Trading the trend

[VIKAS 21]

Dear VIKAS,
Major trend can also seen on Daily and Weekly charts and Intermediate trend can also seen on daily chart....... in my view Daily and Weekly charts are enough for a trader for all three types of trends( Major,Intermediate,Short term )... no need for Monthly charts for trader like us...... but yes for very long term investors.... Monthly charts can be useful...

Dear HEM Sir

MAjor trend can be seen on daily time frame & even on lower time frames.....

But how will we tell what the trend is ???

If a stock is in uptrend from last three years.. how will you tell its trend by watching daily time frame....It will have completed lots of uptrends & downtrends in this three years of time....

This is also true for intermediate trend too...

A stoCK which is in uptrend showing small pullback on weekly chart has completed full cycles of uptrends & downtrends in daily charts...

This also according to what ST SIR has said " SMALLER TREND WITHIN LARGER TREND".

 

[VIKAS 21]

PIVOT:

A price-bar formation that gives real-time price signals of support and resistance. When a series of price bars reverses direction, it is considered a structural pivot (not a calculated pivot).

The price bar has an open, high, low and close. The pivot is composed of a minimum of three bars and occurs in every time frame. The pivot lows and highs are used to draw trendlines to show support, resistance and trend direction.



Investopedia Says:
Think of the price pivot as an axis, which is a shaft that supports something that turns. Every pivot is a price turn and shows support (a pivot low) or resistance (a pivot high) for that time frame.

As per oxford dictionary:
the central point, pin, or shaft on which a mechanism turns or oscillates.

PHIVOT HIGH: A POINT WHERE PRICE FEELS SOME RESISTANCE

PL: PIVOT LOW: A POINT WHERE PRICE FEELS SOME SUPPORT

Types of Pivots:

1. Major pivots

2. Small pivots

3.Clear pivots

4.Sideways pivots

5. Paused pivots

Will be discussing about them in coming posts...

 

[HEM]

Dear HEM Sir

MAjor trend can be seen on daily time frame & even on lower time frames.....

But how will we tell what the trend is ???

If a stock is in uptrend from last three years.. how will you tell its trend by watching daily time frame....It will have completed lots of uptrends & downtrends in this three years of time....

This is also true for intermediate trend too...

A stoCK which is in uptrend showing small pullback on weekly chart has completed full cycles of uptrends & downtrends in daily charts...

This also according to what ST SIR has said " SMALLER TREND WITHIN LARGER TREND".

Dear VIKAS,
i am very non conventional type trader...... and i am just presenting my own view.... ...whenever i will have time..... i will give you detailed reply..... but now day's i very lazy for giving in detailed reply....

You are doing great job....My best wishes to you and your hard work..... God bless you my friend..

 

[VIKAS 21]

Small Pivot – Meeting point of Rally and Decline
Clear Pivot – Meeting point of small UT and small DT
Major Pivot – Meeting point of Clear UT and Clear DT
Paused Pivot – Temporary pause in Rally/Decline

A1,A2...... Small pivots high(SPH)

B1,B2......small pivots low(SPL)

Red circles- Clear pivot lows(CPL)

Green rectangles-Clear pivot Highs(CPH)

Big blue rectangle- major pivot high (MPL)

Two cases shown here....

1. uptrend: first time price not able to broke the low of the previous bar which made PH, hence only PH, next case it broke the low, Hence marked it as SPH(small pivot high).

2. Downtrend: first time price not able to broke the high of the previous bar which made PL, hence only Pl, next case it broke the high, Hence marked it as SPL(small pivot low).


similarly is the case of CPH ( CLEAR PIVOT HIGH): Look in first chart when price broke the low of previous Spl then it will be termed as CPH otherwise SPH, reverse for CPL..

Similarly for MPH(MAJOR PIVOT HIGH): If it brokes the low of previous CPL then it will be termed as MPH otherwise CPH.

 

[Smart_trade]

Acc. to you at what point should I buy ?

