so what we learned so far?
trading is an intellectual persuit with greed driven mechanism,not suitable for all.
..........honesty zeal to learn,stoicism........be in present,visualisation......action,cool nerve.
....................
bma........broad market analysis........long drawn interrelated idea
concept of fad..........sense of smelling danger.
........................
after this comes ta........to know how other trader shall behave+price confirmation concept.
...............
next come data +software...........synchronisation........signal development /backtesting
............implementation
after that polishing what works for u and unlearning all other things.last thing is very difficult.....indians have tendency of garbage in..........though cv relentlessly suggests to check utility first and sharpen own tool.
btw...........nowadays forex concept , from viratech data all currency pair and chart study of world index.............suggest..........money is moving out from which country and entering where.
Hope now all have a fair idea about the capital mkt & the Risk involved.
intraday........n any chart in one axis is Time,hence if now we compress the charts say from weekly figs to monthly or even to yrly,we will find a clear Trend or a bias to (+)ve or (-)ve.
If that be so then WHY we expand the time frame to intraday so the volatility is more or noise is more.
I am RISKING more ,for what gains ,brokerage,margin,thrill,working from home.
Before indulging in this More Risky aspect ,plz ask what do i gain.
And on what LOGIC this seems very easier task.
........................
Day trading is to have complete control on your every emotion & 1 slip = 1 or more loss & remember few good trades are always what lures people to day-trade & that's when trouble starts, then they dont give up even in losses & its a battle of ego.
.................Nobody can disagree that this is Risky,if so then the Outcome is UNCERTAIN.
What is the PROBABILITY of the outcome.So TEST on past incedents to find out.
How do we know that all those past performances where not RANDOM.
Was Big Bang a Random ,a evolutionary ? a scientific process ? Can those be measured to find out or based on BELIEF ? What should we do ?
Gosh i thought day-trading was an easier job ."Shrewd, Sharp, Silent" are only few traits one needed to experiment for trading, just my obeservation though.
I want to learn as much as I can and keep learning in future at the same time start very small and make it big later.
I am willing to risk a small amount of my hard earned money for it
.............. Capital Mkt is a place where people always trade with "Calculated Risk".
There are people who MAY not know the extent of this Risk & trade profitably upto some time & there may be people who knows & trade un-profitably.
Before plunging 1 should know.Even the Risk Appetite varies from people to people
.............1. use a certain limit for day trading (as of now its 10-20k will increase gradually to 40k no more)
2. enter every trade with stoploss. thus limiting my losses
3. as gain occurs increase stoploss to seal it.
4. each day transfer my gain to account and start with same amount of money. enter only known scripts and control emotions. If i lost a good entry point, will wait for later time ..............................Is it necessary that you HAVE to day-trade ? Plz trade based on EoD data .Many a people term it as Swing Trading.
......consider myself amongst the lowest grader here..."
I was at that catogory only,just been promoted to next category recently.
"By swing trading due u mean buying at EOD and sell tomorrow morning or 2-3 day later at around 5% gain or less..... ???"
With 3-5% Gain (after adjusting brokerages) can be next day or few days until Stop Loss Hit.
............................a gem from asish.
Precaution? Lots my friend (as Saint would say). Well for some unfriendly talk.
You think? that means you DONT KNOW. What makes you think?
Stoploss limiting losses? How much? And how accurately?
Transfer gains? Great! And as loss occurs? where do you replenish it from?
How would you control emotions? And how do you know that YOU WOULD control emotions?
........................UNDERSTAND THE DEPTH IN QUESTIONING!!!Imagine somebody thinking that F&O means High Leverage hence my Wins can give me double/triple returns on Equity !! are we aware about the Probability part.
We all trade in F&O ,but where Risk is visible & manageable.
What you are referring to is intra-day noise. This effects short term or intra-day traders. Mid to long term traders generally avoid this intra-day noise to ride the trends.
When you look at the performance of the stock market at the end of a trading day it can be hard to work out why shares have either risen or fallen in value.
Broadly speaking, share prices are influenced by news or information: new data on employment, manufacturing, directors’ dealings, political events or even the weather, all kinds of news can influence the way shares move.
The health of the economy has a fundamental influence on share prices because it is ultimately responsible for driving company profits. Broadly speaking, if the economy is growing, company profits improve and shares will become more highly valued. If the economy is weakening, company profits will fall and share prices will go down.
Investors look at a vast amount of data to try and work out what is going to happen to the economy and shift their portfolios before the events occur. This is why you will often see markets move well ahead of an actual event occurring. You may, for example, get little reaction from the stock market when interest rates rise. This is because investors have already anticipated the shift months in advance and adjusted their portfolios beforehand.
You can usually assume that the stock market will anticipate moves in the economy by around six to nine months. So if you want to stay ahead of the game you will need to follow price data as closely as the professionals.
Investor sentiment can lead to irrational buying or selling of shares and result in bull and bear markets. A bull market is when share prices rise while a bear market is when they fall. In the technology boom of the late 1990s, for example, investors paid extremely high prices for shares and ignored traditional valuation measures, such as P/E ratios. This carried on until 2000 when investors belatedly realised these shares has risen too far and resulted in a three year bear market in shares.
