Further clarity on nugget
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1] trend factor
CONTINUITY CONCEPT - normally novices(fools from longterm investors which i also practiced some yr and discarded due to poor return,-believe it) a linear concept shall go up ,what goes down must go down further.This can be used instead of yr in month (max) - easily in week and day timeframe. Depending upon strength ,slope of trend -a great study of past price behavior ,we can create fairly idea how much shall be duration now. A rule of thump : if u see 3 day expected move -see in 10 hr ma chart. If u want to SEE a day move -watch hrly chart.
Impulse strength,and steepness helps to understand trend validity,- many a literature on Elliott clarified it.
Relative position of STRUCTURE with economic backdrop is crucial to understand trend continuity(nearly all pro even make mistake here)
Going in detail on price action study helps me immensely (1st hr at open /close) .Most of the time its in balance ,but with CLARITY in observation u know when Trend shall resume,as well as strong one - may even last a full day. If u r lucky enough may get a quarter full of trend.
Specialty of intraday price action: U HAVE TO DO VERY QUICKLY-understanding trend-DEFINE DAY,entry in direction of trend ,suitable stop validation(when u shall consider today is not trend day nor ur stock is trending),- target achieve and getting out .
ASSUMPTION ; TREND IS EASIER TO TRADE,LOGICALLY CLEAR . only good reference pt to start with- yesterday close,high ,low- next SEE LAST WEEK CLOSE ,HIGH.LOW - seeing price behavior there, how price has approached tells some characteristics on sentiment/moneyflow.
remember another tool -higher timeframe bias.MORE THE TIME IS HOLDING HIGHER REGION -STRONGER IS STABILITY ,so the trend in future .- read it as accumulation.only after mastering it can be a break out trader.
U may fib retracement -also to understand strength ,less in Retracement better is strength.
A higher High = sign of good trend and its continuation is lot of steam is left.
Remember when Higher low is breached ,doubt the trend and book profit.
Do a habit of detail study on EOD full day bar as well as HR bar - it clarifies trend or nontrend day very well in subconscous mind.
However Trend continuation depends on GIANT FOOTPRINT ,BIG FUND BUY/SELL can be seen on chart/delivery %. BECAUSE they do audit/loan giving know beforehand the quarterly result and use it -also spl research team in midcap find a good candidate a strong buy gives WRB.SO location of wrb ,structural study helps us in detail strength of trend continuation.Sometimes using hype of media at a strong p/e value ,they come to dump (take opp position against av joe- SIGN of exhaustion bar at top )
However from basic of Dow ,we know counter trend exist -profit book is natural ,so is ZIG-ZAG formation (only thing healthy trend has certain retracement limit)
So trend resumption of Greed(being bullish) or more participation in market (new moneyflow)- if that wont happen - slowly Distribution occurs ultimately diminishing speculation activity.
So faith on economy/ability of the country to prosper is reflected in TREND.But dont trade against big Giant FII, particularly when they dump.
So Trend and sideways whether accumulation OR distribution r part of market , sector rotation is strength searching in group based on Macro .
Its bank -unless showing strength country cant improve, next is infra + power ,then only longterm bull . Yes trade that expectation,but actually what we see in price???
2] Time factor
time is ultimate resource in life, Clarity is key.Opposite is confusion .As we all know various sentiment/view (trend idea) always exist in market and in very small time unit ,PRICE is always in equilibrium.Since equilibrium is not tradable, how its breaking,how far it can go,continuity of move clarity is part of trade plan[ visualization to act]
lower the time -easier to see,but more random, so i find 10min candle i can see while forming ,and little ability to decipher it. Many a good software/master trader may deal in 5min/3min -and thats their superiority (idea is same).
take Any std candle bar, high is normally attack pt of bear, low =buy start of bull. To understand what i try to say create 5no X 2min bar at left, and combo 10 min bar on Right.Now observe keenly action on price behavior while forming next 10 min(also see left side 5 bars)- clarity on seeing 5 small bar to create one , equilibrium tendency -sideways characteristics will be in build in U. In sometimes u may see,bias- bias to break on top (u may choose bottom also ,for bullish i am chosen )- uptrend is coming. U can trade it, earlier entry is better ie. while its breaking ,particularly if its imp Pivot.
NOW in indian market daily u can see it normally 915-1000 as well as 1430-1530.First half with no news, OR against published news, 2nd half assuming good moneyflow trade in the direction also in big size( may used to hold for days).
My observation is news planted to sell and get out, 1430- time to act by giant. The luxury of a trader is this 2hr is sufficient to run family engine.( ofcourse it has taken many yr to understand /implement it)
Now depending upon capability/experience- courage/clarity/conviction and confluence effect on MA SLOPE, REVERSAL PT AT HIGHER TIMEFRAME ,OLD GAP PT we can do it more easily.
Somebody like me who r basically countertrend player(entry at taking out of last
impulse by atleast equally strong reactionary force with Vol) may prefer to entry at imp support pivot/FIB RETRACEMENT(various % value) confluence pt, provided price has shown exhaustion.AND ENJOY THE FRUIT WHEN NEW TREND RESUME. but i loss when it dont happen ,remember counter trend entry as timing with small profit target /high loss potential if traded without stop, ur skill to get out early and but ad when right makes u to use it with success.
another theme is ADDing of time - half hr bull candle + half hr bear candle= one hr doji
Similarly Engulf formation , Hammer & inverted formation -similar concept we use to learn Clarity with Synthetics -drawing payoff A+B=C ,anchor leg + safety leg =forming option strategy
So we understand and try to clarify -3 group successful traders breed exist (one may be mixed)- COUNTER TREND - TOP/BOTTOM SEARCHER - ENTER SMALL ,BOOK LOSS ,WHEN CONFIRM HIS EARLY ENTRY TRADE BIG
TREND TRADER: BELIEVES IN 1ST PULLBACK OR BREAK OUT, EARN BY MOMENTUM- FEEL COMFORT IN LATE ENTRY (LET TREND RESUME THEN ENTER ATTITUDE)
VOLATILITY TRADER : breaking of small zone, price shall go in higher energy stabilization level(volatility cycle theory, extensively used by F&O market. They watch /observe low vol small range sideways market.
Problem is when we trade at random price ,dreaming of trend- or bring our hassles from emotional mind.