Learning Delivery Trading and Investing

[rajputz]

dear,
for tatamotors....for me it seem bit easy to draw R and S's but i am feeling bit difficult with this chart, can you pls. exlain, how to draw.

Hi swamy...I agree to oilman...whenever we check the support resistance we do check the volumes with which the support or resistance is broken. If the volumes are good, as in case with tatamotors, then it is a positive sign for the direction.

Now coming back to your question. How i interpret it is, that a resistance once broken can act as a new support. or support once broken can act as a new resistance. And over a period of time when this line is supported and resisted many times, it becomes the locus of control for the share price. Price deviates from that price, tests it, bounces back or break it from time to time. Same thing can be seen in the case of tata steel.

On 4th june arrow we had the resistance formed. 5th august it was tested again....11 september 2009 it was broken and became the support after wards....retested on 29th october again....tested again on 9th june 2010 again..retest again on 7th july 2010 again...all the time this single price 433-493 was the support and resistance zone...once broken it acted as another support.

Now one thing that is to be kept in mind is that support and resistance region are not respected on tick by tick basis, rather approxiamtely...it becomes a zone...

hope it helps. If missing some thing then can b added by other traders.

 

[Placebo]

Good Luck in this new exploration Rajputz.

Learning delivery trading and investing creates a lot of dilemma because of the tools which are available for analysis. I am not a fan of TA , on the contrary ... Aah forget it lets not get into that. That being said i firmly believe that the chart contains all the information as long as one knows how to read it correctly without mumbo jumbo patterns and tools.

But when it comes to stocks even raw action of price , price movement and volumes is not sufficient. Some more variables have to be considered which fall outside the chart. There is where FA comes into play. A lot of assumptions have to built in while analyzing FCF's and trying to value the worth of the company. Relative valuation helps in determining which company has outperformed its competitors as long as there is a level playing field.

A combination of Chart Reading And FA would stack the chances because the chart shows micro changes and balance sheet/income statement reflects macro changes. As a rule of the thumb anything that is selected for long term in the portfolio should first get the approval from fundamental data. Entry/Exits should then be based on the best possible available place on the chart.

Hope This Helps

Cheers And Happy Trading

 

[rajputz]

Dear Rajputz,
Weekly chart ........pivot is very good for........postional play.
Just understand coincidence of June2010...result out with 2;nd Aug'10...Just see the candle @ resistance........key bar,........then Big volume splash..........Result is 150/- profit.
Yes a theoritical discussion.........i could not trade as presently i am not this sector.
moreover..........i miss it.
But its an excellent approach for positional trade.
Key pt........Result/greed/moneyflow........at resistance Break clearly SEEN
...........
thanks again

Agreed oilman...

Volumes are the key to look for at support and resistance levels. it takes time to understand it but is worthful. I still remember the day of june 2010 when i even missed that 150 rs. move. Still remember it. Thanks for reminding me of that time.

 

[praveen taneja]

Really nice to see your growth in trading I was too thinking to start a new thread on investing but let we all use ur thread for benefit of all
I was thinking that in many threads I saw members asking seniors and others for suggesting them few stocks for long term investment like SIP or stocks which are in long term bull run but the problem wih them is mkt covered almost 125% from 9k to 20k now they dont have courage to buy at once so in this thread I request u and other member that they can post stocks which they think are good to enter for a mnth or for a two or for long term with mnthly mode
My way of trading is hopeless and suitable only to me thats why I cant suggest anyone what to do but hope my idea can benefit few TJ members
All the best and my heartiest congratulations to you for good work and devoting ur precisious time for the benefit of all:thumb: God bless us all

 

[veluri1967]

Congrats to Rajputz on this new initiative. I request one and all to keep the ball rolling step by step so as to help each other to reach their ultimate goal.

Here are my views on Support and Resistance.

As far as my knowledge goes, Support and Resistances are determined through

1. Visual observation of Pivots.
2. Mathematical calculation of Pivots.
3. Moving Averages.
4. Fibonnaci.

 

[Smart_trade]

Nice initiative rajputz....will be monitoring this thread closely.

Just few of my observations on point 1 opened by you...when to take delivery.... To answer this question we need to understand different trends at play at the same time in the markets.... for our trading purpose following 3 trends are important.

1) Minor Trends : We use them for trading intraday.

2) Visual Trends : We use them for swing trades.

3) Major Trends : We use them for positional trades or delivery trades

These 3 trends are interacting with each other in any timeframe...if one can master the interplay of these trends he has the holy grail of trading.

My best wishes for the thread....I will certainly visit and post on it from time to time.

Trade well...

Smart_trade

 

[rajputz]

Thanks for the inputs Praveen Bhai, ST and veluri sir...

This clears many of the basic doubts.

Coming back to learning of delivery...

The most basic doubt that i always had is the initiatives or the first step in look for a fundamentally strong share. Although i know that technicals can be used to precise the entry. But what are the fundamentals that are to be looked.

Like as ST sir said Major trends. Do we use monthly charts for them or some other fundamentals.

 

[veluri1967]

Thanks for the inputs Praveen Bhai, ST and veluri sir...

This clears many of the basic doubts.

Coming back to learning of delivery...

The most basic doubt that i always had is the initiatives or the first step in look for a fundamentally strong share. Although i know that technicals can be used to precise the entry. But what are the fundamentals that are to be looked.

Like as ST sir said Major trends. Do we use monthly charts for them or some other fundamentals.

A small clarification to put it in the right direction.

1. Trends are related to technicals. (You are already know much of it):thumb:

2. Fundamentals are related to outlook, financials and / or rhythemic cycles.
(I feel if somebody who is proficient in studying fundamentals contribute here life will be much easier).

 

[DanPickUp]

Hi rajputz

As I do not trade any stocks ( Only options on futures with advanced hedge strategys ) I thought, I will spot on your first subject ( When to sell and when to buy ) with a video from Joe Duffy. I was reading his book and I have studied his learning DVD. He is part of my trading style, specially when it comes to support and resistance.

It is all about resistance and support and he brings it down to a very simple point :

"Believe what you see in the chart and do not surch for some thing more"

I take out a piece of this range and I never trade the top and down of any range. It is like taking out a piece of a cake.

I will put here an example of his thoughts in an open video :

http://www.youtube.com/watch?v=GK7K_sXn1Y4&feature=related

There are one or two more of them with different subjects and all are very informative. More than I could write in one post. He also won some of the trading competions in the USA. He was in his ealier times a money changer in a bank and there he recognised, that the market always moves in certain ranges. At those times, they did not have indicators and what so ever. He just figurs out the numbers and concentrating on them.
As simple as that.

I wish this thread good success and if you enjoyed this little post from outside, it has done its work.

Take care and have a nice Sunday evening

DanPickUp

 

[columbus]

Basically there are 6 types of Tradings /Investments.

Scalping.....................ranges from Minutes to Hours.

Day Trading................ranges from Hours to Day.

Swing Trading.............ranges from Day to weeks.

Short-term ................ranges from weeks to Months/Quarters.

Mid-term ...................ranges from quarters to year.

Long-term.................. Years together.

Perhaps first 3 falls in Trading category (Risk is more) next three falls in Investment category
(Risk is less).Based on age group and risk appetite one can allocate funds accordingly.

But ideal choice would be 1:3.That is ,if one is having a capital of 4 Lakhs
then ONE lakh for trading and rest THREE lakhs for investing is good.