__________________
Best Wishes!
some imp. question asked first.............what u r? know u.........ur strength.....weakness
know market........its dynamics.........with experience more ,u learn more.....it offers oppurtunity.........where u dont know or read wrongly............its threat.......may kill u.
survive first then............swot.
2nd level..........where u stand up better than others in this arena?learn debrief
how much info u can handle ?.......can u represent them objectively,........pref mathematically...........
........u have to be crystal clear.........sharp'....by cv.......apply as oppurtunity comes.
.......develop a harmony in u.........a trading personality........see cv,uasish,saint......meet them ,talk to them..........u shall realise what i mean
so ta.........do u know?
..........of course not........only some aspect.
first study maxim.........
1]price reflects definitely all known things..........and expected event,but not acts of GOD........swiftly reacts.....to reach new equilibrium.
2]study of past........shows on similar type of info/condition how it may behave....based on human participant on market.
3]prediction of price impossible..........early trend change allow u chance to earn by trend continuity. those short players on nifty.......r still earning from jan'08.......though definitely book profit and derisk.....as per their depth on market.
4]throw away why?........learn to react........think on probability
5] classical ta believes in pattern ,skill of analyst to read market psychology
6] modern ta.....stresses on statistical interpretation of chance, programme generated signal and condition of its validity.
............................................
btw......skill of mm and skepism + survival instinct is order of day in modern indian market
to attack ta u have to understand it...........dont be grapes r sour.
basic concept..........price reflect all info.......is true.infact modern economists use this as leading indicator for a country/economy.
study of past.......for predicting future.......here is click......it suggests psychology of market participants..........nor the future behavior of them, so put current fad in light,how many old timers in market.........u understand the deviation.the model suggests
.....condition being same its repeatable.....not otherwise.
pattern study..........its workable those who know it.......for others a storytelling tool[analyst..or critics, i know it before...........aree.......yaaar.....how much u have earned from market to comment]..........so study pattern failure............reason behind it,on what...........condition of economy they r predictive.
.....................
yes key word is predictive...........i talk with some of my associate.........yes they write..........this shall move up, this is risky........wait for long term signal........all thing as they r guided to write..........as if editor suggesting.......this story.....u bring to publish tomorrow...........situation is grim .........any tom ,dick , harry can tell.........fact is when reincarnation of bull shall occur?.........i dont [email protected] may come...........that only creates support........however........for daytraders..........its lovely market.
why daytraders?.....its because they dont bother.........that the hell.........news suggest........hulla bulla.......of fundamentals.........simply see gap down . impact of momentum.........and then as per preferred plan flow with the flow to earn money.a definite in/out pt is there........timing skill they use.......software based signal they follow
..................
u cant earn by it..........if u dont know it..........btw....r u able to throw out of mind info called garbage?
.....long days back i have suggested .....this volatile market characteristic.....u see 2year in india
here some ideas r given for trade learning
pl evaluate them as per ur level and pocket+zeal
.............................
take one month membership of www.masteryoftrading.com
read the idea of traderji.
............
download from 4shared .......key word 'technical analysis'
read them at least 1yr
similar key word........'trading'........read again 1 yr
.......
read any financial newspaper........see market reaction of it. dont trade......just see the impact of news.
......
take any software......go detail into it..........dont take my mistake like half knowledge.learn @deep ....ms/ag/omni/mt........any one is good.........i dont amibroker.....so i cant comment......particularly understand scan/exploring.
.....
listen to any pro teacher...........they have provided trade atleast 5yr........otherwise he is on same boat.......a snake oil vendor.
they can tell u in short a vague idea .
learn to think and implementation of stop.
................
take backoffice operation seriously.........more money i have lost by fraud/theft ....by broker.
..............trade jounal; is must.
............
a discussion like with ss very healthy.........who has some broad indicator
........
develop an iron solid psychology to have faith in u ,not tipstar.
........
understand basic fundamental moneymarket/interest rate/inflation......and what drives a sector........this is imp.
............for daytrader........neutral mind most imp.
swing trader.........experience
position trader.............understanding how other players shall behave.
........what type of ur personality.............suitability /matching counts in long run
................................
market will always provide oppurtunity..........but without...proper knowledge/survival skill it can kill u.
........a list of weak pt ...........must to develop plan to overcome them.......a cunning investor can buy bharati @25......10000...........add on 20000 @38.........50000......@72
............sell half @380...............others @760..............is not my cup of tea......i salute that investor..........he knows how to invest.........a different of ball game.
btw......he never try in daytrading.........in bengali ......one phrase...'jole kumir danwa baagh'..........be a crocodile in water or a tiger in forest-land,.........respect ur zone also of opponent.............simple saying .......bulls make money,also bears.........pigs r to be killed,..........remember always.
..........................................
many a pro guide how to trade..........provided u have element.........they r not snake oil seller[nor a failed trader/ an operator]
..........for beginning understand www.trend-dynamics.com and tradingmarkets.com
.................
with regards
let us see what we can learn now.............
all fools now understand ........media hype.
