Pharma H&S, u will note that the first trendine breach occurs even before formation of the Head !

A short entry on that day would have been disastrous, as u can see

I think we need to debate this carefully

AGILENT

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