Ready to start the journey – help needed to build trading plan...….

actuaryinmaking · #1 3rd October 2008, 09:49 PM

Firstly huge thanks to Saintji for his wonderful wonderful TA guidance thread – as was directed by our forums senior people, with zeal to get into trading I have spent couple of months reading it again and again and have now absorbed it upto some extend (though it has raised lots of questions and doubts as well).….based on that I have put to gather a basic plan to put learning into practice for me.

Also huge thanks to all our senior members to their constant guidance…

At this juncture I need your more guidance and help in clarifying few things still haunting my head…I know lots of my questions may have been already answered in other threads but I am bit energy less at this stage to go through that many posts…as my most energy is been spent in understanding and learning as much I am sharing here…

May I request all seniors to please review my plan and help me with my Qs I have noted next to some items…(including Saintji if he has some more energy after that wonderful thread and many others like that)

Looking for that very encouragement….

- Nisha Sharma (CFA level I & II)

actuaryinmaking · #2 3rd October 2008, 09:52 PM

I. TA Knowledge

Golden Rules:-

1. Trade in trend / Trend is your friend
2. Not to trade without proper understanding and planning followed by sharp execution
3. When in doubt don’t trade get deeper and seek help
4. Understand all about PIVOTS - (Singh !) Pivots are King (..and Saintji's all time favourite!)
5. BUY or go LONG in uptrend
6. SELL or go SHORT in downtrend
7. TA is Price and Volume trend against Time to anticipate future trend. Thanks to Asishji - the Volume to be ignored for first couple of months...as it needs extended understanding otherwise
8. TA is not a holy grail but assumes everything that can be known unto this point in time is already accounted for in price and volume action.
9. Never Risk more then 2% of available balance in each trade
10. Trade no more then few a day.

Basics
1. CANDLESTICKs :

Bullish --> High-Close-Open-Low (Green/White)
Bearish --> High-Open-Close-Low (Red/Back)

2. UPTREND:- Series of Higher Pivot-Lows and Higher Pivot-Highs
3. DOWNTREND :- Series of Lower Pivot-Highs and Lower Pivot-lows
4. TREND TYPE: PRIMARY/LONG/INTERMEDIATE/ SHORT

(Q1: How many continuous bars/candle-sticks of same behavior form a trend? What if two bars are ‘Series of Higher Lows and Higher Highs‘ then again one bar breaks the trend and again two bar of ‘Series of Higher Lows and Higher Highs’) - Having difficulties in clearly identifying Trend..!!!

Thanks - this Qs is answered by reading Saintji's 60 mins thread again and again...

A1: Pivot-Highs and Pviot-Lows are the key - all other bar/candle movement within the trend is rally or declines...as long as PH and PL hold good...the trend is active...game is on...

5. SUPPORT :- Level at which lots of buying interest generated and Price does not fall below it.
6. RESISTENCE : - Level at which lots of selling interest generated and Price does not rise above it.
7. PIVOTS are important points for determining trend/s & r
8. Use PIVOTS to draw trend lines and SUPPORT/RESISTENCE
9. Derive Initial Stop Loss and Target Price using SUPPORT/RESISTENCE/PIVOTs (Q2: Is it safe to do so practically?)

Supporting Techniques for Trend identification:-
1. MACD
2. RSI
3. TRIX
4. ADX
5. Any other please?

(Q3 : Are these enough or do we need more to be sure? In simplest English how to interpret each of them and how useful they are from your experience please? )

actuaryinmaking · #3 3rd October 2008, 09:54 PM

II. TA Software:-

Software is must for technical analysis:-

1. Metastock ?
2. Amibroker ?
3. eSignal ?
4. Quote Tracker ?
5. Anything else you suggest please?

(Q4 : Which one gives QUALITY for money with least possible investment )

II. Real Time Data :-

Accurate, Timely, Pure and Clean data is must for trading specially Intraday

1. NSE real-time data (Quote Tracker) ?
2. Y a h o o data ?
3. Paid data ?
4. Anything else you suggest please ?

(Q5 : Which one gives QUALITY for money with least possible investment )

III Setup

1. Setup software and data feed
2. Data clean up
3. Setup formula/chart/indicators - anyone can share some good Amibroker or other software formula please?
4. INTRADAY charts (60 mins, 30 mins, 15 mins, 5 mins, 1 min)
5. Anything else needed?

(Q6 : Is it right to first look at 60 mins then 15 mins and then 5 mins for Intraday? )
(Q7 : What are best supportive indicators/osc for Intraday? )

actuaryinmaking · #4 3rd October 2008, 09:55 PM

IV Identifying opportunities

Most important part of trading…

Q8: How to identify scrips to trade from 500+ scrips ?