6month bear market ......now reqd analysis.......what can make market........intermediate term bearish........or an oppurtunity to buy.
good thing is poor fundamental........question for major hype players........where all moneys r gone?
what gone backoutside india..........simply forget.........what in india.........mf r sitting on cash
key is election or no election
election is better for bull.......at stability it flourishes........most super investors in india r sitting idle.....but play small in day trade......as entertainment.
sector rotation theme gets priority.......also bma[broad market analysis]
..............................
best concept........as per fund manager..........aggressive buy in out of turn sector.......e.g.......december buy of software sector
& Prediction:=
All rational people will agree that there is uncertainty in the
stock market, that predicting where prices will go is foolish.
In Science we know how cloud is being formed but can you guess that the most scientifically
developed nations CANT get their Weather Forecast right upto 65 % time.Govt. of each
Republic we see in a political map has a Weather Forecast deptt,think about the combined
Billion Dollars World spend each month !! and through decades of experience;Data; pool of
Statelites;these Guys cant get the Forecast RIGHT.
Then we with a computer & Data & some knowledge have the audacity to think we can Predict
Price,where it involves millions of trades with million different emotion & intention.
Atleast in case of Weather we have 100 % scientific knowledge how & what of Weather.
We think that we can predict where stocks will go, that is the reason we trade the market,
to make money from our predictions.
But no one can predict the market with absolute certainty. Therefore, you have to stop
looking at trading ONE trade at a time. Imagine what would happen to the Mattka owner
who looked at their gambling business one bet at a time. The Mattka can not predict who
will win the SuperLotto or what the next 'Patta' drawn in a game of zero to nine will be.
It can be Ekka or Panja the Operator does not bother they don't try.
Becoz in the Long Haul Probability is going to play in their Favour this Simple fact is
known from the Casino owners of Las Vegas to the 'Mattka' operators of Gujrat.The Gambler
plays AGAINST the House,the House wins by Long Haul as probability is stacked in their
favour.
What the casino does, and what we as a trader should be doing, is trading the probability
of what will happen. The casino makes money because they know what will happen over the
next 1000 hands of blackjack.They have an edge.
The question is, do you have an edge in the market?
Are you trading a strategy that assures you a profit over a large number of trades? If you
are serious about making money in the market, you should be able to define the expected
out come of your trading strategy in the same way that a casino can predict their
profitability from millions of dollars wagered in the pursuit of 21.
How do you calculate your edge? Simply:
((Profit of a successful trade times the probability of a successful trade)
- (loss of an unsuccessful trade time the probability of an unsuccessful trade
As an example, a trade that has a 30% chance of making Rs 5000 and a 70% chance of losing
Rs 1000 has an expected profitability of Rs 800.
Here we see how even a trade that has the odds stacked against it is worth taking because
it has a positive expected outcome. If you make this trade enough times, you will average
Rs 800 in profit per trade.
This means we need to set out on a study to determine the probabilities of profit and loss
for a trading strategy. Establish a set of rules and then test them over a large sample of
trades to determine the expected value of the trade.
But, if we find a trading strategy that has a profitable expected value, are we assured of
success in the same way a casino is assured a profit hosting games of blackjack?
No. In blackjack, there are rules enforced by the casino. The player must give the casino
their money if they go over 21. They must give their money if they have a hand that is
lower than the dealer.
In trading, there is no one to enforce our well tested trading rules except WE. In the
heat of the trading moment, when WE must decide whether to exit the trade at the stop loss
point or hold out for a turnaround, it is only up to US. When we have the choice of
selling for a profit or continuing to hold until we get the sell signal ;though our strategy was
tested for, it is only up to US.
............a sixer from uasish.............And we, assuming we are a normal human being, are likely to break our own trading rules.
Why?
Because we avoid pain and pursue pleasure. We lack confidence in our strategy because
of our recent experience. We think we can use our better judgment based on what we
are seeing NOW in the Price. We lose your focus.
These are the things that turn the relatively simple pursuit of making money in the market
in to a frustrating, mind numbing and stressful process. Who is at fault?
Only us.
..............Can the Kolkata Meet Indicator be used in Day Trading.
If used inappropiately will have considerable influence in the outcome of your
trading plan.
We Trade Price,hence 1st of all we have to find the Greater Trend ,there a Longer
term say 144 period Weighted MA to find What is the Slope (-)ve or (+)ve.
Then say EoD pivots to find the General Trend.After we get the GT (Greater Trend)
by WMA slope & EoD Pivots we then look at current on going Trend.
Current Trend is strictly only by Saint's HH HL OR LH LL.
Here when we get the GT & CT ,we trade only towards the GT means whenever CT ,in its
wave form is towards GT we take only those trades.
Here we must also keep in mind the
Reaction areas ,that is EoD's R3 R2 R1 P S1 S2 S3 & EoD's Fib levels,becoz our trades
flow may get stalled or reversed on those reaction areas.
Say we get a workable few points ROOM between these reaction points,where both GT & CT
in same direction we take those trades.Maybe in 5& half hours there may be only 2-3
trades but we take only those trades no other trades.For consistence we look for High
probability trades only.
These trades have greater probability of Wins.
Now where Kolkata meet Indicator comes into picture.
It can work as a visual aid to identify the current trend of PRICE (HH HL LH LL)
Change of “slope” green/red will define Wave Highs and Lows (Sanjay coded that in Ami)
Here plz be clear the Indicator change in color is not Waves High Lows but the Price action
prior to that has influenced the indicator to change it's color hence High Low is in PRICE.
You don’t gain a lot but you can have nice quick visual reference of the current
direction.