Let's say I short at point E as that's a downtrend....now i wait for the trend to change the direction so that I can buy as per your threory(wat i hv understand so far).
I buy at some point in b/w F and G. But, that leaves me with a very little profit and that is even when trends are long and clear.


If seeing the downtrend from G to H, I short sell at some point then I may need to bought at higher level due to change in trend.

It's easy to say buy/sell acc. to the trend but hard to work on it......

Vikas or any other senior member...please share your view on this....

Answer to how to trade this chart and where to buy depends on whether one is a short term trader or a long term trader. Both will trade this chart differently. Let us see how they will trade :

1) Short Term Trader : After shorting at the place indicated by you, a short term trader is alert when he sees a big red bar near F. I also see some horrizontal line near F so if it is a previous support, a short term trader will book atleast 50 % of his profits near this previous support if it was there. Else after the long red bar, he would not like to let go his profits but at the same time he would like to see if the market cracks further. The next bar is a small green bar...his profit taking level is now trailed to the high of this green bar. The next bar is a long legged doji and when the low of the green bar was cracked, trader is happy that the downmove seems to continue...but a long legged doji with a low which did not break the low of the large red bar is an indication that the bears are loosing control...so he takes his profits there....if the downtrend continues, he is ready to enter again but for the time being he is pocketing the profits....Huge volumes and the fact that the large red bar opened and closed near the high/low indicates that this could be a End of The Move bar and it turned out to be that.

Then the upmove follows but the downtrend is still intact...so he waits out and looks for a second opportunity to go short. He gets it at a red bar near I . Here the red bar attempted to go near the top and failed....this is a second place to short...and participate in the downtrend ....

2) Long Term Trader : Long term trader will not buy till the trend changes. If after making a pivot high at G, the market makes a higher bottom ( which it did) and takes out a pivot high at G ( market failed to do that ) the trend would have changed to up.He would have covered his short position at a loss and gone long when market takes out G . He would have taken a loss on his short trade, but that is how long tern trend traders trade....they dont expect profits on each trade but make big profits when the trend plays out.

Same chart, same trend but the two traders will trade differently.

Smart_trade

 

[DanPickUp]

Hmm

What about using some kind of option strategies which takes in account both direction? or even more sophisticated future strategies?

 

[P_MadhuLuthra]

Hello Vikas Ji..!! I would Like To Say Only One Thing..
Off course Trend Is Your Friend, But During My 9 Years Of Trading, I could Not Find That When It Will Change...?And How Many Time It Will Keep Changing Or What Pattern It Would Establish.. NO ONE CAN TELL...

 

[Smart_trade]

Hello Vikas Ji..!! I would Like To Say Only One Thing..
Off course Trend Is Your Friend, But During My 9 Years Of Trading, I could Not Find That When It Will Change...?And How Many Time It Will Keep Changing Or What Pattern It Would Establish.. NO ONE CAN TELL...

All that is not necessary to make money in the markets. All that is needed is which trend currently we are in, where can we enter with smallest risk,is market giving signs of reversal of the trend and has the trend reversed ?

And there are definate answers for all the above questions for making money in the markets.

But if you have been successful in trading a different strategy then probably that strategy works for you and you must continue with that strategy.

There may be 1000 ways of making money in the markets and trading the trend is definately one of them.

Smart_trade

 

[VIKAS 21]

Hello Vikas Ji..!! I would Like To Say Only One Thing..
Off course Trend Is Your Friend, But During My 9 Years Of Trading, I could Not Find That When It Will Change...?And How Many Time It Will Keep Changing Or What Pattern It Would Establish.. NO ONE CAN TELL...

Yes u r right....

Nobody can predict the trend....

But what is the need of predicting the trend, we can do well by just following the trend.

plss post ur charts with ur trades so that it could be understand where the problem is....

 

[VIKAS 21]

CPH: clear pivot high

CPL: clear pivot low

SPH: small pivot high

SPL:small pivot low

MPH:Major pivot high

All are requested to post their charts with these markings so that confusion be cleared.....