Experiments in Technical Analysis

[dipankar_ghosh]

Hello everyone on this wonderfull site.I have benefitted from the discussions posted here.

 

[dipankar_ghosh]

Could anybody tell me the extreme short term targets of Hindusthan Oil Exploration and TVToday Regards

 

[karthikmarar]

Hi Dipankar

You have selected two stocks still in bear grips. They sort of never really recovered after the Big May fall.

It is advisable is keep away from these even for short term.

Karthik

 

[pkjha30]

Hi Rahul

I was a bit preoccupied with office work and also working sector and industry allocations for NSE stocks for Amibroker. Added to that health has been a dampener of late.

Karthik

Hi Karthik

Take good care of your health. Overwork in desert region could easily sap one's energy. Wish you health and wealth both. And we do need your doubt relief and experimentations but not at the cost of your health.
pankaj

 

[karthikmarar]

Dear Pankaj

Thanks a lot for the concern. I have recovered well and ready.

Looks like the sharks will put up good show this week on Midcaps too. Finally they have succeeded in creating the euphoria. Now in order to get more guys in some action required on the Midcaps front too.. Good time for short term gains... be sure to get ut before the axe falls...

warm regards

karthik

 

[karthikmarar]

Hi Everybody,

I am back to this thread after some time. Before we proceed further would share something I came across recently with you all. Again not related to Technical Analysis, but on trading in general.

Many members and friends often come to me to do an evaluation of their trading, especially when they are doing badly. One day a friend Mani Iyer dropped in and said, My trading is pretty bad. The stock always shoots up after my exit. Luck is not with me any more. Can you have a look at my trading. And then handed a list of his trades to me.

One look, the list did look quite unimpressive. Then we decided to go through each trade and I opened the chart of the first stock. The stock was dull, aimless sideways movement and did not warrant any attention. That first trade details as follows.

Stock : HCC , Entry date : 19/9 Price:106.3 , sell date: 29/09 sell price : 106.1

I was puzzled and our further conversation went like this.

Mani: I entered HCC on 19/9 and ooooh.. it reached 94 , I have had enough, I will exit at the earliest occasion, I exit ....and see now a whooping 30% gain
Me: Mani, First why did you enter this stock? What were the criteria?
Mani: Thought it would go up
Me: Thought.. you mean no other criteria? No, crossover, volume increase, n day breakout? No Tips? Somebody posted in the forum?
Mani: .er.mmm.. well it looked set for good move
Me: looked set.. Mani, in what way Actually the day you entered the price closed below the previous day. Did you use some Indictors
Mani : no Indicator..mmm.. oh.. .ya Think it was price action
Me: But the price action does not indicate any bullishness..
Mani: Well, there was some reason, dont remember exactly..but there was one
Me: Ok, Why did you exit the stock when you did?
Mani: Thought it will drop and look the day after I sell the stock moved up. If I were holding it still, I would have made good money, my rotten luck
Me:Mani, you made a exit when the stock was about to move up, momentum was just building and the day you exited was the ideal day for entry
Me: Ok what was stoploss? Was there any profit objective
Mani: Preservation of capital is important so I will sell if I feel that the stock may drop

The story repeated for most stocks. Ten trades, overall profit Rs.400. Commission paid to the broker was much more the money earned. His broker must love this guy.

Me: No entry rules, no stoploss, no profit taking targets, no money management..nothing .MANI, YOU DONT A SYSTEM

This is not an isolated case. I have come across many members who trade with out any system and finally blame their rotten luck, the stupid broker. They dont realize that trading without a system is akin to gambling. If they continue like this they will soon get frustrated and forsake trading itself.

I narrated this interesting incident in order to bring out the importance of having a system for better trading.

In due course we will cover the basic aspects of a trading system more in details so that the newbie could start at least building their basic system.

Oops, this has become rather an elaborate post.. taxing your patience..


