$$my success story and my live tread[nifty&option]$$
- Thread starter sumitdasjoshi
- Start date
- Tags daily income live trade niftyoption profit loss system
Hi
I just found this file in my archive and I wish it will expand your knowledge about trading.
Technical analyses are important for a trade. There has been a lot written about it in traderji. If we are able to read indicators the right way, we can reduce our risk when entering a trade. Using only one indicator is as risky as using the wrong money management. If we learn to combine different indicators, we will trade more safe. We do not need many indicators, otherwise we can get easy confused, as you may know by yourself. There are many indicators out there in the market and most of them have different names, but do indicate the same thing. John Murphy is one of the big ones when it comes to chart analyses. He will explain here, how to combine indicators and what this indicators indicate.
Here it goes :
John Murphy's laws of technical trading
John Murphy's ten laws of technical trading explain the main ideas to beginners and streamline the trading methodology for experienced practitioners. The
precepts define the key tools of technical analysis and show how to use them to identify buying and selling opportunities.
1. Map the trends.
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale 'map of the market' provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
2. Determine the trend and follow it.
Market trends come in many sizes - long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term trend for timing.
3. Find the low and high of it.
The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pull backs. In other words the old 'high' becomes the new 'low'. In the same way, when a support level has been broken it will usually produce selling on subsequent rallies - the old 'low' becomes the new 'high'.
4. Know how far to backtrack.
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pull back in an up trend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the line.
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
6. Follow that average.
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4 and 9 day moving averages, 9 and 18 day, 5 and 20 day. Signals are given when the shorter average crosses the longer. Price crossings above and below a 40 day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
7. Learn the turns.
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for stochastics are 80 and 20. Most traders use 14 days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. Those tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used for intra-day charts.
8. Know the warning signs.
Trace MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a histogram because vertical bars are used to show the difference between the two lines on the chart.
9. Trend or not a trend?
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX line favors oscillators. By plotting the direction of the ADX line, one is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Know the confirming signs.
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
I wish you a nice weekend
DanPickUp
I just found this file in my archive and I wish it will expand your knowledge about trading.
Technical analyses are important for a trade. There has been a lot written about it in traderji. If we are able to read indicators the right way, we can reduce our risk when entering a trade. Using only one indicator is as risky as using the wrong money management. If we learn to combine different indicators, we will trade more safe. We do not need many indicators, otherwise we can get easy confused, as you may know by yourself. There are many indicators out there in the market and most of them have different names, but do indicate the same thing. John Murphy is one of the big ones when it comes to chart analyses. He will explain here, how to combine indicators and what this indicators indicate.
Here it goes :
John Murphy's laws of technical trading
John Murphy's ten laws of technical trading explain the main ideas to beginners and streamline the trading methodology for experienced practitioners. The
precepts define the key tools of technical analysis and show how to use them to identify buying and selling opportunities.
1. Map the trends.
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale 'map of the market' provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
2. Determine the trend and follow it.
Market trends come in many sizes - long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term trend for timing.
3. Find the low and high of it.
The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pull backs. In other words the old 'high' becomes the new 'low'. In the same way, when a support level has been broken it will usually produce selling on subsequent rallies - the old 'low' becomes the new 'high'.
4. Know how far to backtrack.
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pull back in an up trend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the line.
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
6. Follow that average.
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4 and 9 day moving averages, 9 and 18 day, 5 and 20 day. Signals are given when the shorter average crosses the longer. Price crossings above and below a 40 day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
7. Learn the turns.
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for stochastics are 80 and 20. Most traders use 14 days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. Those tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used for intra-day charts.
8. Know the warning signs.
Trace MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a histogram because vertical bars are used to show the difference between the two lines on the chart.
9. Trend or not a trend?
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX line favors oscillators. By plotting the direction of the ADX line, one is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Know the confirming signs.
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
I wish you a nice weekend
DanPickUp
helo friends i am back now [/CENTER]so far i am not posting my trades because i am geting huge losses form the market so let me be honest with you in this month only i had lost around 25 thousand rupees yes that is right, but dont worry now because i had those losses so it made me think again that what my system is laking or where i am making mistakes, and it is for a good because right now i have bit more knowledge and lot of thing which i dont know before.
well i have now know one thing for sure that whatever system you guys use and whatevere is out come and how much profitabel a system it will never be the same and that much profitabel for every market may be if you have the system wich made you tun of money in the trading market it will not work in raginng or choppy market it will also give huge loss in choppy market, so first thing if we want to make money in any market we have to choose right system and we should know wich market we are dealing with, well i have read a bit and addopt a new system, i also add divergance to my trading kit and today i will show you how wonderful it work if you know where the divergance is, and from tomarrow i will post all my trade if it is in profit or if it is in loss and i will also do some paper trade in option andif results are better than we will also do some option trade.
thanks for your support.
Trend is always there. All you have to do is identify it. The main thing to consider is that trend might not be there in the time frame you are trading in, but some other. For eg. trend might not be there in 15 minute chart, but be present in 5 minute chart. Or it is not present in 5 minute chart, but present in 3 minute chart. Or not in 3 Minute chart, but present in Tick Chart. All you gotto to do is identify it. Just my 2 cents.
as i told you before that i will post some chart and show you where the divergance are and how we can make over trade i how it will help one more thing that it is not neccasary that divergance will always work.
bearish well let me tell you about bearish diverg when price is making higer high and osilater is making lower highs
bulish diverg when price is making lower lows ossilater is making higher lows
as i pointed as a 1 one can take a short there and cover it later and,
as i pointed as 2 one can take long here and cover it later.
http://yfrog.com/4bnifty3g
bearish well let me tell you about bearish diverg when price is making higer high and osilater is making lower highs
bulish diverg when price is making lower lows ossilater is making higher lows
as i pointed as a 1 one can take a short there and cover it later and,
as i pointed as 2 one can take long here and cover it later.
http://yfrog.com/4bnifty3g
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