Interest in Technical analysis

[Trading_interest]

Hi, It's a good initiative to start this thread. Here are my 2 cents:

1. Always practice technical analysis on spot charts, not futures charts. Futures charts have price spikes at times especially during the opening candles which gives a false sense of lows or highs. This is especially true for stock futures. I recommend you use NIFTY spot charts. Only a few brokers provide this.

2. When I first got into the stock markets, NSE had Mini Nifty and the lot size was 25 when the index was only 5200. It was really easy to learn trading index futures without burning much money in case you lose. But now, the index is 11500+ and the lot size is 75. Hence, you'll need to load your account with more funds and start from a higher base. I suggest you start trading equities first. Maybe in 5 different stocks as the rate of learning will be faster with a much smaller capital at stake.

My $0.02!

Thanks for that advice Tejas. Very valuable.

One question though - because the price of the future is different for future and for spot, isn't it better to choose respective charts if you intend to trade in that particular instrument to give oneself a good sense of whether the strategy one is designing would work? I am in the process of understanding multiple technical indicators and putting a set that I think make sense to me. But what I realize is the same set of indicators with the same configurations give very different accuracy rates for Nifty future vs a Stock future in back testing. For example, I see an accuracy of 80% (atleast in backtesting for Nifty) but only 60% for stocks with the same indicators and the same configurations. Monitoring in real time may turn out to be a different story altogether. This makes me inclined to stick to just one instrument (say Nifty future) and see if I can crack the code .

However, is it the case that every scrip requires a different configuration of the same indicator set to be effective? My very preliminary analysis tells me so but would be great to have expert views.

I do completely understand the concern all experts here have for newbies. Infact thats very appreciable. Thanks a lot!

 

[Tejas Khoday]

.

Thanks for that advice Tejas. Very valuable.

One question though - because the price of the future is different for future and for spot, isn't it better to choose respective charts if you intend to trade in that particular instrument to give oneself a good sense of whether the strategy one is designing would work? I am in the process of understanding multiple technical indicators and putting a set that I think make sense to me. But what I realize is the same set of indicators with the same configurations give very different accuracy rates for Nifty future vs a Stock future in back testing. For example, I see an accuracy of 80% (atleast in backtesting for Nifty) but only 60% for stocks with the same indicators and the same configurations. Monitoring in real time may turn out to be a different story altogether. This makes me inclined to stick to just one instrument (say Nifty future) and see if I can crack the code .

However, is it the case that every scrip requires a different configuration of the same indicator set to be effective? My very preliminary analysis tells me so but would be great to have expert views.

I do completely understand the concern all experts here have for newbies. Infact thats very appreciable. Thanks a lot!

Well, for technical analysis, it is important to study the spot charts because futures are a derivative of spot and not the other way around. I used to always prefer to watch spot over futures charts simply because it is the underlying and itis what futures price is based on.

Monitoring multiple stocks and indices at the same time will increase the speed of learning. Please take it one step at a time if it helps. Every stock is different! For instance, the price action of Reliance Industries is very liquid and different from it's peers. If you can learn how the price action differs, you can decipher the indicators better and project correctly.

 

[Trading_interest]

.

Well, for technical analysis, it is important to study the spot charts because futures are a derivative of spot and not the other way around. I used to always prefer to watch spot over futures charts simply because it is the underlying and itis what futures price is based on.

Monitoring multiple stocks and indices at the same time will increase the speed of learning. Please take it one step at a time if it helps. Every stock is different! For instance, the price action of Reliance Industries is very liquid and different from it's peers. If you can learn how the price action differs, you can decipher the indicators better and project correctly.

Thanks, I'll focus on these points .

 

[Trading_interest]

Start your trading with cash segment then go to future. You don't need to set target. Just focus on stop loss. If your position turns profitable, just follow with a trailing stop loss.

Yes, cash it is !

 

[Trading_interest]

One more question though, can only technical analysis be solely used to predict market crashes for example the 2008 crash?

Or can it at least help to minimize losses with timely exit ?

 

[Rekhit]

I am glad I found this thread. As someone who is just starting out in the world of algorithmic trading and have only joined a few online courses on Quantra and even Udemy, this thread was more than informative. Also, thanks for the analysis and I have already bookmarked this thread so I can learn more from this thread.

 

[Traderjeet1]

Hello everyone,
Recently attended a seminar and got interested in trading.
I have very little exposure or experience but have invested since last 3 years only via mutual funds.
I hope to gain experience and hope to be regular trader like others here.
I was amazed to find Traderji platform and nothing really they good for Indian forums.

Thanks all.