Hi friends,
here i try to put some basic for TA, it may be for newbies .
Starting with old thread : Q and A by traderji (once i get a scope to learn from him) The answer given by TRADERJI in 1st person(I)
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As I was a total newbie in 1980, I had to undergo training in price movements with a number of professional traders where I learnt my first and most valuable lesson "The Trend is Your Friend".
I prefer trading the medium to long term trends although I do sometimes trade short term trends lasting a few days.
I personally prefer the conventional simple or exponential MA and MACD over the Vidya as I have been using them for a looong time now. I think the MACD is an excellent indicator cause it behaves both as a oscillator (by providing divergences) and a trend following indicator
CMO is used in the calculation of Vidya. I do not use the KAMA or Chaikin Oscillator.
Indicators are a personal choice and most indicators give reliable trading signal. However the trick is to use them often over a long period of time to understand how they behave under different market conditions. Then only will you get the desired results from that indicator.
About 30-40% of my trades are not profitable. The Maximum Loss I take on any single trade does not exceed 1% of my trading capital.
It does not take too long to cover up any loss as I trail profitable trades which enables me to capture a good 70-90 % of its trended move.
I do not do intra-day trading. I prefer positional trades where the holding period can be anywhere between weeks to months.
My method of selecting stocks to trade in are different. I do not use any technical indicators. I visually scan through the bar charts every day/week for consolidation/congestion patterns and trade breakouts of those patterns.
Here is an anatomy of my recent trade!
If you look at the attached daily chart of the NSE Nifty below you will notice that the Nifty after retracing 50% of this previous fall went into a period of consolidation for about 2 weeks. Since the underlying trend was bearish all I did was to put in a sell stop order 10 points below the low of 3056.00.
As we all know the market triggered the sell stop order on the 17th and I was short on the Nifty. Once short in the trade I put in a trailing stop order at the previous 3 bar high. I also always make sure that the difference between my entry price and stop loss level multiplied by the number of contracts does not exceed 1% of my trading capital.
Once in a trade I keep adding more positions (as soon as the current stoploss reaches break even level) in the direction of the profitable trend.
I primarly trade equities in both cash and futures. I find the equities market more profitable and easier to trade.
I prefer the ERS when compared to the RSC. The ERS is superior because it compares a single stock to all the other stocks in the market and ranks that stock from 1 to 99. The RSC drawback is that it only compares a single stock to another single stock or index.
f I go long I use the previous 3 bar low as my stoploss.
I personally use chart patterns as mentioned in my earlier post. If you are seriously interested in chart patters I would suggest you get Encyclopedia of Chart Patterns
I swing trade breakouts of chart patterns like pennants and flags.
For exampe after a stock has made a new three month high on the daily chart (this confirms an uptrend) I wait for a consolidation of at least a week (during which time that chart could form a pennant or flag)
I then go long only on a close above the previous 5 day high and ride the trend with a trailing stop below the previous days low.
__________________
here i try to put some basic for TA, it may be for newbies .
Starting with old thread : Q and A by traderji (once i get a scope to learn from him) The answer given by TRADERJI in 1st person(I)
..........................................................................
As I was a total newbie in 1980, I had to undergo training in price movements with a number of professional traders where I learnt my first and most valuable lesson "The Trend is Your Friend".
I prefer trading the medium to long term trends although I do sometimes trade short term trends lasting a few days.
I personally prefer the conventional simple or exponential MA and MACD over the Vidya as I have been using them for a looong time now. I think the MACD is an excellent indicator cause it behaves both as a oscillator (by providing divergences) and a trend following indicator
CMO is used in the calculation of Vidya. I do not use the KAMA or Chaikin Oscillator.
Indicators are a personal choice and most indicators give reliable trading signal. However the trick is to use them often over a long period of time to understand how they behave under different market conditions. Then only will you get the desired results from that indicator.
About 30-40% of my trades are not profitable. The Maximum Loss I take on any single trade does not exceed 1% of my trading capital.
It does not take too long to cover up any loss as I trail profitable trades which enables me to capture a good 70-90 % of its trended move.
I do not do intra-day trading. I prefer positional trades where the holding period can be anywhere between weeks to months.
My method of selecting stocks to trade in are different. I do not use any technical indicators. I visually scan through the bar charts every day/week for consolidation/congestion patterns and trade breakouts of those patterns.
Here is an anatomy of my recent trade!
If you look at the attached daily chart of the NSE Nifty below you will notice that the Nifty after retracing 50% of this previous fall went into a period of consolidation for about 2 weeks. Since the underlying trend was bearish all I did was to put in a sell stop order 10 points below the low of 3056.00.
As we all know the market triggered the sell stop order on the 17th and I was short on the Nifty. Once short in the trade I put in a trailing stop order at the previous 3 bar high. I also always make sure that the difference between my entry price and stop loss level multiplied by the number of contracts does not exceed 1% of my trading capital.
Once in a trade I keep adding more positions (as soon as the current stoploss reaches break even level) in the direction of the profitable trend.
I primarly trade equities in both cash and futures. I find the equities market more profitable and easier to trade.
I prefer the ERS when compared to the RSC. The ERS is superior because it compares a single stock to all the other stocks in the market and ranks that stock from 1 to 99. The RSC drawback is that it only compares a single stock to another single stock or index.
f I go long I use the previous 3 bar low as my stoploss.
I personally use chart patterns as mentioned in my earlier post. If you are seriously interested in chart patters I would suggest you get Encyclopedia of Chart Patterns
I swing trade breakouts of chart patterns like pennants and flags.
For exampe after a stock has made a new three month high on the daily chart (this confirms an uptrend) I wait for a consolidation of at least a week (during which time that chart could form a pennant or flag)
I then go long only on a close above the previous 5 day high and ride the trend with a trailing stop below the previous days low.
__________________