Wisdom Dump

Ask yourself these questions: Do you want to momentarily satisfy your urges and desires by just buying and selling whatever you want, whenever you feel like it? Or do you want to be successful and become one of the elite few who take all the money? If you want to be a winner, you will have to consistently make your trading decisions based on what you actually see, not on what you wish you were seeing. And then having seen clearly, you must ACT!

Thats the toughest one, to reach a state of total freedom to ACT on what I see without . . . . .

TRADE WHAT YOU SEE, NOT WHAT YOU THINK

Thanks
nb

Its difficult at first, but everything is difficult at first.

On a battleground like Donelson, and later in vast campaigns, Grant had a remarkable sense of the whole of the event. It was always changing, nothing was ever settled. His perception was not a single snapping of the shutter to give a brilliantly clear image of a battle stopped in full clarity. Instead, what he saw always included a dimension of time, an awareness of the unfolding, evolving motion of the life of war. He knew that each day and battle led to the next. The way to ultimate victory was to develop a stronger sense of the war’s rhythm than that possessed by the enemy. As long as Grant could sense the movement of the battle, he could give explicit orders and get from his officers their best - On General Ulysses S.Grant’s feel for the war

“Of all the thousands of outsiders that I have run across in Wall Street, Pat Herne was the only one who saw in stock speculation merely a game of chance . . . but, nevertheless, had the sense to stick to a relatively sound betting method . . . (yet) he did not stick to his own proved system. That’s the trouble with most of them,” and the old fellow shook his head at me.
—Edwin Lefvre, Reminiscences of a Stock Operator

Studies of brokerage house customers’ portfolios. One report showed the following telltale results:
• The average price at which each stock was bought was higher than the average price at which it was sold.
• The trading methods of each account had undergone a pronounced and obviously unintentional change with the progress of the bull market from one stage to another.
• Stocks that were purchased at a bear market bottom were sold soon after at a moderate profit, even though in a few months these starting prices looked ridiculously cheap.
• As higher levels were established, the same stocks were repurchased at prices considerably higher than those at which they had previously been sold.
• At this stage, larger-percentage profits were the rule (evidence that what was considered a “reasonable gain” had been upped).
• Stop-losses were not in general use at this level, whereas they had been freely placed when prices were lower.
• The acquired confidence of the buyers seemed to have caused them to buy extensively on the first major reaction from the extreme highs.
• These were later liquidated at substantially lower prices.
—Don Guyon, One Way Pockets

What a report ,this is what small retailers like us do normally.

"What little I know I will tell you. So far as I can reason it out I will do so, but as to what I do not know I will simply tell you what the books say. It is wrong to believe blindly. You must exercise your own reason and judgment; you must practise, and see whether these things happen or not. Just as you would take up any other science, exactly in the same manner you should take up this science for study."
"It is not the sign of a candid and scientific mind to throw overboard anything without proper investigation. Surface scientists, unable to explain the various extraordinary mental phenomena, strive to ignore their very existence."

- Swami Vivekananda

majority time after new value discovery price move quickly occurs by impulsive move..



Re: Three main criteria to pinpoint potential Stock Picks

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majority time after new value discovery price move quickly occurs by impulsive move to reach new stable zone. a forward price driveness occurs in market, based on earlier close and feed by media.among all timeframe player higher time frame has max influence [dominance]
.......................recognisation of trend..............

to define a trend ,a ref pt has to taken..it may be yesterday close ...mean pt. or opening stabilise
another factor,.....market needs time to develop trend [continuation]..ie. market must show some move , then opposite direction force has to be neutralised, then only new direction strong trend move possible .
step 1; study in 'balance area'
so which direction imbalance is building up
step 2; now in relation to bigger picture ...how a trend may form
so fairly low..fairly high] ...which one is breaking with thrust ....govern..move in future
....................
however sometimes stabilisation occurs ,hence price flatly fluctuate high/low of a range...in side ways.hence a band study is critical and how many times it touches to break at top or bottom[say 3].now when at what context reversing in price with volume thrust is very imp
now if down value is not breaking , then upthrust may bring easily a move of trend .
the path of least resistance .....another concept to be put forward.similarly market if can not trade up ,anticipate a test in downside ,
hence check reverse at top.....unfair top value, reverse at bottom unfair bottom value.
.....however equilibrium in middle not to trade........and watch only
.................................................. ............................