You may reduce whipsaws on sudden price spikes that can point to “false”
lows/highs especially in fast timeframes or less liquid instruments.
What are the potential shortcomings?
None as long as you use it only as a visual aid.
If you are not careful you can misinterpret price and take a trade based only on
the indicator and not on price analysis + you may not take a valid trade because of the
indicator.
What is the Trade Off ?
You introduce an indicator
to improve efficiency and you end up losing consistency. There are millions of cases that
the opposite will happen; the indicator will get you in without exact confirmation of
price HH/LL but the key issue here is to recognize that every time you introduce an
indicator you will have to deal with this tradeoff. Moreover, it’s very important to
recognize the exponential implications of this in your trading plan. On a daily chart
where waves are naturally smoother but look at the potential implication of introducing a
25 HMA in a 8 tick chart where you can have 100 waves in 1 hour multiply that by the
implications of 2 or 3 indicators you may decide to use, you may end up in a net of
conflicting signals that will certainly be reflected in bad trading decisions.
2nd Use of the Indicator.
After all my job done that is GT CT ,Room between reaction points ,everything done
we still have to pull the trigger,put the trade.Any delay will reduce my r/r,hence we
need to TIME the Entry.
It can be above last bar high or below last bar low or crossing 50 % level of last bar.
This we will have to work out which suits me best.
Here the indicator may help,close above/below the indicator as a trigger or you can wait
for a conservative change of “slope” green/red for confirmation.
Once again inspite being a repetation ;we do not trade Indicators we trade Price it is just
a trigger.
What is the good of it?:
It can give you an objective entry point, reduce drawdowns and identify warnings that
the trade is going to be bad and/or clear exit signals.
What are the potential shortcomings?
Late entries and exits
......................................
Sorry for taking a long break. Let's start discussing the practice part.
The first and foremost thing to have is to practice absorbing the NOISE.
There is lot of subjectivity in defining this NOISE.
Practically speaking the NOISE is nothing but what is happening in the security's price above or below the entry levels before either the stop is hit or the target is hit. So anything between the entry and stop or entry and target is noise.
This noise varies according to the chart periodicity. The noise for a person who trades using Daily charts might not be the noise for the Trader who uses 30 min. charts. Hope it is not confusing.
So, first we have to understand what time frame we are using in charts to initiate the trades. And then the entry, stop and exit. Anything in between is a noise. So while practicing, just go least bothered what ever happens to the security in between. Wait to get stopped out or to reach the target.
If we start paying heed to the movement of the asset price in between, then we will start changing the trade plan and spoil the trade. This changing the trade plan might help us once or twice, but finally it makes us losers in the market.
So, once the trade is initiated with a good trade plan, never change it. To go that rigid, before initiating the trade itself- try visualising the scenarios with "what if" thought in the mind. "What if this doesn't go like I planned", then we will start thinking in the other way and understand one more route
for the security's price movement. Like this if we are ready while designing the trade - with the Road Map of the price move - then the price behaviour won't surprice us and it further helps un in going stable and absorbing the noise.
I remember one incident happenned in the recent past. It was discussed in the chat room. It happened to one of the veterans of our Forum.With due apologies to him I am here mentioning it. He initiated trade in Infosys. And booked a huge profit in it. But this was done out of trade plan. The trade was
initiated keeping Daily charts in the mind and exit took place just for the reason the security was tracked intraday. ofcourse it was a profitable trade. And that member must have taken one more entry into it at a good price and must be running it still- as he is that wise in practicing technicals. Why I mentioned it here is to tell that nobody is foolproofwhen dealing with the
markets. So time and again we should protect ourselves.
It is better to make a record for the trade plan and track it. We should look into it whenever we try to do something with that security in which we are already in, to understand the original trade plan- which should preferably be with the Security's Price Road Map.Then we will get reminded of the trade plan. And this helps us in sticking to it. It will work wonders my friends.
Thanks and happy practicing Technicals
AJAYKUMAR
His definition on noise helped me a lot in building a position sizing strategy
........Originally Posted by CreditViolet
Ok, so we are talking DSP here.Talking abt filters, MAs are low pass filters while derivatives of SMA etc like MACD are hi-pass filters.But before we get into all that, lets talk about the time-series itself.
Ok, so a stationary series is one whose statistical properties are constant along its length. Its quite well documented that financial time-series are heavy-tailed and not stationary.Volatility clustering is another important topic, i.e tendency of autocorrelation in volatility.Given all these different conditions, I think its absolutely treacherous to try and detect signals in all this noise.Theres just too much randomness to deal with here than most people think and most are 'getting' fooled by it.
What I saw on this thread was a propensity to design 'buy and sell' systems but absolutely no effort was made into understanding the data itself. For me atleast, the buy-sell signal part hardly is the important issue, the key thing is to beat randomness.I have attached a map of my development process, the 'Analysis & Mining' is the primary area of my development. Another thing it does is to help with 'intuitive' understanding of markets. Ofcourse people are not interested in such undertakings, everyone wants to quickly get to the 'buy-sell' stage. Again, as I have said before, its not bad at all or something I complain about, as Napoleon once said - " Never interrupt an enemy when he is making a mistake". Ofcourse I am talking generally and not about you guys. The effort you guys have put in here is commendable but IMHO this is not the way to go around about system design.
trading is an intellectual persuit with greed driven mechanism,not suitable for all.