Q9: Do we use software to filter it first? Followed by manual analysis?

Q10: When do we do it? Before market opens? During market hours?

Q11: Do we look at sectors or index as whole?

Q12 : Do we keep looking at news once entered in the trade?

Q13 : What channel to watch ? CNBC Awaaz?

actuaryinmaking · #5 3rd October 2008, 09:58 PM

Q14 - Does it sound practical? Is it missing anything?

Q15 - What is strongest indicator/technique to identify entry/exit?

V. Seize the opportunities

Thanks muchly in advance...

- Nisha Sharma (CFA level I & II)

columbus · #6 3rd October 2008, 10:32 PM

I observed that in last 6 months ,whenever MACD reaches 100 on top or -200 on down ,nifty reversal take place.Those following AWESOME OSCILLATOR ,the correspoding values are 300 and -600.On AO we are at -300 now.

actuaryinmaking · #7 4th October 2008, 01:45 AM

May I request all seniors to please review my plan and help me with my Qs I have noted next to some items…(including Saintji if he has some more energy after that wonderful thread and many others like that)

(Q1: How to confirm trend - How many continuous bars/candle-sticks of same behavior form a trend? What if two bars are ‘Series of Higher Lows and Higher Highs‘ then again one bar breaks the trend and again two bar of ‘Series of Higher Lows and Higher Highs’) - Having difficulties in clearly identifying Trend..!!!

Derive Initial Stop Loss and Target Price using SUPPORT/RESISTENCE/PIVOTs (Q2: Is it safe to do so practically?)

(Q3 : Indicators - Are these enough or do we need more to be sure? In simplest English how to interpret each of them and how useful they are from your experience please? )

(Q4 & Q5 ): Software and RT feed - Which one gives QUALITY for money with least possible investment )

(Q6 : Is it right to first look at 60 mins then 15 mins and then 5 mins for Intraday? ) How to confirm to get into trade for Intraday?

(Q7 : What are best supportive indicators/osc for Intraday? )

Q8: How to identify scrips to trade from 500+ scrips ?

Q9: Do we use software to filter it first? Followed by manual analysis?

Q10: When do we do it? Before market opens? During market hours?

Q11: Do we look at sectors or index as whole?

Q12 : Do we keep looking at news once entered in the trade?

Q13 : What channel to watch ? CNBC Awaaz?

Q14 - Does it sound practical? Is it missing anything?

Q15 - What is strongest indicator/technique to identify entry/exit?

Thanks muchly in advance...eagerly awaiting your invaluable guidence..

- Nisha Sharma (CFA level I & II)

oilman5 · #8 4th October 2008, 08:33 AM

my dear new hero,
since u ask suggestion i comment
.................................................. ..
critical analysis for ur improvement
1.golden rule 1 itself doubtful..........concept of pivot reverse is actually simpler.
why u believe that rule suits u........if u r new learner its ok.......follow trend/ continuation /directional bias
2. others r ok.
......pl define u as a trader, ur rule guidelines
..........................
define time frame ........so bar number clear to u. basically its reflex vs backtest +confidence build up to do it.
higher time frame we search.........thats the reason we see other time frame.......with a faith in continuity.
.........................
develop a set up,use software to search by that.
..............
top down approach gives more oppurtunity
..............
tool is a personal choice .......any thing can fit provided u understand its intricacy and back test.

......................
all others r ok
with regards to a budding trader

karthikmarar · #9 4th October 2008, 10:05 AM

Many answers given here are sure to confuse this budding Trader. I notice that he is planning to use MACD and RSI. He either uses Saints Method which does not use conventional indicators or any other method using conventional indicator....Not both... when using conventional indicators things like "Pivot + Room" does not have a place in it...

uasish · #10 4th October 2008, 07:42 PM

As there is impending "Durga - Puja" from monday itself i am in Hoilday mood will definitely try to answer all your queries ,they are too many & each needs logic & reasoning plz bear with me.
1st let me try the first post .

The Following User Says Thank You to actuaryinmaking For This Useful Post:
alex_laxya (4th October 2008)

The Following 3 Users Say Thank You to columbus For This Useful Post:
actuaryinmaking (8th November 2008), niftychance (4th October 2008), renu daga (4th October 2008)

The Following 2 Users Say Thank You to karthikmarar For This Useful Post:
pakatil (4th October 2008), tulika (4th October 2008)

The Following User Says Thank You to uasish For This Useful Post:
actuaryinmaking (4th October 2008)