Teach A Man To Fish And.........

[Khokan]

Saint,
Thanks 4 making the position a bit clear..
Pal

 

[ajaygodha]

My previous post got deleted

 

[Saint]

My previous post got deleted

Which post,Ajay?Re-ask if not too long....

All the best!
Saint

 

[nick721156]

Hi Anil,

Lots of questions.....Are you an intermediate term trader,a swing trader,a short termtrader......If so,you were out a long while ago!

If you were trading the long term charts,then you would still be holding on after taking profits,waiting to get back in.......

So far we are still in Bull Terrain,but only just....A break below the major trendline(see chart attached) and a close below that puts the Bull Market that started in 2003 in question......A break of pivots and we have a Primary Downtrend(Bear Market).

Is this the first move that is going to signify the start of a Bear Market?Maybe.Is this still a decline in an uptrend,and therefore a buyable opportunity?Maybe.

So should you be selling everything and sitting in cash.....Well,a good policy in long term trading was always to take off profits(I mean most!)from the table when a long term trend gets into an intermediate decline.And then to take off the last chunk once pivot analysis confirms a Bear Market.If trendlines don't crack,and charts signal the start of an intermediate uptrend,to go long big time.

If you don't have a clue as to what I am going on about........do take a look at the initial posts in this thread.

All the best!
Saint

Dear Saint,


When the uptrend line is broken, we say UPTREND is in qusetion. Then again, we say, "A break below the previous PIVOT LOW, we are in a confirmed DOWNTREND".

My simple question is, "Which previous PIVOT LOW do we consider - is it the last one above the uptrendline or the one formed immediately below the uprendline once the trendline is broken?".

Hope you won't mind answering my question!

Regards,

Nick

 

[SGM]

Maybe relevant to the thread

They seem to have added a couple of new laws to the list

FIRST LAW: Time conditions and affects the potency of all price movement.

SECOND LAW: Trends that run counter to the next larger timeframe tend to be abortive.

THIRD LAW: Positive trade expectation occurs when the perception of the probability of a price event diverges from the actual probability of such an event.

FOURTH LAW: Trading ranges usually terminate coincident with tests of their extremes.

FIFTH LAW: Old demand levels become new supply levels, and old supply levels become new demand levels.

SIXTH LAW: A change effort is often followed by a test of the point of change.

SEVENTH LAW: Dramatic price movements tend to unfold from price structures that minimize profitable participation.

EIGHTH LAW: The absolute value of a given price pattern is the product of the intrinsic value of that pattern modified by the context in which it occurs.

NINTH LAW: Trading ranges that follow new trend changes are likely to terminate in the direction of that new trend.

TENTH LAW: A dominating trend will generally run until the next larger timeframe can provide offsetting support or resistance.

ELEVENTH LAW: Under most circumstances, the markets will be either readable or reliable.

TWELFTH LAW: Small risk attracts large size.

FOURTEENTH LAW: Play tight in a loose market, and loose in a tight market..

FIFTEENTH LAW: Markets move violently to their place, and calmly in place.

No 13th Law, just 12, 14,15

Very relevant.....as always,great stuff!

Probably would be a good idea to break up each point and explain things further,for the newcomer........maybe tomorrow evening.

Saint

That would be a nice read even for the oldcomer

Regards
Sanjay

 

[Saint]

Dear Saint,


When the uptrend line is broken, we say UPTREND is in qusetion. Then again, we say, "A break below the previous PIVOT LOW, we are in a confirmed DOWNTREND".

My simple question is, "Which previous PIVOT LOW do we consider - is it the last one above the uptrendline or the one formed immediately below the uprendline once the trendline is broken?".

Hope you won't mind answering my question!

Regards,

Nick

Hi Nick,

Always the first pivot low that got cracked to the down.....meaning the last pivot low that got formed in the previous uptrend.Breaking that pivot low is the first time a pivot low got cracked ever since the uptrend began......That break is signal to either get out of longs or go short.

