Are some price patterns manipulated?
- Thread starter bvpraveen
- Start date
problems in the sense fine tuning. see uti...break out and reverse....ivrcl...break out and reverse (tho on negligible volume). now i am seeing if i can use options to trade breakouts or whether to take a day trade and square off positions by that day itself or take 3-4 bars. i have to see whether i wud like to trade breakout per se. i am pretty happy by trading 1-2-3 if i day trade and anty for two to 3 days trade...else trade option strategies. i just read that breakouts and failures are one of the most consistently profitable ways of trading. so i was just seeing how to develop a system for it. then again i read somewhere that thses days breakout failure is a norm rather than exception.
sorry to see it late...
ya failures are a way of trading and so are breakouts...
some lessons i learnt till now
breakouts do not mean just breakouts from price patterns that we see on chart...u have to have systems on breakout and their failures...be ID/NR, HOR or channel breakout, envelope penetration etc and turtle soup and others on the reverse.
there are lots more to it, testing right now....
most books just say trade breakouts..and when they fail, that also give good returns...but only when u design a system can u get consistent benefit...anyway i am just learning, and neither am i a great teacher...i hope pther seasoned traders can help much more.
ya failures are a way of trading and so are breakouts...
some lessons i learnt till now
breakouts do not mean just breakouts from price patterns that we see on chart...u have to have systems on breakout and their failures...be ID/NR, HOR or channel breakout, envelope penetration etc and turtle soup and others on the reverse.
there are lots more to it, testing right now....
most books just say trade breakouts..and when they fail, that also give good returns...but only when u design a system can u get consistent benefit...anyway i am just learning, and neither am i a great teacher...i hope pther seasoned traders can help much more.
Breakouts are great to trade,but failure patterns......sweet!!You can palpate the sheer horror and panic as a pattern that so far behaved true to form suddenly does a volte face,and as everyone prays and hopes and sweats,you reverse direction and benefit from the fall.
One must have some criteria after which that trade no more qualifies as a pullback after a breakout,but a reversal.
But happens every other trade in the US markets,more than in India.
Beginner,looking fwd to your posts......some great ones thus far.Very nice,and keep 'em coming!
Saint
One must have some criteria after which that trade no more qualifies as a pullback after a breakout,but a reversal.
But happens every other trade in the US markets,more than in India.
Beginner,looking fwd to your posts......some great ones thus far.Very nice,and keep 'em coming!
Saint
MY God,
Dear Saint u made my day. I will work even harder to study more and get back with more stuff...Right from the first day on this forum I looked at your's, Ajay's and CV's posts for guidance....it is very difficult to find mentors, but only because of great souls like you, we learn so much faster, and I really mean it.
Half of my posts are a direct result of my interaction with CV (the absolute brilliant) who is generous enough to teach me a new thing everyday to "catch a fish" in real life...
Dear Saint u made my day. I will work even harder to study more and get back with more stuff...Right from the first day on this forum I looked at your's, Ajay's and CV's posts for guidance....it is very difficult to find mentors, but only because of great souls like you, we learn so much faster, and I really mean it.
Half of my posts are a direct result of my interaction with CV (the absolute brilliant) who is generous enough to teach me a new thing everyday to "catch a fish" in real life...
Hi Praveen,
Some more observations...as i am writing quickly, they may be haphazard...
break outs simply based on price patterns are far more unreliable than breakout detected by volatiliy contraction and other evidence, and again the correlation with my post above to have a system.
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.
Finally, my greatest observation is that look at different time frame and overall market. In longer timeframe, what sems as a breakout in your time frame, may just be a blip or a congestion. similarly in a shorter time frame like hourly chart, it may just be a sudden range expansion (climax like), whereyou can be sure that counter punchers are getting ready.
and look at overall mkts and sector...if fmcg as a whole is strong, then break outs in itc and hll may be far more valid. similarly if the overall mkt is in a strong trend, breakouts in the direction of the trend may hold more weight.
Just novice observations...hopw saint, cv, amitbe, ajay and others will help in fine tuning them
regards
Some more observations...as i am writing quickly, they may be haphazard...
break outs simply based on price patterns are far more unreliable than breakout detected by volatiliy contraction and other evidence, and again the correlation with my post above to have a system.
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.
Finally, my greatest observation is that look at different time frame and overall market. In longer timeframe, what sems as a breakout in your time frame, may just be a blip or a congestion. similarly in a shorter time frame like hourly chart, it may just be a sudden range expansion (climax like), whereyou can be sure that counter punchers are getting ready.
and look at overall mkts and sector...if fmcg as a whole is strong, then break outs in itc and hll may be far more valid. similarly if the overall mkt is in a strong trend, breakouts in the direction of the trend may hold more weight.
Just novice observations...hopw saint, cv, amitbe, ajay and others will help in fine tuning them
regards
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