Warm regards

Karthik

 

[J_rgopalan]

Dear kartik

I am a new member. Your indicator on Elliot wave is very interesting. I ma also fairly a novice to metastock as well. can you explain a little more as to how we the codes you have given can be used with metastock 9 version.

Tks & Brgds

j.Rajagopalan

Ok Karthi
I m first
I Found Two indicator For meta stock


1)Elliot Wave :
------
pr:=Input("Elliot Wave minimum % move",
.001,100,2);

{ Beginner Elliot Wave stuff }
EWpk:=PeakBars(1,H,pr)=0;
EWtr:=TroughBars(1,L,pr)=0;

{ Intermediate Elliot Wave stuff }
zz:=Zig(C,pr,%);
zzHi:=Zig(H,pr,%);
zzLo:=Zig(L,pr,%);
avg:=(zzHi+zzLo)/2;

{ Advanced Elliot Wave stuff }
RetroSuccessSecret:=If(EWpk,zzHi,
If(EWtr,zzLo,If(avg>Ref(avg,-1),H,L)));
EW:=Zig(RetroSuccessSecret,pr,%);

{ Plot on price chart }
EW
--------------------------
2)Elliot Wave Signals :
--------
pr:=Input("Elliot Wave minimum % move",
.001,100,2);

{ Elliot Wave engine }
EWpk:=PeakBars(1,H,pr)=0;
EWtr:=TroughBars(1,L,pr)=0;

zz:=Zig(C,pr,%);
zzHi:=Zig(H,pr,%);
zzLo:=Zig(L,pr,%);
avg:=(zzHi+zzLo)/2;

RetroSuccessSecret:=If(EWpk,zzHi,
If(EWtr,zzLo,If(avg>Ref(avg,-1),H,L)));
EW:=Zig(RetroSuccessSecret,pr,%);

{ Buy/Sell Elliot Wave stuff }
EWbuy:=TroughBars(1,EW,pr)=0;
EWsell:=PeakBars(1,EW,pr)=0;

{ Plot on own window }
EWbuy-EWsell
____________________________________
Kaisa laga . please tell me .

 

[karthikmarar]

Hi Rajagopal

This EW indicator was actually posted by Jay. You can copy the code in the metastock Indicator builder to create these indicators.


regards

karthik

 

[asnavale]

Wishing all the members a happy and prosperous Diwali. I wish all the members have a very successful trading year.

-Anant

 

[karthikmarar]

Trending or Ranging.....

Hi Friends

Hope you all had a wonderful joyous Diwali celebration. With a truncated trading week and the fno expiry the coming week may not be very eventful. The week after could be exciting. Meanwhile we will continue with our journey into the exciting world of Technical analysis.

Trending or ranging.. That is a question that often bothers us in our trading. This decides our approach. We already saw that ADX and RAVI helps us to understand whether the stock is trending or ranging. We saw that RAVI does a better job many a times compared to ADX.

Now let us also look at other indicators useful for the same purpose. One indicator widely used is the linear regression slope.

Let us have a brief look at the linear regression slope. We will not go into the details of the mathematics as it is a wee bit complex.

The Linear regression method uses a least square method for finding the best-fit line for a series of prices. We use the slope of the best-fit line to see if the prices are moving up or down. The slope can tell us if the stock is trending up or down. The regression slope also depends on the period considered.

Another calculation from the linear regression analysis is the Correlation Coefficient otherwise known as r2 (R square). This value varies between 0 and 1 and provides an indication of how reliable or strong the trend is. When the price is moving listlessly sideways the r2 value is near zero and when the trend is very strong near one. So the r2 can be used as confirmatory Indicator for the trend strength. The r2 value depends on the number of periods used for a regression analysis. For each period we can calculate a critical value beyond which the trend can be said to be reliable.

Luckily for us we need not go into complex calculations as most software have inbuilt indicators for the linear regression slope. The r2 values are also not difficult to calculate and the critical values for various periods are already available.

Before we go further on this let us just have a look at the linear regression slope indicator with the r2 values plotted as histogram. Chart enclosed...

More on this a little later.