Saint

 

[Saint]

Picking and choosing the Laws........as always addressed to the beginner.

SECOND LAW: Trends that run counter to the next larger timeframe tend to be abortive.

Simple Law basically........we have all types of time frames.And all types of traders trading all types of time frames.For an intraday trader who trades the smaller time frames,keeping an eye on the 30,60min is vital.Why?Simply because of the above law.A trend that runs counter to the next larger time frame tend to be abortive......Important word:Next.Presuming you are trading the 5min charts,who cares for the weekly,or for that matter the daily.......Don't bother!Focus on the biggies in the intradays like the 30,60min.Presuming you are a trader who trades the daily charts,then the weekly assumes importance.

Therefore,simply put,if you have a 60min trend that is in a downtrend,and as always,a downtrend is noticed by its lower pivot highs and lows,.......and you are looking to go long on the 15min chart as it gives you a buy signal,remember the above Law!It can get aborted and then the downtrend can resume..........That does not mean you cannot trade long on the 15min charts in a 60min dntrend,if you are fast and not taking a whole 5mins to come to decisions,go ahead,trade long,but remember that this is after all a 15min uptrend within a 60min dntrend,and it can abort anytime!So make your quick buck ...and run!Do NOT buy and then hold it with the hope it 's going to the skies!

On the other hand,if you'd rather stay out........you are not wrong either.In the long run,you could be more right than the former(once again,no abolutes,the word could is important).Here,you look to short the 15min charts in a 60min dntrend,and then when the 15min goes into an uptrend,you stay out.....And then short the pivot break again,until the 60min breaks pivots to the high.Then,it's go long,stay out,go long,stay out till 60min pivots break again to the down.

Very important Law to remember.......

Happy Trading!
Saint

 

[Saint]

NINTH LAW: Trading ranges that follow new trend changes are likely to terminate in the direction of that new trend.

We have gone through this one before.........We get a new trend,let's say an uptrend,followed by a sideways move,a trading range .......expect it to end in a breakout and continuation of the prior uptrend.

Also remember this.....There is nothing Absolute in Trading......If a trading range does not breakout,then most traders expecting the Law above to work are in for a rude shock.

Either way,trading ranges are sweet........most probably they are going to breakout.Profit from it.If they don't,and they breakdown,Profit from it.If they do,and then fall........you'd be long,stopped,and then short.Profit from it.

Happy Trading!
Saint

 

[Saint]

TENTH LAW: A dominating trend will generally run until the next larger timeframe can provide offsetting support or resistance.

Presuming we are trading the 15min charts again,taking the previous example,higher pivot lows,higher pivot highs.Strong Uptrend.Taking out many resistance levels as Price forces its way upwards.

And then we notice that the 60min comes into an area of supply and starts to stall,this time it does not blast through the resistance,it stalls.At the end of that hour,that 60min bar closes at that area of resistance or below it.Expect the next bar to go down in the 60min charts.

It's our cue to take some off the table.....a 60min correction is nothing but a 15min downtrend.Don't let your mind wander off into thoughts like "Anyway,we are in a 60min uptrend,why can't we just wait out the correction?"We are trading the 15,not the 60.......we have the 60 stopping at resistance.Take off some,and then all once pivots crack.

Never fight the larger time frame.....if it gives indication that a move is over,it has come to its resistance,it's tired,it's going to correct......forget fighting it.Run!!

Not too sure if got way out of point......babbling away at 2:30am has its disadvantages!

Happy Trading!
Saint

 

[rangarajan]

As usual,VG stuff.I could now visualize clearly, where i go wrong in day trading.The disadvantage for me is that i rely on NSE site graph (LINE) & deprived of BAR chart to know exactly the pivot high/low in a given time frame.

Tell me one thing Saint,if trading is mathematics most of the time ,say 80% & mechanical with modern tools,why then DAY traders fail often & that too majority of them.Also,why many a seasoned players discourage DAY trading except a few starvelts like Credit Violet,a vociferous supporter of Day trading,