Learning Delivery Trading and Investing

[DanPickUp]

Hi asnavale

My question from me to you would be : What would improve, if you would have such a file ?

Would you make better trades or what ?

There are already hounder t and thousand of indicators around and still, traders do not trade better.

I am an old fashion trader, using old indicators and enjoy looking at all that new stuff.
( I have a source for ninja trader, to get many individual, not official files and I see how it looks. But it did not improve my trading style. As I any way never know exactly, where market will head to, I stay with what I like and understand and with what I make money.)

Here one example, how a chart pictures from me can look, when it comes to support and resistance :

http://img337.imageshack.us/img337/6269/theclassicalway.png

Point and Figure is a very old indicator ( not any new files, only testing and testing which box fixes the best for this and this market and time frame ) and I take out a piece of the cake. Some times it works and other times I have to adjust the strategy in to an other one, if I am not in a loss. If I am in a loss, then I am out. I then prepare the next entry step and then lets go again. I am not a typical day trader. I even hate to trade short time frames, expect it is a clear range like we many times have in the currencies. Then it can be like money machine. Short, long, short, long and so on.

Beside that I go for some other individual indicators ( which every body can decide by him self, as there are so many around and I have posted in the traders Den, which mix you can use, when fellow traders not want to fall in the trap by using different indicators which give finally the same information, just with other names ). I also use mathematical plays, volatility, strike volumes, comparing time frames and market correlations and that is it in general.

One old trader told me once : Between earth and sky is not to much. So we better let it be like that and we always can bread.

As I do not know exactly what you trade, I just gave some inside look at how I organize my self. I know that I am some times a little bit harsh ( Every body has his behavior and that is my one ) so I guess you got used to it in the mean time.

The only thing I know, you must be one of the big guys here. My explanation was one in a nut shell and it just was my style of posting. I guess you are a direct stock and future trader. I am not.

Still, what I have become clear about here in this forum in the last few weeks ( also with the help of Savant Guarde, Tsnt234, oilman, Raunakagarwal and other ones - I mean your names are incredible and always a pain for me to tipe,:lol:, but thanks for your indirect response ) most of traders search for the same : They search for some kind of final indicators. I became now clear about that by being some times provocative and some times by giving from my side information.

I am clear about this now for ever :

THERE IS NO PERFECT INDICATOR !

Forget about that !! MM, a good business plan and positive live behaviors will do it.

Have a nice Saturday

Dan

 

[tnsn2345]

Hi asnavale

....
I am clear about this now for ever :

THERE IS NO PERFECT INDICATOR !

Forget about that !! MM, a good business plan and positive live behaviors will do it.
....

Dear Dan,

Like I have written somewhere on this forum, I have researched, used, altered and later dumped all the indicators available on the earth (have now got so much insights on mathematical and technical parameters of all the proclaimed indicators, that I can author a book by myself) I now just follow basic charts (not even volumes stats !!!) and trade my daily, short TF and long TF investments. Yes for Options, still I get help of mathematical models but not for decision making but for building strategies. But again these are not indicators in any sense.

A good business plan (a trading plan is a subset of this) is what it takes for a stable and rock solid foundation. Now with a reasonable and consistent strike rate (by most of the traders standards) I couldn't but just agree on what you have written in the above post.

The best quote from your post still remains : ' I do what I like and understand and make money from it'.

Regards,

Sorry Rohit, (Rajputz - guess this is your first name I understand from Raunak's post), again a tangential discussion on your thread but this is really dil ki baat juban pe...

 

[tnsn2345]

Hi Rajputz,

The S/R curves drawn in the charts I posted are not manually or arbitrarily drawn. These lines are produced in AmiBroker by an AFL.

Soon I will post the AFL here with its theory, usage, interpretations and limitations etc.

-Anant

Dear Anant,

Kindly excuse me for being judgemental on your AFL but looking at the S/R lines, to me it largely resembles the Moving Average and BB lines and I guess your AFL may be still be primarily and largely based on this logic.

Like I had mentioned on this thread earlier that moving averages can provide you with S/R and entry/exit points for larger TF /delivery based investments/trades, I look forward to your logic.

Regards,

 

[asnavale]

Hi asnavale

My question from me to you would be : What would improve, if you would have such a file ?

Would you make better trades or what ?

There are already hounder t and thousand of indicators around and still, traders do not trade better.
...
...
...
As I do not know exactly what you trade, I just gave some inside look at how I organize my self. I know that I am some times a little bit harsh ( Every body has his behavior and that is my one ) so I guess you got used to it in the mean time.
...
...
...

I am clear about this now for ever :

THERE IS NO PERFECT INDICATOR !
...
...
...

Have a nice Saturday

Dan

Hi Dan,

The post following this reply explains what I look for with these charts.

I trade only in stocks, only delivery based. Trying to understand futures trading.

