I can help you with stock chart reading
- Thread starter vvonteru
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IGL looks good. Continue to trail the stop.
timtomlee
-- I will try it out on Sunday and let you know. You are after the Holy Grail hah!!! As you do that, please focus part of your time researching on Position Management, Stop Loss and Trailing Loss. There is lot we can improve on Stop Loss and Trailing Loss.
Bharti Airtel
-- So far so good. If you want to enter new, I would wait for it go up above the 430 resistance. After it does and pulls back then I would enter.
Guys,
Watch the volumes. I only go after Price and Volume. All the others are just filters that fit what we want to see. If the volume does not support price action, be wary and avoid the stock. And be consistent on how you trade. Consistency is the key in making probability work for you.
timtomlee
-- I will try it out on Sunday and let you know. You are after the Holy Grail hah!!! As you do that, please focus part of your time researching on Position Management, Stop Loss and Trailing Loss. There is lot we can improve on Stop Loss and Trailing Loss.
Bharti Airtel
-- So far so good. If you want to enter new, I would wait for it go up above the 430 resistance. After it does and pulls back then I would enter.
Guys,
Watch the volumes. I only go after Price and Volume. All the others are just filters that fit what we want to see. If the volume does not support price action, be wary and avoid the stock. And be consistent on how you trade. Consistency is the key in making probability work for you.
Last edited:
Hi VV,
Thanks for ur reply. I am not after the "Holy Grail", as i know, no such thing exist in the market. As u have mentioned earlier, when we enter, our probability to win is 50%, no matter how perfect is our system. I find ur system simple, scientific and effective. That is why all of us are hooked to this thread, because ur response is not biased, u encourage to learn ,and finetune our trading system.That is what i tried to do.This was just another way to look at ur system. I hope it works and is benficial to other members.
For stop loss, i liked ur "volatility based stop system". i.e.,
3*ATR = R (initial risk), as it eliminates the risk of market noise to hit ur stop, if we place stop at 5% below ur entry price, as DAVE LANDRY suggests. But i would like to add, "Always put ur stop,below the recent
pivot low or "3*atr or 2*atr", whichever is lower" and check the pivot low in "weekly chart", which gives a strong support area.
For position management, I use "percent risk model". Divide % risk u will take on the stock by 3*ATR, which gives u total no. of shares. For example, i want to risk 2% of my trading capital of 1 lac. 2% = 2000.Suppose 3*atr = 10
Then , 2000/10 = 200 is the no. of shares i will purchase.
On trailing stop loss, I think Traderji's method to put stop at previous 3 bar low, if u r long and previous 3 bar high, if ur short, is very effective. Still i am researching new methods and will update u with my findings.
Regards,
Sonu M.
Thanks for ur reply. I am not after the "Holy Grail", as i know, no such thing exist in the market. As u have mentioned earlier, when we enter, our probability to win is 50%, no matter how perfect is our system. I find ur system simple, scientific and effective. That is why all of us are hooked to this thread, because ur response is not biased, u encourage to learn ,and finetune our trading system.That is what i tried to do.This was just another way to look at ur system. I hope it works and is benficial to other members.
For stop loss, i liked ur "volatility based stop system". i.e.,
3*ATR = R (initial risk), as it eliminates the risk of market noise to hit ur stop, if we place stop at 5% below ur entry price, as DAVE LANDRY suggests. But i would like to add, "Always put ur stop,below the recent
pivot low or "3*atr or 2*atr", whichever is lower" and check the pivot low in "weekly chart", which gives a strong support area.
For position management, I use "percent risk model". Divide % risk u will take on the stock by 3*ATR, which gives u total no. of shares. For example, i want to risk 2% of my trading capital of 1 lac. 2% = 2000.Suppose 3*atr = 10
Then , 2000/10 = 200 is the no. of shares i will purchase.
On trailing stop loss, I think Traderji's method to put stop at previous 3 bar low, if u r long and previous 3 bar high, if ur short, is very effective. Still i am researching new methods and will update u with my findings.
Regards,
Sonu M.
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For those who find UPPERCASE straining, I am reposting in Sentence Case.
"Two diffeent MACD indicators"
1st. indicator - MACD (8,50,1)
2nd. indicator - MACD (50,200,1)
If 1st. indicator is below "0" value, that means 8 day ema below 50 day ema,
bearish for intermediate term.
If 2nd. indicator is below "0" value, alongwith the 1st. indicator, bearish for long term.
Now, as 1st. indicator is rising above "0" value, but 2nd. indicator is below "0"
value, we must be cautious before entering the market. If both are rising above "0" values, we can go long.
Also, if both the indicators are above the "0" value for a long time, and the
2nd. indicator is trending more than the 1st. indicator (we can do this by visual inspection), then we can expect correction any time. Therefore,
be cautious in such scenario before going long.
Hope this helps. Alterations will be made after VV's reply, if any.
I am also researching on "STOP LOSS" and "TRAILING STOP LOSS" using
MACD and MOVING AVERAGES.
I will update it in future.
Regards,
Sonu M.
"Two diffeent MACD indicators"
1st. indicator - MACD (8,50,1)
2nd. indicator - MACD (50,200,1)
If 1st. indicator is below "0" value, that means 8 day ema below 50 day ema,
bearish for intermediate term.
If 2nd. indicator is below "0" value, alongwith the 1st. indicator, bearish for long term.