..........honesty zeal to learn,stoicism........be in present,visualisation......action,cool nerve.
....................
bma........broad market analysis........long drawn interrelated idea
concept of fad..........sense of smelling danger.
........................
after this comes ta........to know how other trader shall behave+price confirmation concept.
...............
next come data +software...........synchronisation........signal development /backtesting
............implementation
after that polishing what works for u and unlearning all other things.last thing is very difficult.....indians have tendency of garbage in..........though cv relentlessly suggests to check utility first and sharpen own tool.
btw...........nowadays forex concept , from viratech data all currency pair and chart study of world index.............suggest..........money is moving out from which country and entering where.
Hope now all have a fair idea about the capital mkt & the Risk involved.
intraday........n any chart in one axis is Time,hence if now we compress the charts say from weekly figs to monthly or even to yrly,we will find a clear Trend or a bias to (+)ve or (-)ve.
If that be so then WHY we expand the time frame to intraday so the volatility is more or noise is more.
I am RISKING more ,for what gains ,brokerage,margin,thrill,working from home.
Before indulging in this More Risky aspect ,plz ask what do i gain.
And on what LOGIC this seems very easier task.
........................
Day trading is to have complete control on your every emotion & 1 slip = 1 or more loss & remember few good trades are always what lures people to day-trade & that's when trouble starts, then they dont give up even in losses & its a battle of ego.
.................Nobody can disagree that this is Risky,if so then the Outcome is UNCERTAIN.
What is the PROBABILITY of the outcome.So TEST on past incedents to find out.
How do we know that all those past performances where not RANDOM.
Was Big Bang a Random ,a evolutionary ? a scientific process ? Can those be measured to find out or based on BELIEF ? What should we do ?
Gosh i thought day-trading was an easier job ."Shrewd, Sharp, Silent" are only few traits one needed to experiment for trading, just my obeservation though.
I want to learn as much as I can and keep learning in future at the same time start very small and make it big later.
I am willing to risk a small amount of my hard earned money for it
.............. Capital Mkt is a place where people always trade with "Calculated Risk".
There are people who MAY not know the extent of this Risk & trade profitably upto some time & there may be people who knows & trade un-profitably.
Before plunging 1 should know.Even the Risk Appetite varies from people to people
.............1. use a certain limit for day trading (as of now its 10-20k will increase gradually to 40k no more)
2. enter every trade with stoploss. thus limiting my losses
3. as gain occurs increase stoploss to seal it.
4. each day transfer my gain to account and start with same amount of money. enter only known scripts and control emotions. If i lost a good entry point, will wait for later time ..............................Is it necessary that you HAVE to day-trade ? Plz trade based on EoD data .Many a people term it as Swing Trading.
......consider myself amongst the lowest grader here..."
I was at that catogory only,just been promoted to next category recently.
"By swing trading due u mean buying at EOD and sell tomorrow morning or 2-3 day later at around 5% gain or less..... ???"
With 3-5% Gain (after adjusting brokerages) can be next day or few days until Stop Loss Hit.
............................a gem from asish.
Precaution? Lots my friend (as Saint would say). Well for some unfriendly talk.
You think? that means you DONT KNOW. What makes you think?
Stoploss limiting losses? How much? And how accurately?
Transfer gains? Great! And as loss occurs? where do you replenish it from?
How would you control emotions? And how do you know that YOU WOULD control emotions?
........................UNDERSTAND THE DEPTH IN QUESTIONING!!!Imagine somebody thinking that F&O means High Leverage hence my Wins can give me double/triple returns on Equity !! are we aware about the Probability part.
We all trade in F&O ,but where Risk is visible & manageable.
What you are referring to is intra-day noise. This effects short term or intra-day traders. Mid to long term traders generally avoid this intra-day noise to ride the trends.
When you look at the performance of the stock market at the end of a trading day it can be hard to work out why shares have either risen or fallen in value.
Broadly speaking, share prices are influenced by news or information: new data on employment, manufacturing, directors’ dealings, political events or even the weather, all kinds of news can influence the way shares move.
The health of the economy has a fundamental influence on share prices because it is ultimately responsible for driving company profits. Broadly speaking, if the economy is growing, company profits improve and shares will become more highly valued. If the economy is weakening, company profits will fall and share prices will go down.
Investors look at a vast amount of data to try and work out what is going to happen to the economy and shift their portfolios before the events occur. This is why you will often see markets move well ahead of an actual event occurring. You may, for example, get little reaction from the stock market when interest rates rise. This is because investors have already anticipated the shift months in advance and adjusted their portfolios beforehand.
You can usually assume that the stock market will anticipate moves in the economy by around six to nine months. So if you want to stay ahead of the game you will need to follow price data as closely as the professionals.
Investor sentiment can lead to irrational buying or selling of shares and result in bull and bear markets. A bull market is when share prices rise while a bear market is when they fall. In the technology boom of the late 1990s, for example, investors paid extremely high prices for shares and ignored traditional valuation measures, such as P/E ratios. This carried on until 2000 when investors belatedly realised these shares has risen too far and resulted in a three year bear market in shares.
