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

[Saint]

hello.. saint

As a beginner i'm a great admirer of your thread n your efforts to share the knowledge of wealth with other.. as with the likes of many i also have a few questions.. hope u wont mind clearing them out.. for me and others who r new to this field..

I have been using some of the indicators.. as you have mentioned but one thing comes worth noting is that if we are trading daily charts then.. we have to keep a trac of what's the stock doing on the weekly charts(the higher time frame model) and suppose the daily chart is in uptrend(in respect to higher peaks and troughs).. and then crosses below.. its recent pivot low.. and makes a lower pivot high.. it can be said the stock has turned its trend(on the daily time frame).. now at the same time.. the weekly indicator.. does not show the same weekness.. coz any change in trend.. will first b visible on daily charts.. as in this case n then on weekly charts.. now my question is how can we distinguish whether it is just a temperory pulldown.. on weekly charts or start of a trend reversal on a weekly chart..(from bullish to brearish).. as the first signs of weakness can only b visible on the smaller time frame then go on to the bigger ones..and is there any way we can find out that this.. reversal on smaller time frame is indeed a trend reversal on the bigger one.. hope i'm not bothering you.. saint..

Thanking.. you,

Sanefellow_213

Hi Sanefellow,

Great question......once again,apologies for the delay in answering your question.

As for an answer to your question,simply,we don't........we really cannot say for sure that this correction is going to be that one that will see a correction in the weekly charts as well.

But we have some ways to anticipate it.........few reasons to get nervous on the NIFTY over the last few weeks.We have a way overbought Stochastics ,the last time we saw Oversold was in October last year.We have a negative divergence on the TRIX and the RSI.We know that an important correction is coming,but as trend followers should,we do NOT predict a move.......opening the weekly charts,we have a way overbought Stochs and negative divergence on the RSI.Again,we know that a correction is in the offing,but we ride the trend till we see a break in it.So far,no break,we are fine.......

Now,we get this important break and a finish at the end of the day (monday)below our all important trendline.This intermediate uptrend that we have been playing from October till now is over.Nothing to do with long time frames,they are still very bullish.

As far as we are concerned,we are out of all longs,and now look to short every rally till once again things change to the up.The rally yesterday means nothing,except some intraday gains,and then today another big fall of 826pts.Looking at the weekly charts,nothing but a pullback.....but trendlines and a few indicators and a topping tail on the weekly gets the intermediate frame trader to get out early.

And as trend followers,we are not concerned to get out at an absolute top or bottom.We just want to get as much meat as possible in the middle.

Basically,important to integrate both the time frames.........it will all come as you pour over thousands of charts.

All the best!
Saint

 

[rahulg77]

Hi saint,

How are u? another question regarding the trend line. like all books say the trendline helps being a support and thats what we see on many charts also. I was seeing the charts of JP associates and that is true there too.

Now my question is

- Why? is there a reason a trend line acts as a support( what is the underlying logic behind it) or cause we see it in so many charts we take the number of repitations as a proof and follow it.

- Another thing i noticed was that the price was always bouncing back on intermediate trend line( acting as support) and the short trend line went above the price pattern and number of time acted as the resistance level. Is this also common to see.

Rgds

Rahul

 

[Terahertz]

Hello Saint,
How are you. This great crash has triggered all my stop losses and i am out of most of my stocks and i am now sitting on cash. Feeling great that i have had minimal losses.
I have some questions. Hope you will answer them
1) Is it necessary that any breakout above or below a trendline should be accompanied with good volumes.
I am looking into charts of various companies but i am unable to find any charts which show an uptrend. But today i found one "Sanghvi Movers".
this stock has broken its uptrendline and is again trying to reenter the uptrendline. Please see the chart. If this stock rises above the trendline, should this be accompanied by heavy volumes. What if it doesnt??Should that be regarded as a false breakout. Is there any way by which i can tell whether a breakout is false or not.