Now, as 1st. indicator is rising above "0" value, but 2nd. indicator is below "0"
value, we must be cautious before entering the market. If both are rising above "0" values, we can go long.
Also, if both the indicators are above the "0" value for a long time, and the
2nd. indicator is trending more than the 1st. indicator (we can do this by visual inspection), then we can expect correction any time. Therefore,
be cautious in such scenario before going long.
Hope this helps. Alterations will be made after VV's reply, if any.
I am also researching on "STOP LOSS" and "TRAILING STOP LOSS" using
MACD and MOVING AVERAGES.
I will update it in future.
Regards,
Sonu M.
Re: Dear VV: Classic Diamonds---Diamonds are for ever!
Lets be frank with ourselves. This stock has good momentum. It pains to be not in it. So, why question whether its too late to enter. Because, it is not the point when we (I) enter a stock.
You might make money if you enter now. But, is it consistent in the way you trade. Definitely it is a qualified candidate that satisfies any trader's setup condition. But, does it satisfy entry condition at this point. Or do you feel you missed the entry couple of days back.
As I said earlier, be consistent in the way you trade. You might make money in the short term by trading arbitrarily. But, you will lose on the long run. Have conditions written down for
1. Setup: When U will consider a stock for buy
2. Entry: When U will actually enter that stock
3. Stop Loss: How U will determine stop loss
4. Profit: How U will sell to make profit
Repeat trades with these conditions without emotions. Once you are comfortable with these conditions, don't change them until U apply for 10 to 20 trades and U can assess the results.
Lets be frank with ourselves. This stock has good momentum. It pains to be not in it. So, why question whether its too late to enter. Because, it is not the point when we (I) enter a stock.
You might make money if you enter now. But, is it consistent in the way you trade. Definitely it is a qualified candidate that satisfies any trader's setup condition. But, does it satisfy entry condition at this point. Or do you feel you missed the entry couple of days back.
As I said earlier, be consistent in the way you trade. You might make money in the short term by trading arbitrarily. But, you will lose on the long run. Have conditions written down for
1. Setup: When U will consider a stock for buy
2. Entry: When U will actually enter that stock
3. Stop Loss: How U will determine stop loss
4. Profit: How U will sell to make profit
Repeat trades with these conditions without emotions. Once you are comfortable with these conditions, don't change them until U apply for 10 to 20 trades and U can assess the results.
Hi mansukh,
The time frame is "daily" chart and by the way, I researched this method
on "icharts.in". When we talk about 8 day ema, 50 day ema or 200 day ema
it means the time frame is "daily" because the ema's are "daily", not weekly
Sometimes, we use MACD indicator in "weekly" charts as well, but for
swing trade, we use mostly "daily" charts.
I am researching more methods with MOVING AVERAGES. I will update it
soon.
Regards,
Sonu M.
The time frame is "daily" chart and by the way, I researched this method
on "icharts.in". When we talk about 8 day ema, 50 day ema or 200 day ema
it means the time frame is "daily" because the ema's are "daily", not weekly
Sometimes, we use MACD indicator in "weekly" charts as well, but for
swing trade, we use mostly "daily" charts.
I am researching more methods with MOVING AVERAGES. I will update it
soon.
Regards,
Sonu M.
Hi VV,
We can use MACD INDICATOR for "overbought/oversold" level for
swing trade.
DAVE LANDRY in his book on "SWING TRADING" suggested using
3/10 oscillator to check overbought/oversold levels. I tried the
same with MACD indicator and it worked! (This method works best
in trending stocks, having good momentum)
MACD - 3,10,1.
If MACD value is below "0", that means the stock is oversold and when
it crosses just above "0" value, we can go long.
But i advise to use this along with other "oscillators" like RSI,
SLOW STOCH or WILL'SR%. This will give a better idea.
If the above macd indicator is used alongwith, say, SLOW STOCH, and if
both confirm "oversold" level, then we are sure about our method.
Changes will be made after VV's reply, if any.
Kindly reply,
Regards,
Sonu M.
We can use MACD INDICATOR for "overbought/oversold" level for
swing trade.
DAVE LANDRY in his book on "SWING TRADING" suggested using
3/10 oscillator to check overbought/oversold levels. I tried the
same with MACD indicator and it worked! (This method works best
in trending stocks, having good momentum)
MACD - 3,10,1.
If MACD value is below "0", that means the stock is oversold and when
it crosses just above "0" value, we can go long.
But i advise to use this along with other "oscillators" like RSI,
SLOW STOCH or WILL'SR%. This will give a better idea.
If the above macd indicator is used alongwith, say, SLOW STOCH, and if
both confirm "oversold" level, then we are sure about our method.
Changes will be made after VV's reply, if any.
Kindly reply,
Regards,
Sonu M.
So far it works good.
Can you give an example. I was looking at SATYAMCOMP. It was not clear, unless you want to fit in the result.
For trailing stop loss, try Adaptive Moving Average.
Thanks for trying.
Can you give an example. I was looking at SATYAMCOMP. It was not clear, unless you want to fit in the result.
Hope this helps. Alterations will be made after VV's reply, if any.
I am also researching on "STOP LOSS" and "TRAILING STOP LOSS" using
MACD and MOVING AVERAGES.
I will update it in future.
Regards,
Sonu M.
I am also researching on "STOP LOSS" and "TRAILING STOP LOSS" using
MACD and MOVING AVERAGES.
I will update it in future.
Regards,
Sonu M.
Thanks for trying.
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