Re: Three main criteria to pinpoint potential Stock Picks

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we also watch condition that affect value .it helps in our decision making process of trading
1]imbalance in move
2]balance of rotation in money [sector rotation] as uncertainity play plan
3] about to; termination and sharp move in opposite direction
4]continuation of past main strength
..pl use this concept in actual trade.
cashflow[money flow] is based on news flow....new development causing watcher participate to join , samely if big sell occurs cash go out of system, causing downfall of market


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so i continue to put idea further some r repeated to show better imp.
...........................................
so at low value ,with least interest sell diminish.so range ....high -low , imp to watch on context when and why occurs. its also variable of session 1-session2--session 3 has some relation to predict continuity and or reversal . in an established higher time reference range balance trade occurs.but considering oppurtunity cost this zone with small range not to be traded as least oppurtunity exist.axism of trade =test of top and bottom .now with spring action by thrust imbalance break that zone at top or at bottom ,attracting further buyer/seller and another new equilibrium attempt is made,however strong media hype can fuel addition of new buyer/seller. distribution of capital is another theme.
monthly bar...top1TOP SIDE HAS UP BIAS, 3BOTTOM ZONE ...BEARISH
I
ZONE1 I........
IMIDDLE ZONE
I........
ZONE3 I
I...BOTTOM
.................................PL STUDY THE FIGURE ,HERE HIGHER TIMELY BAR,SAY MONTHLY BAR BROKEN IN 3SECT.short term players r playing here as usual with buy low sell high, in this equilibrium , however testing at or bottom r watched by long term player....to see who shall win ,bull or bear.........also watched by market master..........the game of short term player vs. investor as a whole ......to see equilibrium and business prospect of country.
hence closing in relation to above mentioned picture , 1---upbias
3 ---down bias
now question is in near future at market index is going to violate mid equilibrium and shift to show continuity[for india .....yes for somedays]
now we know 2things r only possible
i]directional move
ii]balanced rotation in range
it is the cash flow[fii money] govern and guide this 2.....how it shall be distributed ?
higher cash flow into the market=upward direction.thats why trade location is to be studied ,after entry in a particular price .new buyer r ready to continue to hold mode,then only uptrend is possible .now in balanced range case, in top ....money is taking out of system causing a fall[test at top and distribution of money]
now see watch study how much actual buy/sell occur here [nseindia....% of delivery].
............................

expectation factor/ma study as suitable smoothing is helpful[50dma certainly guide idea of intermediate term].u have to take biasness of higher time to check tenacity.also durability of cash flow and how much r left out or sitting idle??
at top of range ,some times range expansion occurs .this is key for a trendiness.at what pt shortplayer throws towels...book loss gives strong up move[thrust like yesterday]
similarly at unfair low and after stop loss triggered by battered bull ;.....buy comes after some day from mature fund managers......as bigger sell no more exist .
hence i repeatTOP SIDE HAS UP BIAS, 3BOTTOM ZONE ...BEARISH
.....hence both offset of unnatural high and unnatural low offer oppurtunity to observer/experienced trader


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now after little fall[distribution] so it is downside pause. here take breadth....2nd attack by bear to be expected......if they fail normally another attempt is made , fortunately if it holds ,
there is only one plausible move...UP.
for analysis we go for micro detail ,study critical value zone and moneyflow near it. study how close affect and test and behave after creating imbalance and thus oppurtunity
day 1;open 10-1030
mid 1300-1330
end hr 1500--1530

.....
I ZONE 1
I....
I ZONE 2
I....
I ZONE 3
I....
CONCEPT OF RANGE BAR, compare with close yesterday
in hrly bar study use last bar continuation idea
..............................
factor: with growth of media and internet , investment money comes instantly to market after news.
a mix up in various timeframe player ,hype by media, fear of individual make trading a complex process .
......hence money flow is most critical element as in upmarket, money and index both r up
however in balance case, equilibrium to middle value ......tendency is normal .
our aim is to search for directional move
news ....its impact,unexpected readiness is must for a trader.say.....a bullish report comes , market but dont rally .....sign of great danger,,,,,,sell all holding ....be ready for short
.......................
hence visualise near term activity
study market's current condition
understand participant's vs. watcher's role .......range idea ,balanced zone
next comes can u watch price and learn and predict?
still its difficult to say ...a break out is going to be beginning of new trend......but thats the aim

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till now last 6yr back test data showing bar by bar ......based on yesterday close and next day trend ,increase of bank balance by trade ....loss in greed ,methodologically i can say in indian market,in a weekly range bar, close near upper 15%value....has up bias
close near bottom 15% has -bias, and in between 70%,35%+/- is unpredictable .
so around top, new money entry into the system break the top........always consider this longer time frame view , u trade or not.
note....central mean area has tendency of price cluster.
............................
imp of av price .....it shows the activity out of noise,hence very valuable for intermediate term study.say take study of 6day, a weekly chart of 5day with data of yahoofinance helpful ,to understand continuity.........near term activity[predictive mode].
anticipate future is another style......or hope and hold ,expecting break out in future[long term bullishness like indian market].remember av has price bias of direction in long term


Re: Three main criteria to pinpoint potential Stock Picks

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present condition of market
..................................
what exist now? imbalance or balance
long term view and short term view
if imbalance exist ,go with the move .....in balance case fade or watch.
now in weekly frame imbalance bias of upside must be taken as buy oppurtunity .
next question is where position should be held longer?
so normally unless normal signal is not valid,..short the same trade in smaller size .....allow it to move to price restoration .....again take small position and watch
.....hence this 2 factor ..1[price and 2]participant r governing factor......when phenomena is controlled by price ....its better to buy at break pt after break out.....also sell by fade at rally.
memember money flow is mother of all activity .longer timeframe has more control ...to guide duration.calculate different av [ma] to continuity in intermediate term
.........
near term whether top is holding or not, very critical part of......