The line you wrote in CAPITALS perfectly describes the imperfections in any system discovered or invented so far. If we had a perfect indicator (The Holy Grail) we would not be discussing anything here.

Thanks for a very informative, thought provoking and interesting post.

-Anant

 

[asnavale]

Hi,

The AFL is given below. It is a very short and simple code. It is complete in itself. So, you should not drag-and-drop it on a chart. It should be inserted as a new chart. This can be done by double clicking the name of the AFL or by right-clicking and selecting 'Insert'.

The beauty of this AFL is that it can draw both Support and Resistance curves without changing any parameter. Depending on the starting point selected it draws the appropriate curve.

Some of you might have identified what these S/R curves are. Yes, They are MIDAS Support-Resistance curves. I have taken the code from the net and modified as per my requirements. MIDAS is an acronym for "Market Interpretation Data Analysis System".

As you all know drawing Support-Resistance lines requires for each chart finding the points through which the lines should pass and joining them. Similarly, this AFL also requires you to define the point from where the curve should be drawn.



// ================== MIDAS S/R LINES ==================

SetChartOptions(0, chartShowDates | chartWrapTitle);

_N(Title = StrFormat("{{NAME}} ({{INTERVAL}}) {{DATE}} - {{OHLCX}}; Avg.Price=%1.2f\n{{VALUES}}", (H + L) / 2));

Color[1] = colorBrown;
Color[2] = colorTurquoise;
Color[3] = colorPink;
Color[4] = colorLightBlue;
Color[5] = colorRed;
Color[6] = colorBrightGreen;

Plot( (H + L) / 2, "", colorGrey50, styleLine | styleThick);

for(i = 1; i <= 6; i++)
{
startdate = ParamDate("Starting Date " + i, "2000-01-01");
start = DateNum() < startdate;
mp = (H+L)/2;
pv = V * mp;
denominator = Cum(V) - ValueWhen(start, Cum(V));
numerator = Cum(pv) - ValueWhen(start, Cum(pv));
midas = IIf(BarsSince(start), numerator/denominator, Null);
Plot(midas, "SR" + i, Color, styleLine | styleNoRescale);
}

// =============== END OF MIDAS S/R LINES ===============




HOW TO USE THIS AFL:

As I mentioned above, plot the chart by double-clicking the AFL name or inserting it as a new chart. When the chart is inserted only a zigzag curve appears. It is price chart but not in the form of OHLC bars or candles. It is average price i.e. Mean of High and Low. To draw and interpret I use the following method. You can innovate and experiment any other method and if you get more useful technique please post it here.

I use this AFL on daily charts (EOD charts). I will explain its implementation with the example of NIFTY chart with the corresponding chart images included.

First, change the timeframe to weekly so that about 2 to 3 years data is visible.

In the weekly chart identify the lowest price and note the date. In the nifty weekly chart this point is 13-March-2009. Right click on the chart and parameters menu appears with six dates as options. Set the first date to this Lowest price date(13-3-2009). A curve appears starting from that point. This curve is the primary support curve and it runs below the price line and the troughs in the price line appear almost at similar distance above this primary support curve. Some times the troughs may touch this line or go a little below it and bounce back. Visually identify the point after which the troughs in the price line start appearing farther. In NIFTY chart this point is at 28-5-2010. From that point again start another curve by right-clicking and entering the date. Draw one more line like this which starts at 3-9-2010 and we have three levels of support. As the present status is up trend (the price is well above the primary support) we will not worry about the primary support line. We are interested in the latest part of the chart. Therefore, we will consider the last two curves in daily charts and refine them further.

The second line started an 28-5-2010 on weekly chart. On daily chart this date will slightly vary. Now change the chart to daily time frame and adjust the zoom level such that the whole chart starting from May 2010 is fully visible. Now we see that the support curves are not starting from the correct low price points. The correct starting points are 26-5-2010 and 31-8-2010. So, right click the chart to open parameters menu and click the 'Reset all' button. The curves disappear. Enter the correct starting dates for the first and second curves (26-5-2010 and 31-8-2010) to plot the support curves. We see that in daily chart there is another point from where the second support and price deviate more. This is on 30-9-2010. So, draw the third support line from this point.

To plot resistance curves follow the same procedure but instead of troughs in price use the price peaks. The price will be below the resistance curves.


INTERPRETATION

The primary support curve drawn on weekly chart has shown that NIFTY is in up trend even now. This information is useful in assessing the long term trend.

The second and third curves also show that NIFTY is still in up trend even in short term.

In the Daily chart the first two curves are well below the price and therefore the up trend is intact.

