I can help you with stock chart reading

[timtomlee]

Hi vvonteru,

Plz go thru the foll. :

1. If market is trending for a long time and is in overbought condition, we still
call it in an uptrend. Now for swing trade, we generally look for setups
where the underlying stock is in an uptrend for 3/6/9 months. Suppose a
stock is trending for the last 9 months and so is the market. Going by the
rule, we enter when it pullsback. If the next day, the markets enter
correction, the stock alongwith will fall down. If this happens, then our
set up that says enter when 3/6/9 months high will come in question and
that too in a trending market, where correction cannot be foretold.
What's your view on this situation? correct me if am wrong.

2. Have u considered "Hsitorical volatility" and HV ratio. If yes, can u suggest
any software program that has it and/or can u give me similar indicator as
HV ratio.

Kindly reply.

Regards,

sonu m.

 

[vvonteru]

1. Gujnrecoke
-- Downtrend is still there. Look for cross above down trend line and also some volume.

2. Bank of India
-- Have been following this after a failed setup for short. What a volume followed by price movement through out all stocks in the Bank Sector. In the last 17 days, there were only 3 down days. If one more down day on Monday, enter above that.

3. Gujarat Ambuja Exports
-- Wait to see how Friday's upday ends up. If it continues to go up, then wait for pull back. Observe whether the volume keeps up.

BuySellSignals.afl
-- Thanks for getting attention to the formula. I did not get any stock. Given my easier setup and entry, I got only 5 stocks. Market is in the transition mode. If it continues to go upwards, this formula may produce some setups.

I sincerely suggest you guys to read the book, 'Trade Your Way to Financial Freedom' by Van Tharp. This book is available as one of the e-books. This will change the way you trade. As the author mentions, setup is only 10 to 15% of the system. He stresses to concentrate more on Position Sizing and Exits.

A stock can be bought or short. Only 2 options. So, flip a coin before you buy or short. Heads or Tails. That gives you 50% probability to win or lose. Most setup and entry algorithms have less than 50% chance of making you money. What makes your trading success or failure is the Position Sizing (money management) and Stop Exit (risk) and Profit Exits (trailing stop mechanism). Do not evaluate your strategy over 1 or 2 trades. Evaluate over 10, 20 or 30 trades. The key is making trades using the same strategy over and over again. Thats really hard. Thats called high probability trading. Read book, 'Trading in the Zone' by Mark Douglas. The book is little bit boring, but does help in this perspective. The author challenges readers to make 10 trades consistently based on a predeveloped setup and entry criteria.

 

[vvonteru]

Hi vvonteru,

Plz go thru the foll. :

1. If market is trending for a long time and is in overbought condition, we still
call it in an uptrend. Now for swing trade, we generally look for setups
where the underlying stock is in an uptrend for 3/6/9 months. Suppose a
stock is trending for the last 9 months and so is the market. Going by the
rule, we enter when it pullsback. If the next day, the markets enter
correction, the stock alongwith will fall down. If this happens, then our
set up that says enter when 3/6/9 months high will come in question and
that too in a trending market, where correction cannot be foretold.
What's your view on this situation? correct me if am wrong.

There is a strong tendency for traders to get 100% success in all trades. Thats not possible. The shocking thing is, it does not matter. Think about. If you got 90% success trades over a span of 1 year with 10% failure. The success made Rs 10,000 profit. 10% Failure made 8,000 loss. How will you evaluate this system. How about this. A system produced 70% failure and 30% success. Profits are 10,000 and loss is 5,000. Did the percentage success matter.

So, success or failure are just outcomes of a trade where you don't have control over. Market is dynamic environment which is constantly changing. By selecting a setup and entry criteria, you try to give more than 50% probability of success. If it fails, so fine. Your position sizing algorithm already gives you how much you are constantly risking. If its a success, you want to make profit more than the risk. U only have control over what loss you can take when the trade fails and what profits you can make when trade succedes.