__________________
Best Wishes!
some imp. question asked first.............what u r? know u.........ur strength.....weakness
know market........its dynamics.........with experience more ,u learn more.....it offers oppurtunity.........where u dont know or read wrongly............its threat.......may kill u.
survive first then............swot.
2nd level..........where u stand up better than others in this arena?learn debrief
how much info u can handle ?.......can u represent them objectively,........pref mathematically...........
........u have to be crystal clear.........sharp'....by cv.......apply as oppurtunity comes.
.......develop a harmony in u.........a trading personality........see cv,uasish,saint......meet them ,talk to them..........u shall realise what i mean
so ta.........do u know?
..........of course not........only some aspect.
first study maxim.........
1]price reflects definitely all known things..........and expected event,but not acts of GOD........swiftly reacts.....to reach new equilibrium.
2]study of past........shows on similar type of info/condition how it may behave....based on human participant on market.
3]prediction of price impossible..........early trend change allow u chance to earn by trend continuity. those short players on nifty.......r still earning from jan'08.......though definitely book profit and derisk.....as per their depth on market.
4]throw away why?........learn to react........think on probability
5] classical ta believes in pattern ,skill of analyst to read market psychology
6] modern ta.....stresses on statistical interpretation of chance, programme generated signal and condition of its validity.
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btw......skill of mm and skepism + survival instinct is order of day in modern indian market
to attack ta u have to understand it...........dont be grapes r sour.
basic concept..........price reflect all info.......is true.infact modern economists use this as leading indicator for a country/economy.
study of past.......for predicting future.......here is click......it suggests psychology of market participants..........nor the future behavior of them, so put current fad in light,how many old timers in market.........u understand the deviation.the model suggests
.....condition being same its repeatable.....not otherwise.
pattern study..........its workable those who know it.......for others a storytelling tool[analyst..or critics, i know it before...........aree.......yaaar.....how much u have earned from market to comment]..........so study pattern failure............reason behind it,on what...........condition of economy they r predictive.
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yes key word is predictive...........i talk with some of my associate.........yes they write..........this shall move up, this is risky........wait for long term signal........all thing as they r guided to write..........as if editor suggesting.......this story.....u bring to publish tomorrow...........situation is grim .........any tom ,dick , harry can tell.........fact is when reincarnation of bull shall occur?.........i dont [email protected] may come...........that only creates support........however........for daytraders..........its lovely market.
why daytraders?.....its because they dont bother.........that the hell.........news suggest........hulla bulla.......of fundamentals.........simply see gap down . impact of momentum.........and then as per preferred plan flow with the flow to earn money.a definite in/out pt is there........timing skill they use.......software based signal they follow
..................
u cant earn by it..........if u dont know it..........btw....r u able to throw out of mind info called garbage?
.....long days back i have suggested .....this volatile market characteristic.....u see 2year in india
here some ideas r given for trade learning
pl evaluate them as per ur level and pocket+zeal
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take one month membership of www.masteryoftrading.com
read the idea of traderji.
............
download from 4shared .......key word 'technical analysis'
read them at least 1yr
similar key word........'trading'........read again 1 yr
.......
read any financial newspaper........see market reaction of it. dont trade......just see the impact of news.
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take any software......go detail into it..........dont take my mistake like half knowledge.learn @deep ....ms/ag/omni/mt........any one is good.........i dont amibroker.....so i cant comment......particularly understand scan/exploring.
.....
listen to any pro teacher...........they have provided trade atleast 5yr........otherwise he is on same boat.......a snake oil vendor.
they can tell u in short a vague idea .
learn to think and implementation of stop.
................
take backoffice operation seriously.........more money i have lost by fraud/theft ....by broker.
..............trade jounal; is must.
............
a discussion like with ss very healthy.........who has some broad indicator
........
develop an iron solid psychology to have faith in u ,not tipstar.
........
understand basic fundamental moneymarket/interest rate/inflation......and what drives a sector........this is imp.
............for daytrader........neutral mind most imp.
swing trader.........experience
position trader.............understanding how other players shall behave.
........what type of ur personality.............suitability /matching counts in long run
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market will always provide oppurtunity..........but without...proper knowledge/survival skill it can kill u.
........a list of weak pt ...........must to develop plan to overcome them.......a cunning investor can buy bharati @25......10000...........add on 20000 @38.........50000......@72
............sell half @380...............others @760..............is not my cup of tea......i salute that investor..........he knows how to invest.........a different of ball game.
btw......he never try in daytrading.........in bengali ......one phrase...'jole kumir danwa baagh'..........be a crocodile in water or a tiger in forest-land,.........respect ur zone also of opponent.............simple saying .......bulls make money,also bears.........pigs r to be killed,..........remember always.
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many a pro guide how to trade..........provided u have element.........they r not snake oil seller[nor a failed trader/ an operator]
..........for beginning understand www.trend-dynamics.com and tradingmarkets.com
.................
with regards
let us see what we can learn now.............
all fools now understand ........media hype.
6month bear market ......now reqd analysis.......what can make market........intermediate term bearish........or an oppurtunity to buy.
good thing is poor fundamental........question for major hype players........where all moneys r gone?
what gone backoutside india..........simply forget.........what in india.........mf r sitting on cash
key is election or no election
election is better for bull.......at stability it flourishes........most super investors in india r sitting idle.....but play small in day trade......as entertainment.
sector rotation theme gets priority.......also bma[broad market analysis]
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best concept........as per fund manager..........aggressive buy in out of turn sector.......e.g.......december buy of software sector
& Prediction:=
All rational people will agree that there is uncertainty in the
stock market, that predicting where prices will go is foolish.
