Trix Tricks

[karthikmarar]

Hi Karthik,

I am just back from a short trip to india. I was just going through your posts regarding the TRIX.

I was just curious enough to apply the same on NIFTY (TRIX - 9 day). While the TRIX was showing a Bearish engulfing pattern, NIFTY was going up and up ( i am attaching a chart in support of this). Finally NIFTY had to fall in confirmation of the TRIX.

Please let me know, If my analysis is right. Please correct me if I am wrong.

Satya

Satya

I dont understand what you meant by Bearish engulfing pattern of the Nifty. Are you are pointing out the almost sideways movement of the TRIX when the nifty was going up and up fromMay to October. The sideways movement clearly indicating pausing of the trend, tiring of the bulls. Also notice the little downward movement in July corelates correctly with the convergence of the moving averages. The turning point of the TRIX in mid july and early september clearly shows the uptrends. The bearish divergence before the fall and the current uptrend also shown by the TRIX turning upwards. Correct?

Satya pay attention to the slope of the TRIX also. It also tells us a lot on the strenght of Bulls and Bears. Normally sideway movement for a short term would indicate pausing of the trend and also in long term sideways movements the TRIX also moves listllessly sideways.

Hope I am clear. feel free to ask doubts if any.

warm regards

karthik

 

[srisara]

Karthik,

hmm.. may be i confused you and myself. let me put it in simple english (for the fear, i may use a wrong notation).

I am just observing 2 peaks made by TRIX during Early Sept and Late October. This 2nd peak is much lower than the 1st one and then the correction has started. However, if we observe the NIFTY, it was moving high and high from Sept to October, before going for that big fall.

My doubt is can we co-relate the two. TRIX is showing Bearish Divergence, but NIFTY is moving up, once the TREND is confirmed in TRIX forming a lower peak, can we go SHORT? (consider this as one of the indicators to take a decision?)


Satya

 

[karthikmarar]

Satya

Very correct. What your are seeing is a classical Bearish divergence of the TRIX. If you check the RSI, that will also show a Bearish divergence during that time. The Divergences are normally rare but when they occur they are stronge signals. Whether one can go short....? Better to get additional confirmations of bearishness I suppose..In my opinion depending on just one indicator for any decision is not good idea. Always get additional confirmations before you act.

regards

Karthik

 

[srisara]

Satya

Very correct. What your are seeing is a classical Bearish divergence of the TRIX.

Thanks, I am learning a bit of TA with the help of this forum feel lucky

Satya

In my opinion depending on just one indicator for any decision is not good idea. Always get additional confirmations before you act.

regards

Karthik

Absolutely, we need to atleast back test with 2-3 indicators to arrive at a solid confirmation of a trend and a decision making.

Satya

 

[gandharvashu]

Hi!

You people are right with TRIX, but the same divergence for Nifty fall was also provided by RSI one day earlier I think so, what r your views

 

[karthikmarar]

Ghandarvashu

In such divergences a day does not matter really.. We are not going to jump into action as soon as we see the divergence being formed. We have to always ensure the trend before we act, isn"t it?

Notice another interesting thing on Divergences. The time period of the Indicator throws different pictures. For example a 5-day RSI predicted the current pullback(...maybe I should say...pullup ) with a bullish divergence whereas a 13-day RSI did not show it. See the attached chart. So one has to choose the correct time period to suit the the trend one wants to see.... short , intermediate, long.

regards

Karthik

 

[srisara]

thats a really cool analysis by karthik. I think, more than indicators, its the external factors should rule while deciding the time period.

Satya

 

[karthikmarar]

Hi everybody

I notice something interesting in the Nifty Chart. There is bearish divergence of the TRIX onthe Nifty chart. It is similar to the one showed up before the last big correction. Maybe the tuesday fal was the correction? Or is there more to come. Ofcourse the RSi does not show the divergence. But the last bullish divergence which showed up on the trix was shown by the RSI either. Chart enclosed... Would love to have your comments.

Amit , Saint.. do have a look and comment.

best regards

Karthik

 

[Saint]

Hi everybody

I notice something interesting in the Nifty Chart. There is bearish divergence of the TRIX onthe Nifty chart. It is similar to the one showed up before the last big correction. Maybe the tuesday fal was the correction? Or is there more to come. Ofcourse the RSi does not show the divergence. But the last bullish divergence which showed up on the trix was shown by the RSI either. Chart enclosed... Would love to have your comments.

Amit , Saint.. do have a look and comment.

best regards

Karthik

Hi Karthik,

Nothing much to add to the above........quite a reliable indicator also in intradays.Like yesterday,we got a nice bullish div. before the mkt raced up a 100pts.But like any divergence on any indicator,can go on being "divergent" before the actual move comes.So when one sees a bearish divergence on the daily,time to keep a tighter rein on things,but does not mean time to sell or short.And vice versa for the bullish divs.

And,yes,we are getting a bearish div. again on the daily charts.

Saint
ps:Great indicator.........and thanx for sharing it with us.

 

[ragh_ash]

hi karthik,
why have stopped posting on this thread. just when i was getting a hang of these indicators, i find the discussion has stopped mid way. please restart.
regards
ragh_ash