Re: Three main criteria to pinpoint potential Stock Picks

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strategy for balance[zone] and rule for imbalance .....r strategically as well as tactcally different
ability of a trader
.................
1] see near term activity in longterm context
2] as a person [pro] aim to build up when toenter and how long to hold?
a time frame weekly is helpful

trade zone:mean pt keep balance with ma
hrly equivalent range expansion shall show trend ....market shall decide to stay there or break it[continuity]......thats the study giving clue at each hr....an excellent view put forward on nifty future by STOCKPICKS moderator


Re: Three main criteria to pinpoint potential Stock Picks

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2terms impulse[quick distribution] and reaction[development]....standard ta meanings r used also higher time has dominant influence ,....normally impulse case move is up....then is reaction

...............
tradezone[development]........
1range established
2 value area rotation occuring
3higher time is diminished by small small move in opposite direction [more in number] . repulsive by small insignificant move
now suddenly quick move starts in opposite direction
4.old support/resistance define activity with sp. limit pt
major idea mean reversion
................now conversion to
impulsive system[quick distribution]
1. trade range expansion
2.beginning of a new higher timeframe move [bias]

touching higher ref pt[resistance ]and continue and break it to move forward
price influence is dominant
...........now with is trade zone reference and a big picture clarification with price and a breaking of critical price level ,early u can capitalise oppurtunity.hence see current activity,short term development,longterm impact [continuity idea].
create this idea for buy/sell and taking position ,particularly understand impulsive strength.....spring coil'mechanism.wgere as at trade zone idea of trade is different ....low bottom test

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in trade zone define first std resistance..recent top
std low support.....bottom

middle=balanced value

.................................
whether this top ,calculated from higher time frame is unfairly high?
then at top fade shall occur.....it means at high pt low volume sell ....but its coming contineously.
however in start of trend ,market is controled by active participant ie. force to join in it strong money ,....normally create a forward drive. hence after continuation of higher top , break out continue[development of trend]..........it is searched for more money ....hence participant[stronghand ] r imp factor as they continue to hold,however ....if if its not backed by strong fund,.....holder become panicky, and start liquidating position .
hence do solid grasp of this theory[ hi i am a theoritician ....with sufficient trade experience only in indian stock market]......follow this principle to trade in cash or future[mature player only]....
first define reference pt with longer time frame
1] weekly
2] then watch near term activity
3]see then how participant r behaving.....in particular price area


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since the theory is long enough .......some imp hints r to be repeated.
1]what is mean value in longterm
2]past distribution phenomena'trade zone'in higher time frame
3]cash flow plan of u and market participant
4]smaller time frame approach to study directional break
5]start of a trend vs. narrow rotation in top/bottom
6]directional trend depends on new events and market development with strong moneyflow
7]execute rapidly decisively with big picture in mind
8]new cause and hence change in perception of value
9]whether distribution [tradezone] is showing same bias in shorter timefram ie. wavelet
10]more news /activity is tandem with price behavior ....or suggesting directional play by news event
11] still keep ready for unnatural event
12]even after entry , near time judgement based on price has to be seen as well as who is active participant
13]longterm development
14]down day factor
15]test at zone[top].....how long u shall hold?........when sell come against u .....in context of today/or from higher time frame big volume seller
16]when to go for short?study critical price at new top?
17]in lower time zone what is the value ......if volume poor, so is higher mean reversal tendency.....hence fade trade plan.....
now where new buyers r uncertain?this is first criteria for short.....next media help to propaganda , seeing market at balance with slight -bias,....now sell big .....break down .
...when it try to reach equilibrium at bottom.....cut down excess ...normal profit booking ....and some short r hold....see by price with hope what near term suggest....if again down contd......just hold and book profit.




Stock pick for futures | how to handle panic!!!






Three main criteria to pinpoint potential Stock Picks
Discuss Three main criteria to pinpoint potential Stock Picks at the Stock Picks - Others within the Stock Picks India; theory of short at top .............................. is it a major resistance? no strong..........