In Science we know how cloud is being formed but can you guess that the most scientifically
developed nations CANT get their Weather Forecast right upto 65 % time.Govt. of each
Republic we see in a political map has a Weather Forecast deptt,think about the combined
Billion Dollars World spend each month !! and through decades of experience;Data; pool of
Statelites;these Guys cant get the Forecast RIGHT.
Then we with a computer & Data & some knowledge have the audacity to think we can Predict
Price,where it involves millions of trades with million different emotion & intention.
Atleast in case of Weather we have 100 % scientific knowledge how & what of Weather.
We think that we can predict where stocks will go, that is the reason we trade the market,
to make money from our predictions.
But no one can predict the market with absolute certainty. Therefore, you have to stop
looking at trading ONE trade at a time. Imagine what would happen to the Mattka owner
who looked at their gambling business one bet at a time. The Mattka can not predict who
will win the SuperLotto or what the next 'Patta' drawn in a game of zero to nine will be.
It can be Ekka or Panja the Operator does not bother they don't try.
Becoz in the Long Haul Probability is going to play in their Favour this Simple fact is
known from the Casino owners of Las Vegas to the 'Mattka' operators of Gujrat.The Gambler
plays AGAINST the House,the House wins by Long Haul as probability is stacked in their
favour.
What the casino does, and what we as a trader should be doing, is trading the probability
of what will happen. The casino makes money because they know what will happen over the
next 1000 hands of blackjack.They have an edge.
The question is, do you have an edge in the market?
Are you trading a strategy that assures you a profit over a large number of trades? If you
are serious about making money in the market, you should be able to define the expected
out come of your trading strategy in the same way that a casino can predict their
profitability from millions of dollars wagered in the pursuit of 21.
How do you calculate your edge? Simply:
((Profit of a successful trade times the probability of a successful trade)
- (loss of an unsuccessful trade time the probability of an unsuccessful trade
As an example, a trade that has a 30% chance of making Rs 5000 and a 70% chance of losing
Rs 1000 has an expected profitability of Rs 800.
Here we see how even a trade that has the odds stacked against it is worth taking because
it has a positive expected outcome. If you make this trade enough times, you will average
Rs 800 in profit per trade.
This means we need to set out on a study to determine the probabilities of profit and loss
for a trading strategy. Establish a set of rules and then test them over a large sample of
trades to determine the expected value of the trade.
But, if we find a trading strategy that has a profitable expected value, are we assured of
success in the same way a casino is assured a profit hosting games of blackjack?
No. In blackjack, there are rules enforced by the casino. The player must give the casino
their money if they go over 21. They must give their money if they have a hand that is
lower than the dealer.
In trading, there is no one to enforce our well tested trading rules except WE. In the
heat of the trading moment, when WE must decide whether to exit the trade at the stop loss
point or hold out for a turnaround, it is only up to US. When we have the choice of
selling for a profit or continuing to hold until we get the sell signal ;though our strategy was
tested for, it is only up to US.
............a sixer from uasish.............And we, assuming we are a normal human being, are likely to break our own trading rules.
Why?
Because we avoid pain and pursue pleasure. We lack confidence in our strategy because
of our recent experience. We think we can use our better judgment based on what we
are seeing NOW in the Price. We lose your focus.
These are the things that turn the relatively simple pursuit of making money in the market
in to a frustrating, mind numbing and stressful process. Who is at fault?
Only us.
..............Can the Kolkata Meet Indicator be used in Day Trading.
If used inappropiately will have considerable influence in the outcome of your
trading plan.
We Trade Price,hence 1st of all we have to find the Greater Trend ,there a Longer
term say 144 period Weighted MA to find What is the Slope (-)ve or (+)ve.
Then say EoD pivots to find the General Trend.After we get the GT (Greater Trend)
by WMA slope & EoD Pivots we then look at current on going Trend.
Current Trend is strictly only by Saint's HH HL OR LH LL.
Here when we get the GT & CT ,we trade only towards the GT means whenever CT ,in its
wave form is towards GT we take only those trades.
Here we must also keep in mind the
Reaction areas ,that is EoD's R3 R2 R1 P S1 S2 S3 & EoD's Fib levels,becoz our trades
flow may get stalled or reversed on those reaction areas.
Say we get a workable few points ROOM between these reaction points,where both GT & CT
in same direction we take those trades.Maybe in 5& half hours there may be only 2-3
trades but we take only those trades no other trades.For consistence we look for High
probability trades only.
These trades have greater probability of Wins.
Now where Kolkata meet Indicator comes into picture.
It can work as a visual aid to identify the current trend of PRICE (HH HL LH LL)
Change of “slope” green/red will define Wave Highs and Lows (Sanjay coded that in Ami)
Here plz be clear the Indicator change in color is not Waves High Lows but the Price action
prior to that has influenced the indicator to change it's color hence High Low is in PRICE.
You don’t gain a lot but you can have nice quick visual reference of the current
direction.