 

[[email protected]]

dear saint
greetings
after a long time i was serious enough to read postings on this forum. my beginning is with this posting "teach a man to fish...." and while reading it i absorbed myself so much that i forgot to attend an important function and had to bear the ire of my host.
i had seen many other forums where the members are given reccommendations about certain stocks by the administrators/moderators etc. and where questioning them is tabboo. they have to remain dependent on others. but this is the only forum where they are taught to cope with the intricacies of the stock markets and are groomed/motivated to stand on their own feet.
i am a naive trader/invester and do not participate much in the stock markets for want of knowledge. but know i am confident of learning the tricks of the trade by remaining in touch with the topics here. so saint thanks for opening my eyes to all thenew world(for me) of the stock markets.
wit regards.

 

[Saint]

Hello Saint,
How are you. This great crash has triggered all my stop losses and i am out of most of my stocks and i am now sitting on cash. Feeling great that i have had minimal losses.

Great going,my friend.Same boat as you.That is the whole idea of trend trading..........when trends reverse,we get stopped out,and then we wait for the next uptrend to emerge(unless you have the skills to exploit the dntrend as well.)

I have some questions. Hope you will answer them
1) Is it necessary that any breakout above or below a trendline should be accompanied with good volumes.
I am looking into charts of various companies but i am unable to find any charts which show an uptrend. But today i found one "Sanghvi Movers".
this stock has broken its uptrendline and is again trying to reenter the uptrendline. Please see the chart. If this stock rises above the trendline, should this be accompanied by heavy volumes. What if it doesnt??Should that be regarded as a false breakout. Is there any way by which i can tell whether a breakout is false or not.

Yes,a breakout needs high volumes to sustain it,else as you correctly pointed out,it will end up as a false b/o.But a breakdown can happen without good volumes as markets fall with their own weights.

SANGHVI MOVERS :Not really a good example to study on due to its very low volumes.But in general,yes,that trendline(up) once cracked,that very trendline that was previously support now becomes resistance.And like all resistance we need the breakout over resistance accompanied by good vols.

Saint

 

[Saint]

Hi Friends,

I have not had time to concentrate on this thread due to a variety of reasons,and my deepest apologies to the sincere earnest student who had wanted to learn and feel let down.......once again,my sincere apologies.

As we had discussed,we have realised the great importance of the very basics.To assess the trend is sometimes easier than it looks,and to act on it more difficult than it seems.But dealing with the mind is another different topic in itself and we shall come to it in due time.

We have so far done trends,pivots,trendlines,supports and resistances among others,and a few important patterns..........Due to the variety of time constraints,please go to http://www.stockcharts.com/education/ChartAnalysis/chartPatternsNode.html

To be a trader pulling profits from the markets on a regular basis,one has to keep things simple.......I believe the above website puts it down to its simplest.Very easily understood,and as far as patterns are concerned,all that is required.There are some amongst us,from an older school of thought, who would still like to hold a book in our hands as we pour through the facts.Probably then you may have to go hunting for the book........Else these facts are enough.

After reading,we can always discuss charts and the doubts before proceeding to other things.....

Happy Trading!
Saint

 

[Saint]

Hi saint,

How are u? another question regarding the trend line. like all books say the trendline helps being a support and thats what we see on many charts also. I was seeing the charts of JP associates and that is true there too.

Now my question is

- Why? is there a reason a trend line acts as a support( what is the underlying logic behind it) or cause we see it in so many charts we take the number of repitations as a proof and follow it.

- Another thing i noticed was that the price was always bouncing back on intermediate trend line( acting as support) and the short trend line went above the price pattern and number of time acted as the resistance level. Is this also common to see.

Rgds

Rahul

Hi Rahul,

My mind does not work in the "why something happens" mode,and therefore I may not be the best to answer it........but I wonder if these patterns and lines develop because we are all looking at the same thing and drawing the same lines

It could be as simple as fear and greed.Countries may be different,the year may be different,but human emotions don't change much,I guess.And it gets reflected on our charts.