The interesting part is now in the third curve which started from 30-9-2010. The price has just crossed below the support. This indicates ending of the latest trend and beginning of opposite trend. But as the cross-over has just now taken place we will not jump to the conclusion that NIFTY is going to fall. The price we used is average of high and low (This is common practice for plotting MIDAS curves). Therefore, it does not represent the true price. Any other price (Open, Close, Low, High) also will not represent the true price. So, there is some imperfection in the price and therefore, there can be some imperfection in the cross-over. It is quite commonly observed in MIDAS S/R curves that some times the cross-over (above or below) is temporary and reverses after a couple of days. If it continues to fall then the next step to watch is the breach of next support. As there is still uncertainty in the trend reversal we can only become alert and watch carefully and use other indicators also to confirm. In the charts posted here there is OBV plotted in the upper part. Inspecting that also shows that OBV is also showing down movement but is still not very much low. If the OBV moves further down then the down trend is going to start. Overall we may say "Be Alert. NIFTY is likely to fall". Future will tell us whether this conclusion is correct.

The interpretation of Resistance curves is also similar. I will post an example of this separately.

The implementation and interpretations are as per my understanding of the system. Some of you may be able to give a better view and are welcome to do so. It will help me understand more and learn.

The theory, implementation, interpretation and possibilities of MIDAS curves are quite interesting. I can post a write-up on it for those who are interested. But I am not sure whether it fits into this thread. I posted the MIDAS S/R curves here in response to the query by crown and reply by Rajputz.

Your views and comments are welcome.

-Anant

 

[oilman5]

role of indicator in delivery based trading
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
1]why we take delivery.........because long haul will give better risk adjusted return.
2] higher timeframe is showing strong uptrend bias.
3]our aim is always buy in temporary fall , to catch better long term trend continuation.
.............
Indicator mostly give confidence to a trader..........a trader is nomore slave of indicator.........if he/she can read price properly.......what is expected to happen.
i]MA in weekly chart solve pt2
ii]support pt reversal buy solve pt1
3rd factor reqd some judgement + lower timeframe exhausion dimination.......apart from some fundamental clarification know ur stock.
...................so this normal use of them.
but u may use indicator.........as preliminary scanner.........for some timesaving device.
most imp use of indicator research...........is not indicator itself, but time spent on research.........so their uselessness and clarity of pure price study + amalgamation of various time frame picturesque...........
No doubt........support, MA , Fib,reversal bar, any momentum tool to understand reversal at bottom ...........i found them with some use.
................
views r personal and it takes more than 10 yr to reach this view

 

[asnavale]

Hi,

As I had said in the earlier post I am presenting here a case of resistance curves. I am using the chart of ACC shown below. This chart with MIDAS S/R curves illustrates not only the role of Midas curves but also few other points which I will describe in this write-up.

The price of ACC has been on the decline since March 2010. In a declining phase the Resistance curves play an important role. We draw resistance curves from peaks in the price chart. The first peak is at 10-3-2010 from where we draw the first resistance line. Just right-click the chart and enter this date in parameters. The resistance curve is automatically drawn. Similarly, we draw two more resistance curves starting from 8-4-2010 and 24-6-2010. The price has dropped till 15-7-2010 and started moving up. In July it has tried to break out of the resistance line twice and finally succeeded in overcoming the resistance in August. Then onwards it has broken out of each resistance curve one-by-one. When the price went above the resistance for the first time we draw a support line from a low on (15-7-2010) which occurred before the cross-over. As the price moved up, this support also followed the price. From 31-8-2010 onwards the price increased its speed and started deviating more from the support. So, we draw another support curve from 31-8-2010 and later one more from 1-10-2010. Now the price is moving towards the last support curve and if it crosses below then we will see another price fall. This is also in line with the observation we made in NIFTY earlier. So, be alert to witness a possible fall.

A few other points can be noted in this chart:

1. In end of July when the price had attempted to break out of resistance and failed, it did not fall further but bounced back from the support curve drawn from 15-7-2010.
   
2. When the breakout occurred above the resistance curve drawn from 8-4-2010 (The red colored line) the price has taken support of the same line twice (See the circled area). This is an illustration of Resistance becoming support after a breakout.
   
3. After the final breakout above all of the Resistance curves (September onwards) the three resistance curves started merging together and mingled with the support curve drawn from 15-7-2010. What we conclude from this is that the resistance curves are no more required and we can focus on the support curve only.

The MIDAS S/R curves help us in understanding the market condition and take a proper decision. They will not give us entry points and exit points but alert us if we are approaching a situation where we can time our entry or exit properly.

-Anant

 

[subu]

thanks
subbuuuuuuuuuuuuuuuuuu

 

[KonalGondal]

Hi,

As I had said in the earlier post I am presenting here a case of resistance curves....................
-Anant

Sir ,

The post is Amazing .

The Content, Facts and the presentation is simply superb.

Regards
KG

 

[hawaisanjay]

Anant Sir...In amibroker these midas S/R lines drawn for one scrip remains same for other scrip.To draw them for other scrip again you have to reset the dates again and start from begining.Is it true or I am doing some mistake?