You may reduce whipsaws on sudden price spikes that can point to “false”
lows/highs especially in fast timeframes or less liquid instruments.
What are the potential shortcomings?
None as long as you use it only as a visual aid.
If you are not careful you can misinterpret price and take a trade based only on
the indicator and not on price analysis + you may not take a valid trade because of the
indicator.
What is the Trade Off ?
You introduce an indicator
to improve efficiency and you end up losing consistency. There are millions of cases that
the opposite will happen; the indicator will get you in without exact confirmation of
price HH/LL but the key issue here is to recognize that every time you introduce an
indicator you will have to deal with this tradeoff. Moreover, it’s very important to
recognize the exponential implications of this in your trading plan. On a daily chart
where waves are naturally smoother but look at the potential implication of introducing a
25 HMA in a 8 tick chart where you can have 100 waves in 1 hour multiply that by the
implications of 2 or 3 indicators you may decide to use, you may end up in a net of
conflicting signals that will certainly be reflected in bad trading decisions.
2nd Use of the Indicator.
After all my job done that is GT CT ,Room between reaction points ,everything done
we still have to pull the trigger,put the trade.Any delay will reduce my r/r,hence we
need to TIME the Entry.
It can be above last bar high or below last bar low or crossing 50 % level of last bar.
This we will have to work out which suits me best.
Here the indicator may help,close above/below the indicator as a trigger or you can wait
for a conservative change of “slope” green/red for confirmation.
Once again inspite being a repetation ;we do not trade Indicators we trade Price it is just
a trigger.
What is the good of it?:
It can give you an objective entry point, reduce drawdowns and identify warnings that
the trade is going to be bad and/or clear exit signals.
What are the potential shortcomings?
Late entries and exits
......................................
Sorry for taking a long break. Let's start discussing the practice part.
The first and foremost thing to have is to practice absorbing the NOISE.
There is lot of subjectivity in defining this NOISE.
Practically speaking the NOISE is nothing but what is happening in the security's price above or below the entry levels before either the stop is hit or the target is hit. So anything between the entry and stop or entry and target is noise.
This noise varies according to the chart periodicity. The noise for a person who trades using Daily charts might not be the noise for the Trader who uses 30 min. charts. Hope it is not confusing.
So, first we have to understand what time frame we are using in charts to initiate the trades. And then the entry, stop and exit. Anything in between is a noise. So while practicing, just go least bothered what ever happens to the security in between. Wait to get stopped out or to reach the target.
If we start paying heed to the movement of the asset price in between, then we will start changing the trade plan and spoil the trade. This changing the trade plan might help us once or twice, but finally it makes us losers in the market.
So, once the trade is initiated with a good trade plan, never change it. To go that rigid, before initiating the trade itself- try visualising the scenarios with "what if" thought in the mind. "What if this doesn't go like I planned", then we will start thinking in the other way and understand one more route
for the security's price movement. Like this if we are ready while designing the trade - with the Road Map of the price move - then the price behaviour won't surprice us and it further helps un in going stable and absorbing the noise.
I remember one incident happenned in the recent past. It was discussed in the chat room. It happened to one of the veterans of our Forum.With due apologies to him I am here mentioning it. He initiated trade in Infosys. And booked a huge profit in it. But this was done out of trade plan. The trade was
initiated keeping Daily charts in the mind and exit took place just for the reason the security was tracked intraday. ofcourse it was a profitable trade. And that member must have taken one more entry into it at a good price and must be running it still- as he is that wise in practicing technicals. Why I mentioned it here is to tell that nobody is foolproofwhen dealing with the
markets. So time and again we should protect ourselves.
It is better to make a record for the trade plan and track it. We should look into it whenever we try to do something with that security in which we are already in, to understand the original trade plan- which should preferably be with the Security's Price Road Map.Then we will get reminded of the trade plan. And this helps us in sticking to it. It will work wonders my friends.
Thanks and happy practicing Technicals
AJAYKUMAR
His definition on noise helped me a lot in building a position sizing strategy
........Originally Posted by CreditViolet
Ok, so we are talking DSP here.Talking abt filters, MAs are low pass filters while derivatives of SMA etc like MACD are hi-pass filters.But before we get into all that, lets talk about the time-series itself.
Ok, so a stationary series is one whose statistical properties are constant along its length. Its quite well documented that financial time-series are heavy-tailed and not stationary.Volatility clustering is another important topic, i.e tendency of autocorrelation in volatility.Given all these different conditions, I think its absolutely treacherous to try and detect signals in all this noise.Theres just too much randomness to deal with here than most people think and most are 'getting' fooled by it.
What I saw on this thread was a propensity to design 'buy and sell' systems but absolutely no effort was made into understanding the data itself. For me atleast, the buy-sell signal part hardly is the important issue, the key thing is to beat randomness.I have attached a map of my development process, the 'Analysis & Mining' is the primary area of my development. Another thing it does is to help with 'intuitive' understanding of markets. Ofcourse people are not interested in such undertakings, everyone wants to quickly get to the 'buy-sell' stage. Again, as I have said before, its not bad at all or something I complain about, as Napoleon once said - " Never interrupt an enemy when he is making a mistake". Ofcourse I am talking generally and not about you guys. The effort you guys have put in here is commendable but IMHO this is not the way to go around about system design.