A chart is never the mapping of what that particular company is about,but of the emotions of hope and expectations ,fear and greed,of the investors in that company.The chart tells us of human emotions,and therefore,as astute traders,we buy into fear and sell into greed,and enjoy the profits made in the difference.

And therefore trendlines,patterns and all the paraphrenalia is learnt to come to that very important point.......to assess when fear has truly set in,and is time to buy once we get a signal,or when greed has got a bit out of whack,and is probably time to exit.

And ,Yes,to the second doubt,my friend....


All the best!
Saint

 

[Saint]

dear saint
greetings
after a long time i was serious enough to read postings on this forum. my beginning is with this posting "teach a man to fish...." and while reading it i absorbed myself so much that i forgot to attend an important function and had to bear the ire of my host.
i had seen many other forums where the members are given reccommendations about certain stocks by the administrators/moderators etc. and where questioning them is tabboo. they have to remain dependent on others. but this is the only forum where they are taught to cope with the intricacies of the stock markets and are groomed/motivated to stand on their own feet.
i am a naive trader/invester and do not participate much in the stock markets for want of knowledge. but know i am confident of learning the tricks of the trade by remaining in touch with the topics here. so saint thanks for opening my eyes to all thenew world(for me) of the stock markets.
wit regards.

Hi Spark,

First of all,thank you for those very warm remarks....

Secondly,great attitude,my friend...........It is great to hear that one doesn't take part in the markets theses days for want of knowledge.With the markets going in a vertical direction,every friend and relative had seemingly turned into professional analysts and traders.What with tips and calls flying about right,left and centre,it is indeed wonderful to know of one such as yourself who did not take part for the want of knowledge.You may not realize it right now,but that was an important STEP 1 in the right direction.

And as for the other point,there are instituitions(I refrain from naming them here),not just in the business of the stock market,but in other avenues as well,that thrive on the ignorance of the common man.To tell you the tricks of the trade is robbing them of their importance and their ability to make money off you.The strangest thing is that these very analysts,be they through their websites,or newsletters,giving trades on a daily basis,advising you on this company or that,......do not trade!!!Their money is made off you,and not from the markets,and that is what makes the whole thing nauseous and revolting.

It is not just in this thread but in many other threads in the Traderji forum,that you will find great traders,making their living out of the markets,or having a regular job and adding to their income by trading the markets.......if you are not confident of stock trading,educate yourself on all the nuances of investing.If you are not into direct involvement in the markets,and are more interested in the Mutual Fund Industry,then again,you take that informed decision.Same for any other form of invstments.For that a certain basic education in that field is a must.

I sincerely hope that this forum would be a start to your Education,and let not the high priests of trading stand between you and Education..........always remember that there is more money to be made from the markets.May not be as easy money as the "other way",but believe me it is much,much more rewarding.

Wishing you all the very best in all endeavours,be it in the markets or in Life.

Saint

 

[rangarajan]

Dear saint,
Suddenly you seem to be very philosophical in your replies & also seem to be in a hurry to close the thread.Well,you may have yourown valid reasons.
But,be rest assured that lot of forum members including myself,got benifited from "teach a man to fish" & thank you.
Do come back whenever you find time.
With best wishes,
ranga

 

[Saint]

Dear saint,
Suddenly you seem to be very philosophical in your replies & also seem to be in a hurry to close the thread.Well,you may have yourown valid reasons.
But,be rest assured that lot of forum members including myself,got benifited from "teach a man to fish" & thank you.
Do come back whenever you find time.
With best wishes,
ranga

Hi Rangarajan,

Nope,no intent at all to shut the thread,just hoping that those interested can go through the webpage above for the basics,and then we can discuss together using real charts.

Other than that,basically philosophical in approach to anything and in interest,......so that might show now and then.

Best wishes,my friend...

Saint