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

[Terahertz]

Hi Satish,

Great going on your understanding on the basics........as you go along,you will realise that unlike in school,these basics are enough to give you sweet profits.

But learn the patterns as well.......learn them because everyone else is looking at them,and to know the strengths and weaknesses of your rivals is going to be important for you.

Now let us say that you do not want to have anything to do with patterns.......no problems with that as well.Example,we have a pullback that is overdone and comes to support and then rallies off to the same previous high and then back to the same level of support.The conventional tech analyst calls it a Double Top,but you are least concerned.You instead draw your resistance and support lines........and wait.A breakout over resistance and you will be in it LONG,a breakdown below support and you will be looking to SHORT.

So,are you really bothered about a Double Top or Bottom?Not required if you are a trend trader.

Another chart pattern,we have a huge move up on high volumes and then a pullback to an area of support,and then a rally on decreasing volumes to a new high,and then back to the support area,and another rally of lesser vols and then back to that area of support again.

What would you do?You would draw your lines of support,a breakdown from there,and you are in SHORT.Do you need to know that this was actually a HEAD AND SHOULDERS pattern?Obviously not.You,being a trend trader,if you were in long would have been unhappy that new highs were coming in decreasing vols and then the 2nd pullback to support would have already put the entire uptrend in question,and will be looking to exit......So therefore,can you as a trend trader manage to make huge profits in the markets,without knowing abt the Head and Shoulders pattern?Surely.........Just drawing trendlines,Supports and Resistances would do the trick.

That is as far as ReversalPatterns go.........but you may need to know something abt the continuation patterns though.Why?It gives you an idea that the trend that you are in so far is doing great........You got a nice move up,and then sideways pattern.If you didn't know that it was an ascending triangle in progress,you could still draw a resistance line and buy the breakout.But knowing that an ascending triangle USUALLY is a continuation pattern before a strong move up,gives one the courage to hold on to that trade.

In summary,is learning chart patterns vital for the survival of a trend trader?No,not at all.........can come in useful,but not vital.........if you feel you can manage without it in your style of trading,by all means do so.No compromises on the Basics we learnt in the beginning.But on Chart Patterns,your call.Skip it if you don't need it.

All the best!
Saint

thanx saint , very beautifully explained.

 

[rahulg77]

Hi Saint,

Just want to recap something we ahve learnt so far. We see charts on the weekly we see a uptrend...a higher pivot high and low and we can enter other indicators also permiting or we may just follow the trend.

Now what happens if we see a chart which is in uptrend and in which the chart keeps going up. Is there any method to enter or we wait for a pull back. I was seeing the charts of Seamrin. 526807. On the weekly its on a uptrend but the entire week on the daily it was on uppercircuit. Now it may do that on the 2nd week too.

So we wont enter now. We will wait for a pull back preferably to 135 levels where it made a window and also started moving up from a sideways trend.

Now another part would be if after moving up for another week it again moves sideways and then moves up. Would u buy or leave this counter if no pull back.

Rgds
Rahul

P.S I am not into this counter. Just studing it for my knowledge.

 

[Saint]

Hi Saint,

Just want to recap something we ahve learnt so far. We see charts on the weekly we see a uptrend...a higher pivot high and low and we can enter other indicators also permiting or we may just follow the trend.

Now what happens if we see a chart which is in uptrend and in which the chart keeps going up. Is there any method to enter or we wait for a pull back. I was seeing the charts of Seamrin. 526807. On the weekly its on a uptrend but the entire week on the daily it was on uppercircuit. Now it may do that on the 2nd week too.

So we wont enter now. We will wait for a pull back preferably to 135 levels where it made a window and also started moving up from a sideways trend.

Now another part would be if after moving up for another week it again moves sideways and then moves up. Would u buy or leave this counter if no pull back.

Rgds
Rahul

P.S I am not into this counter. Just studing it for my knowledge.

As always,great question,Rahul........

SEA MARINE -We got a breakout on the daily charts on the 21st of April.Textbook entry,wait for a pullback or buy over the previous day's high.In this case ,buy on the 24th of April over the previous day's high.What I would have done:I would have bought over the previous day's high(half) and would have liked to add the other half in a pullback.In this case the pullback never happened,and I suppose I would be sitting with half a position.

And as for the second question,if this pulls back on the daily charts,it's a buying opportunity.If it goes sideways,it is a buying opportunity.Of course if it makes a mild pullback on the weekly,it's a buying opportunity.

Happy Trading!
Saint

 

[roneeth]

Hello Saint,

How are you? Had a query on Cochin Refinery,Making HIgher highs and Lows ,MACD crossed the signal line, Volume is picking up too... Could you please suggest where can one enter this one.

Its always been a Great Pleasure to read your posts

Thanks and Regards

Roneeth

 

[pkjha30]

Hello Saint,

How are you? Had a query on Cochin Refinery,Making HIgher highs and Lows ,MACD crossed the signal line, Volume is picking up too... Could you please suggest where can one enter this one.

Its always been a Great Pleasure to read your posts

Thanks and Regards

Roneeth

hi roneeth

You learn here to fish. Don't start catching it here.The appropriate place would be another thread called "The New Intermediate Uptrend....." by saint if you are particular.

Let this be a learning thread only.

Regards
pankaj

 

[roneeth]

hi roneeth

You learn here to fish. Don't start catching it here.The appropriate place would be another thread called "The New Intermediate Uptrend....." by saint if you are particular.

Let this be a learning thread only.

Regards
pankaj

Hey Pankaj,

Did I sound like I wanted to enter the stock; instead of actually wanting Saint to reconfirm the fishing lessons that I have learned so far. Then I have miscommunicated.

Now I would appreciate a response if I am on the right LEARNING TRACK.

Thanks and Regards,

Roneeth

 

[pkjha30]

Hey Pankaj,

Did I sound like I wanted to enter the stock; instead of actually wanting Saint to reconfirm the fishing lessons that I have learned so far. Then I have miscommunicated.

Now I would appreciate a response if I am on the right LEARNING TRACK.

Thanks and Regards,

Roneeth

Hi Roneeth

You are an exceptional student to a brilliant teacher. No doubt about it.I was misled by your sentence about entering it. That could very well be an academic question.Perhaps you could have given your reasoning and chart for entering it or otherwise.Another thing is to test if you learnt a lesson is to take plunge in the LAB you know what I am alluding to. I Don't want to sound like a policeman and my intention was to remind of its academic purity.

I am sure Saint would be pleased to answer your question.

 

[rahulg77]

Dear Saint,

How are you? pls tell me something to draw trendlines at times we see a tick the price action is or real body is very small but the fluctuation is very large. so we draw the trendline near the opening closing or at the bottom of the tick. I was seeing riddhi siddhi. The price opened close above 230 but the tick is till 210. so where should the trend line be for such fluctuaions.

Rgds

Rahul

 

[sanefellow_213]

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

 

[Saint]

Dear Saint,

How are you? pls tell me something to draw trendlines at times we see a tick the price action is or real body is very small but the fluctuation is very large. so we draw the trendline near the opening closing or at the bottom of the tick. I was seeing riddhi siddhi. The price opened close above 230 but the tick is till 210. so where should the trend line be for such fluctuaions.

Rgds

Rahul

Sorry for all these delays in answering........Yes,Rahul,connect two or more lows,then extend that line,you will notice many times the price trying to break through the trendline but forming a tail and still having its body within that trendline.

Go with the eye.........

Saint