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Since my journey as a learner of the subject of technical analysis,I found some indicators to be very interesting to deal with,and I applied them in real trading. Then.....The whipsaws came in so frequently! A buy signal today will be a sell tomorrow. Now where I have gone wrong? Why I still lose money if I know the momentum indicators to deal with? The question of trading profitably is gaining momentum in myself and then I went to attend classes by two very successful traders and analysts of my city. Now I identified my mistake.......
As my classes are going on,I am finding one thing istilled in my mind. "Trend". The philosophy of Dow is something like one of Newton's laws of motion.....Stock markets move in trends and continue to move in that direction untill a reverse in that happens. I am enlightened with the fact. I read in book about the reversal of a trend,the patterns (H&S ,Double tops n Bottoms etc.etc.).Support, resistance,fibonacci,gann,oscilator......what is left? That is trend. My philosophy of understanding the subject has got a shake from this subject of trend. Three trends.....UP,DOWN AND SIDEWAYS.It is not that I was totally alien to these terms,but I missed to catch it.If someone is not known to this fact,that you are not supposed to predict what will happen in future,but to judge what is happenning at present,and don't understand the trend and trade accordingly,then he/she is only trading,not trading successfully,consistently.
I am very much thankful to the great post by Saint: "Teach a man to fish and......",along with my teacher. Its a long way to go,but still I can bet that my very first lesson is clear in markets.......Trend.And not only trend but to trade in the "direction of the trend" and not to "buck the trend". Thank you Saint. You are the real teacher.Hundreds of books can't match the teachings and understanding of a real successful experienced trader!
And lastly,I must add my finding till date,about daytrading. I am using IRIS as my real time data and software provider.Its very user friendly.
I am using the combination of 3,13,39 Ema for eod (as stated in a thread of this forum) and real time charting and using the crossovers and price stabilty over or under the shortest(3 in this case) and the medium average(13 in this case),along with the identification of the trend, to go long or short. I am finding good result. Also using the bulk deals of volume more than 5000 or value more than 5 lakh rupees,price difference > 1 rupee with close = high for bullish (for going long) and close = low for bearish stocks (for shorting) in the 5 minutes candle bars,for tracking opportunities in the real time. Also keeping three days intraday history beside my relevant chart. I am using the daily chart as "tile chart" for every scrip so that I can understand the trend (near term) and take decisions.Also I use ADX and ADXR as the understanding of current direction.Overall,it is very simple trading system in place......no complication.But one thing I am using strictly which I should say here.
My teacher said one thing,that his teacher taught him: "Stoploss first,Stoploss second,Stoploss last". So before entering a trade I am calculating the stoploss first,then entering the trade and then quickly giving my trading terminal the stoploss,so that in case the price changes direction very quickly in seconds,I am not left crying that my stoploss was not executed and blaming the Luck lady. The pivot,R1,R2,R3 and the S1,S2,S3 are all important levels in day trading that are to be taken into account for entering,exiting or deciding stoplosses except the other things for a trade.
OK.......That's all for today. Keep me posting that what you guys feel about my developments and comment accordingly. As my understanding of the subject improves I will be posting more and try to point out where I was wrong previously.
Hari om.
As my classes are going on,I am finding one thing istilled in my mind. "Trend". The philosophy of Dow is something like one of Newton's laws of motion.....Stock markets move in trends and continue to move in that direction untill a reverse in that happens. I am enlightened with the fact. I read in book about the reversal of a trend,the patterns (H&S ,Double tops n Bottoms etc.etc.).Support, resistance,fibonacci,gann,oscilator......what is left? That is trend. My philosophy of understanding the subject has got a shake from this subject of trend. Three trends.....UP,DOWN AND SIDEWAYS.It is not that I was totally alien to these terms,but I missed to catch it.If someone is not known to this fact,that you are not supposed to predict what will happen in future,but to judge what is happenning at present,and don't understand the trend and trade accordingly,then he/she is only trading,not trading successfully,consistently.
I am very much thankful to the great post by Saint: "Teach a man to fish and......",along with my teacher. Its a long way to go,but still I can bet that my very first lesson is clear in markets.......Trend.And not only trend but to trade in the "direction of the trend" and not to "buck the trend". Thank you Saint. You are the real teacher.Hundreds of books can't match the teachings and understanding of a real successful experienced trader!
And lastly,I must add my finding till date,about daytrading. I am using IRIS as my real time data and software provider.Its very user friendly.
I am using the combination of 3,13,39 Ema for eod (as stated in a thread of this forum) and real time charting and using the crossovers and price stabilty over or under the shortest(3 in this case) and the medium average(13 in this case),along with the identification of the trend, to go long or short. I am finding good result. Also using the bulk deals of volume more than 5000 or value more than 5 lakh rupees,price difference > 1 rupee with close = high for bullish (for going long) and close = low for bearish stocks (for shorting) in the 5 minutes candle bars,for tracking opportunities in the real time. Also keeping three days intraday history beside my relevant chart. I am using the daily chart as "tile chart" for every scrip so that I can understand the trend (near term) and take decisions.Also I use ADX and ADXR as the understanding of current direction.Overall,it is very simple trading system in place......no complication.But one thing I am using strictly which I should say here.
My teacher said one thing,that his teacher taught him: "Stoploss first,Stoploss second,Stoploss last". So before entering a trade I am calculating the stoploss first,then entering the trade and then quickly giving my trading terminal the stoploss,so that in case the price changes direction very quickly in seconds,I am not left crying that my stoploss was not executed and blaming the Luck lady. The pivot,R1,R2,R3 and the S1,S2,S3 are all important levels in day trading that are to be taken into account for entering,exiting or deciding stoplosses except the other things for a trade.
OK.......That's all for today. Keep me posting that what you guys feel about my developments and comment accordingly. As my understanding of the subject improves I will be posting more and try to point out where I was wrong previously.
Hari om.
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