Traderji and Seniors pls guide-colgate

[rahulg77]

Rahul,

with the knowledge is acquired as now, i will try to clear ur doubts as much as i can.

1. MACD isnt moving down in the chart, the divergence happens only when there is a drastic downward turn of MACD, like going from up to down. Still the MACD is in positive territory.
If you notice, in Colgate for most of the times MACD is in +ive territory.

2.Relative Strength Index (RSI) is basically and oscillator and fluctuates between say 80-20 levels (need not be always). so, wheever RSI goes above 70 or nearing 80 indicates overbought and below 40 or 30 oversold.
its gives the strength of the current trend and can be used to either enter long or short positions.

3. Till now didnot heard about drawing Trend Lines to RSI. But, as i know, generally we draw trend lines to the stock price.

coming to exaplainig the importance of MACD and RSI and their usages, it will take long time to write them. you can visit www.investopedia.com to get a good insight of them.

Satya

HI satya,

I went to the site you gave me. Thank you it has nice explanations there. I would like to share something which i read over there.

Using the moving averages, trendlines, divergence, support and resistance lines along with the RSI chart can be very useful. Rising bottoms on the RSI chart can produce the same positive trend results as they would on the stock chart. Should the general trend of the stock price tangent from the RSI, it might spark a warning that the stock is either over- or underbought. So we might be able to draw trendlines on it too. But how useful it will be i am not sure.

Hope other members can throw light on it

Rgds
Rahul

 

[rahulg77]

Another thing Satya pls do not take my post as a challenge. I am very new to TA and i am just probing issues to be very clear on every aspect of it. Its a huge ocean and i have not even had a drop of it yet

Kind Regards
Rahul

 

[AJAY]

Dear Satya,

TrendLines can be drawn on RSI and even chart patterns like H&S, Wedges etc. (which are not visible on price chart) on RSI are also very much valid and helpful in finding out the moves well in advance.
As the time is not permitting not able to attach any chart to give an example. Nexttime I'll do it.

Thanks and Happy Learning
AJAY

 

[srisara]

Saint, Karthik, Rahul, Raj, Ajay and all others,

thanks for your encouragement. As said, I am also still student and it will also give me great insight if i can learn drawing trendlines in RSI.

note: Rahul, there is a saying in TA called as KISS (Keep It Simple Stupid). Not to offend anyone, but the more simple you keep the more your mind will be clear

I am a great fan of Alexander Elder, he says "An Ameteur in his endevour to conquer market, will jump from 1 indicator to another and end up using 100's of indicators".
Professionals, in another way select very few indicators (say 5) and master them. That is they apply them to their charts and succeed.

So, I am trying to keep things as simple as i can and to make decent profits those 5 indicators are more than useful.

There is one thing, if you feel to worried about a scrip, close it and sit a side. Market never punishes who sit a side, but punishes who makes mistakes.

Regarding challenges you said, I take everything in a positive way. Since, I know all that will help me to learn.

So, dont stop questioning me...

Satya.

 

[alok]

Very nicely explained Satya...

 

[AJAY]

Satya,
I really appreciate your yearning to learn and apply TA. And also I personally wish you all the very best.

Satya, Firstly I request you not put my name along with the names of Giants like Saint, Karthik, Amitji etc. I've to go a longway to reach them.

Secondly, I personally feel that everyone here is a learner. Everybody is always a student.

And last but not the least is your KISS Policy. Really I appreciate it.
Satya, here I'd like to share some of my experiences. I don't know whether I can post them in this thread. As the context has come, I am putting them here.

At the time when I started learning technicals, I satrted with MetaStock and it was a DOS version in those days. Later I started experimenting with most of the TA software available, trying to catch the holy grail. You name it and I say I tried it. That was the coverage I made onto these packages, programmes available. From conventional TA to the Neural Networks and to the Delta to the Gann and even to the application of Astrology in TA. And finally I could catch the HoliGrail. Yes Satya, I have it with me and it is nothing but keeping a principle to trade, to manage the moneys. As you mentioned keeping it simple always keeps a holygrail in our hands. Here HoliGrail, I mean, not the successful trade count, but the successful money management.

And Satya, in this process I made it furthet simple by myself by even not looking into the indicator part, most of the times. I suggest you to look into the Bars or Candles whatever you like along with the volumes at sensitive points of the chart and they themselves will give a big clue about what is going to happen. Pl. try to see what is happening behind the Asset through the chart. Chart is the window through which we can see the whole happenings that are taking place in that particular asset. This insight can be developed very easily, one you start looking at chart as a window. And definitely I can say you can see through it.

All the very best
AJAY

 

[AMITBE]

Satya, Firstly I request you not put my name along with the names of Giants like Saint, Karthik, Amitji etc. I've to go a longway to reach them.....

Secondly, I personally feel that everyone here is a learner. Everybody is always a student.

And Satya, in this process I made it furthet simple by myself by even not looking into the indicator part, most of the times. I suggest you to look into the Bars or Candles whatever you like along with the volumes at sensitive points of the chart and they themselves will give a big clue about what is going to happen. Pl. try to see what is happening behind the Asset through the chart. Chart is the window through which we can see the whole happenings that are taking place in that particular asset. This insight can be developed very easily, one you start looking at chart as a window. And definitely I can say you can see through it.

All the very best
AJAY

Hey Ajay...very well written.
Yes everybody is a learner, and there are no giants here, whether Karthik, Saint or myself, as mentioned by you. We are all shoulder to shoulder and equals, as students are equals.

I too agree with you on what you've said on indictaros and the price/volume chart.
But this is the first time I've come across the analogy of a window for the price chart, and that just about sums up the truth behind your statement so nicely. Very well explained.
I also agree that bars aside, the Japanese candlesticks are a world of information by themselves. Even if ancient, it's about the most evolved system one could find.
Thanks for the nice post, Ajay.

And great going Satya!

 

[srisara]

Ajay and Amit,

Thanks for sharing your insights. Yes, I believe everyone goes through this learning curve of experimenting with lots of indicators.

I am slowly loosing intrest in learning all those fancy indicators and myself got adjusted to read a max of 2-3 basic indicators along with Price and Volume.

As Ajay said, its the Money Management Skills, which keep you float in the market.

I am just fine tuning my MM Skills and also if you make of sure of good entry and exit points, then u r in the GAME...............!

Cheers!
Satya

 

[Saint]

Satya, Firstly I request you not put my name along with the names of Giants like Saint, Karthik, Amitji etc. I've to go a longway to reach them.

No giant,Ajay,maybe slightly overweight thanks to a sedentary lifestyle,but yet to qualify as giant yet.

Saint