Technical Analysis - Back to the Basics....

[tusharmdave]

Technical Analysis - a very basic study of the charts and few moving averages, including mainly supports and resistances, not novice but a person with good hands on to the charts and indicators, can make profitable trades in short term period.

This thread is started with the aim to let the people join and make good profits with the very basic study of Technical Analysis.

What should be the best trading strategy and how to make sure shot profits in the equity market?

There are mainly 3 ways a retail investor or trader can earn through stock market.
1. Intraday Trading,
2. Positional Trading
3. Medium to Long term Investing

The segments may be
1. Equity Cash
2. Equity Futures
3. Equity options
4. Index Futures
5. Index Options

Stock market trading can further be classified in various parts. For example, BTST, STBT, Arbitrage, Hedging, Naked trades(mainly in options), Sell only strategy, Algo trading and lot more.

All these words or terminology creates lots of confusions and fear in the average traders mind. The one who had good knowledge can easily handle the stress or pressure with stock market day to day activities. But the one who does not have any such knowledge and who also either don't have time to study all these things or not willing to do so, and still wants to make money from the markets, are the most vulnerable to the risk of ending up in the losses.

I am not aiming to create the fear in any one's mind, but here, the aim is to make each and every trader aware of the basics of technical analysis and let people start earning from the stock markets.

May I be not 100% right or accurate every time as the analysis of any financial instrument, but the efforts shall be in the direction of making profits most of the time and also curtail loss as much as possible.

 

[tusharmdave]

Thanks to the friends endorsing me here. This is just beginning of mine here after joining before 3 years.

As the purpose itself depicts about my intentions of earning with clear and sound mind trading. A trader can only earn in this market following strict trading discipline. Discipline includes the decision of
1. Entry in the trade,
2. Making appropriate amount of investment. (Avoid under-trading or over-trading),
3. Following the decision of Target ad Stop Loss in all circumstances.
4. Take the profits as decided or trail the stock for maximum possible profits. In this case, Exit decision is equally important.

Here, i would like to share one experience with the stock of Maruti this year. Maruti, the automobile giant in India, was in downtrend since November 2015 after hitting high of 4790 on 23-11-2015. After that, it was in continuous downfall and the downfall continue till the end of February 2016.

On 29th February, the Budget Day, Maruti hit the low of 3193.25 and from there, it bounce back to 3236.5 on closing same day. Nifty also hit the low of 6825.80 and bounced back to close on 6987.05 same day. This was literally the end of the downtrend for Nifty as it clearly posted a red Hammer at the bottom, not only that, Nifty created almost near to the double bottom with equal to the bottom of 12th February 2016 which was also a red hammer and again at the bottom. It was clearly decided on the day of Union Budget - 29th February 2016 and we clearly gave Buy indication for Nifty index before closing of trading on the day of Budget. Though Maruti did not gave any indication of reversal on that day.

But the next day, Nifty open with good gap on upside and Maruti starts the trading with open equals to low (3200.9 on daily candle), the indication was clear that Maruti will give green candle for the day, it was 1st March 2016. Though, it was not clear in the beginning of trading session that this will be the reversal in Maruti on upside. We ignored Maruti on that day because we were watching the movement of Nifty, which was more important.

By the end of the trading session of 1st March 2016, between 3:00 and 3:30, I saw Maruti chart, as it was one of the Top Gainers of the day. The candle was whooping 10% green candle, overshadowing the previous day's big red candle. The volume was not more than that of previous day, but it doesn't effect more and the trend reversal was almost confirmed. This can be said so confidently because the chart indicated one of the most effective bullish candle stick pattern of engulfing formed on the daily charts, but simultaneously it also recorded the breaking of the resistance line created joining the tops of the downtrend started in November 2015.

It was a classic case of trend reversal for the automobile giant stock. It closed at 3494.4 on 1st of March and opened gap up at 3542.05 on 2nd March 2016 confirming the trend change in upward direction. in the course of beginning of uptrend, the stock hits low of 3418.50 on 8th April, higher low then the previous low 3193.25 on Budget day. The trend reversal was further confirmed on 11th April when it closed above the high of previous day.

The purpose of this whole story is to create confidence of traders that pure technical analysis is the only way to make profitable trades in the stock market. Market is full of opportunities and almost everyday we can get enough of them to make profitable trades. The only thing is to keep on studying and watching the news and movements of stocks in the market.

Happy Trading...Trend is Friend...
goo.gl/WFXXoh

Tushar Dave

 

[tusharmdave]

Since some time unable to post updates here. Will try to come back soon with some more stuff...

 

[monkeybusiness]

Use image hosting site to upload charts.
Please check timepass signature bellow:

http://www.traderji.com/equities/47979-canteen-741.html#post591768

 

[tusharmdave]

Technical Analysis - a very basic study of the charts and few moving averages, including mainly supports and resistances, not novice but a person with good hands on to the charts and indicators, can make profitable trades in short term period.

This thread is started with the aim to let the people join and make good profits with the very basic study of Technical Analysis.

What should be the best trading strategy and how to make sure shot profits in the equity market?

There are mainly 3 ways a retail investor or trader can earn through stock market.
1. Intraday Trading,
2. Positional Trading
3. Medium to Long term Investing

The segments may be
1. Equity Cash
2. Equity Futures
3. Equity options
4. Index Futures
5. Index Options

Stock market trading can further be classified in various parts. For example, BTST, STBT, Arbitrage, Hedging, Naked trades(mainly in options), Sell only strategy, Algo trading and lot more.

All these words or terminology creates lots of confusions and fear in the average traders mind. The one who had good knowledge can easily handle the stress or pressure with stock market day to day activities. But the one who does not have any such knowledge and who also either don't have time to study all these things or not willing to do so, and still wants to make money from the markets, are the most vulnerable to the risk of ending up in the losses.

I am not aiming to create the fear in any one's mind, but here, the aim is to make each and every trader aware of the basics of technical analysis and let people start earning from the stock markets.

May I be not 100% right or accurate every time as the analysis of any financial instrument, but the efforts shall be in the direction of making profits most of the time and also curtail loss as much as possible.

:clap::clap::clap::clap::clap::clap::clap::clap::clap::clap:

 

[tusharmdave]

Maruti after hitting high of 4162 on 27 May 2016, entered in side ways for time being, and preparing to start a fresh rally in near future. As Nifty is also in the sideways, it will give upward move in a short time, accordingly Maruti will also start a fresh rally as the stock usually tends to follow or to stay along with Nifty movement.

Let's watch for fresh bull run...

Happy Trading...Trend is Friend...

Tushar Dave