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theory of short at top
..............................
is it a major resistance?
no strong buy observed at higher pt
if it cannot trade up, logically it should now test a bottom /mean value .....in downside .
as participant r uncertain ,so they shall definitely liquidate position by following law of volatility.....with this evidence we may join in short.
....where to liquidate?if with liquidation at bottom , new selling r coming .....hold further.
.......when market slowly reach upside ....and again start coming down ....go short.
prepare playplan first.....its not easy
first clear with holding position.....exit from all long position
...............................always judge possibility vs. actual ....and concept of part vs. whole
....only after some yr case basis trade ....then only trade aggressively.
.....
but remember....longterm frame has more influence ......hence short against trend not commendable .......[seen the masacre of bear last 2days

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volume
..........
volume confirms liquidity and price distribution, actually used for confirmation of price strength.it may help in your decision making tree.
1]trend is going to continue??purpose is react early
ask question ...to clarify ...what market imp.participant r doing ?buying or selling..or in distribution [watching]
in trade zone ....again see as per range in middle no participation , near top.....high volume participation with good % delivery.......take risky entry
near bottom low volume participation ...again take entry....support buy.
...........
can we distinguish buy volume vs. sell volume?in higher range with price up,volume up phenomena is good .
in lower range , higher volume suggest sell volume.
........
next question is at lower volume at down day who is buying it?....definitely long term informed buyer r buying with good idea on company /near future.remember long term buy is done at comparative lower price ......with different play plan of sleeping money.
cash flow up
...............
higher volume near top suggest interest by strong hand .....a short term aggressive play plan.
total volume tool
.................
creating momentum more than double volume ,compare to 10day av. is good.observe when down volume brings strong buy .....quick up move [not allowing to stay in bottom].......it suggests whenever good news flow comes , probability of strong upmove.

similarly if low price brings more activity ,price shall have to go down .....to stabilise first.decrease in volume in low price ......stock has no more interest,however bottom is near.
if low no trade @top,.....buyers seem to be not confident .......hence fall is imminent
in general volume pick up suggests more participation of public in direction of price.
advertisement of commercial when marketing.....play to lure participant is natural....
so it can be a tool for oppurtunist trader ........
more activity [normal type distribution ] @ av zone.......is balancing action......watch only.
ultimate shift to topside or bottom zone has some utility.hence expected behavior in trade zone .........buy at lower value and sell @higher value [channel play]
but who is behind to change it........to create a new trend?
hence sudden sell by pro at lower value means they expect bottom further, similarly buy by them at top.......means they have reason to be greedy[unexpected event ]

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concept of under value buying
........................................
identify volume with selling and buying ........is entirely different , and wrong assumption /analysis will be costly
for volume analysis
.......................ask question?
1]what was the activity in this session
2]how does this activity in larger move
note: higher volume at topmost pt,with price maintaining strength suggest actually strong hand buying
total volume[say 5hr adding a day]suggests further activity required to continuity of direction
new event + development at that time .also to be checked in this context.
price vs. volume .....activity occuring where ?
top
middle
bottom
.......
at top its ok,at lower also ok
but if at middle ,it does not have any directional bias ,simply mean area efficient market condition.......random trade zone,profit by luck......a losers game
infact good news to upmove suggest ......be ready for show,
low volume with up price suggest buyers r nervous[normally individual stock presedence is different actually].........price fall is soon expected .
.....so take very small position and see....on individual stock basis on real time test and analysis.
tick data higher volume play at top value suggest strong hand play plan
delivery % at day trade......
new mf/fii buy,
weak hand play[call buyers]
hence higher price tick volume at closing hr, suggests strength/interest by player
....let u try to correlate with news ,....study whether break out shall fail or confirm?



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summary again
....................
1]inflow of money in a particular stock generally push price up
2]in balanced area[sideways market] play within range .....buy at lower pt
3]a forward price influence occur with trend
4] normally balance exist in trade ,however its tilt that to be studied
5]play in upper zone is bullish , study it in higher time context
6] failed to brake suggest top fall
7]volume thrust .....reversal in trend
8]considering trend .....buy/sell ....action must be at top /bottom......not inbetween
9]range expansion suggest biasness
10]time-price-oppurtunity study
11]unlike event must be seen in context,if hints r it may continue .....danger
12]understand value.......fairprice
maket activity is nonrandom,it can be deciphered with strong judgement,at top of price when nomore buyer available price shall come down.same ay after market fall ,no more seller available ......price shall start to move up.
13]we search for continuation or change[reversal]
14]its the imbalance make trend
15]last 45 min is time to trade with break out on delivery......its the long term player's buy style we shall follow.
...................................
hope all trader enjoy this fruit of study on market on last 6yr
btw. trading is a risky game rarely suits individual
wish u all the best
oilman5
....................
hope cv now u r happy

Wow,Oilman......that post above must be the longest post in Traderji to date!!

Going to take a week though to decipher it.......but keep em coming,my friend.

Saint