2. Have u considered "Hsitorical volatility" and HV ratio. If yes, can u suggest
any software program that has it and/or can u give me similar indicator as
HV ratio.

Kindly reply.

Regards,

sonu m.

Not yet.

 

[GKHERA99]

DEAR VVONTERU
THE CORRECT NAME OF THE BOOK FOR LINK TO DOWNLOAD IS Trade Your Way to Financial Freedom' by Van Tharp.

 

[sujarouf]

1. Gujnrecoke
-- Downtrend is still there. Look for cross above down trend line and also some volume.

2. Bank of India
-- Have been following this after a failed setup for short. What a volume followed by price movement through out all stocks in the Bank Sector. In the last 17 days, there were only 3 down days. If one more down day on Monday, enter above that.

3. Gujarat Ambuja Exports
-- Wait to see how Friday's upday ends up. If it continues to go up, then wait for pull back. Observe whether the volume keeps up.

BuySellSignals.afl
-- Thanks for getting attention to the formula. I did not get any stock. Given my easier setup and entry, I got only 5 stocks. Market is in the transition mode. If it continues to go upwards, this formula may produce some setups.

I sincerely suggest you guys to read the book, 'Trade Your Way to Financial Freedom' by Van Tharp. This book is available as one of the e-books. This will change the way you trade. As the author mentions, setup is only 10 to 15% of the system. He stresses to concentrate more on Position Sizing and Exits.

A stock can be bought or short. Only 2 options. So, flip a coin before you buy or short. Heads or Tails. That gives you 50% probability to win or lose. Most setup and entry algorithms have less than 50% chance of making you money. What makes your trading success or failure is the Position Sizing (money management) and Stop Exit (risk) and Profit Exits (trailing stop mechanism). Do not evaluate your strategy over 1 or 2 trades. Evaluate over 10, 20 or 30 trades. The key is making trades using the same strategy over and over again. Thats really hard. Thats called high probability trading. Read book, 'Trading in the Zone' by Mark Douglas. The book is little bit boring, but does help in this perspective. The author challenges readers to make 10 trades consistently based on a predeveloped setup and entry criteria.

HI Vvonteru
Thanks for your analysis.
Regards
Suja

 

[arbitrage_gal]

Vvonteru sir,
Am new to tis form but ur thrd is ver interesting tho' i dont understand much. Have u written a book on ths?
regs
rohini

 

[vvonteru]

Vvonteru sir,
Am new to tis form but ur thrd is ver interesting tho' i dont understand much. Have u written a book on ths?
regs
rohini

No. Most of what I write are my understanding of the market and my readings. I constantly read books along with my trading. They keep me in the loop. If not, as you trade, there is a tendency to move away into the greed/gambling stuff.

Also, Should I buy only if there is a buy signal on the previous day or is it fine if I buy if buy signal is generated say 3-4 days back also?

As long as U are not trying to catch up. Feeling of missing out is always there. U should try to get out of the feeling as there will always be opportunities. If you do take it, don't forget to change the entry and exit points in the Position Sizing Calculator to use the new position size.

 

[ragsid]

Hi Vvonteru,

Give me the links too, email to [email protected]

- Rags

 

[vvonteru]

Market is kind of overbought. But, different sectors are having different timing. Pharma has been down for some time. Look at Ranbaxy. I know from some of you that it is fundamentally a good stock (if it helps setup, why not). It has nice crossover with pull back. What I am not liking about the pharma and cement stocks is low volatility. But, sometimes that is good too. Low volatility compared to its historical volatility leads to higher prices. During the low volatility, consolidation may take place.

Ranbaxy
ATR: 14
Close: 392.65
Entry: Today's high + x = 397.5 + x = 400
Stop: 366 (below previous base and between 2*ATR & 3*ATR)
Profit: Trail Stop

Similar Stocks in Pharma Sector:
1. drreddy
2. DIVISLAB

 

[GKHERA99]

views on mtnl please