Learning to catch High Probability Breakouts

[manojborle]

 

[amitrandive]

Manoj

ADX principles you are using , are they from the book
ADXcellence: Power Trend Strategies by Charles B. Schaap ?

 

[timepass]

Looks like DLF got unbanned today.

 

[amitrandive]

Weekly chart of SRF 52 Week High-Low System

Two different systems giving same result.

Bottom Line :

1)Simplicity works !!!
2)Have meaningful and fruitful discussions with fellow traders

 

[sabhlok_r]

Thanks for sharing Manoj. Just to confirm if I have understood correctly, posting a weekly chart. The channel broke upward with DMI also moving in same direction. Only thing is that ADX is still below 25. Is this a valid breakout?

 

[monkeybusiness]

Stock to watch Infy, ADX bellow 25 since last 36 weekly candles.

 

[Tavnaz]

Honestly manoj if you had a million rupees on the line would you just trust the adx dmi line,on a multi weekly downtrend.
That is hindsight and nothing more.
If I were trading weeklies I would look for trends that form after the quarterly reports .
Obviously something big happened in the industry that cause such a huge trend I hardly feel missing a few points would be a big deal,so jumping in without confirmation is just mad.

I remember reading a something in disciplined trader by Mark Douglas, so the TA guy says to a big hot shot investor with no technical analysis background that support is a place where price is going to go up ,the TA guy marks a line and says yeah the so and so futures contract will bounce from this line,the big hotshot guy says to the T A guy this is ridiculous he calls up the guys working for him in the back office and tells him to sell say a x number of contracts in the market right now , market breaks the TA guys line and the investor says to him if I can do that so can the other big players in the market,point being when there is hard cash on the line you would not go blind putting orders based on some indi whose value is derived from the underlying ,hell I won't even trust the big price reaction from the lows. It ain't going up till it ain't.
We should trust only our eyes and ears and see what price is saying and also align fundies of the particular underlying

Post a chart which is currently showing the same indicator formation,and see if this works.
You have an engineering background right,you know the math,what is the formula for ADX now see the reason why dmi would be flat or top out.
Traders have become slaves to these mathematical formulations that derive from the underlying ,the first guys built these to ease their analysis but now people rather look at RSI oversold areas then watch for double top.
This is crazy.
Look you may have inadvertantly started a fever for indies.
Newbies are like children they always tend to overdo things that need to be in control.
They would rather seek emotional protection of the MACD then have to work their ass off to learn something that really matters.
Lazy is the right word for newbies.
In forums :
We can find system hoppers .
We can find the weak trading minds .
And what not.
They all seek temporary relief then go for permanent solution.

People would give half of their trading careers away not knowing that they don,t stand a chance of making money with indies.
In the end it is a real life underlying asset with solid fun dies and TA mixed with it that is going to move the price.
My solution to this dellima let price take out the last visual pivot in sight then perhaps make higher lows.
And I doubt retail investors would stick around for a big loss at particular level if that level isn't fundamentally important and price starts moving in their direction.
If I were buying xyz stock at say 50 rs I would have good reasons and stops too at say 40 rs.
If I don't see buying and some good PA supplement in my point of view, I would fold and consider re-entering at further lows with stops based on undrelying average monthly ranges.And I would be backed by solid fundies for the industry.if I you can't read fundamental reports so be it just watch the price and build a generic fundamental view for the entire sector .
I want to emphasise to the thread readers don't use hind sight,and always trust your own eyes 2 years spread on a weekly chart is too big a period to be gauged by indicators alone.
We must always look for good price bars in the direction of generic trend in the industry then enter and be ready for being wrong.
Better be safe then be sorry ,giving up 100 points in a 1000 pointer trend just to get confirmation ain't such a bad bargain.
Regards.

 

[Tavnaz]

Stock to watch Infy, ADX bellow 25 since last 36 weekly candles.

That is mighty big chart you have there.
But I am afraid it's blank .
Put some boxes and lines on it.and draw an out look for next 2 months.
That is a very good excercise to gain skill.
Plus it will show what is your current skill level.
Blank chart with just and indie on it is like .
I go to master chef and present a Tropicana juice pack and say chef this is fruit juice this is what I have to show for.
You catching my drift.
Regards.

 

[manojborle]

Honestly manoj if you had a million rupees on the line would you just trust the adx dmi line,on a multi weekly downtrend.
That is hindsight and nothing more.
If I were trading weeklies I would look for trends that form after the quarterly reports .
Obviously something big happened in the industry that cause such a huge trend I hardly feel missing a few points would be a big deal,so jumping in without confirmation is just mad.

I remember reading a something in disciplined trader by Mark Douglas, so the TA guy says to a big hot shot investor with no technical analysis background that support is a place where price is going to go up ,the TA guy marks a line and says yeah the so and so futures contract will bounce from this line,the big hotshot guy says to the T A guy this is ridiculous he calls up the guys working for him in the back office and tells him to sell say a x number of contracts in the market right now , market breaks the TA guys line and the investor says to him if I can do that so can the other big players in the market,point being when there is hard cash on the line you would not go blind putting orders based on some indi whose value is derived from the underlying ,hell I won't even trust the big price reaction from the lows. It ain't going up till it ain't.
We should trust only our eyes and ears and see what price is saying and also align fundies of the particular underlying

Post a chart which is currently showing the same indicator formation,and see if this works.
You have an engineering background right,you know the math,what is the formula for ADX now see the reason why dmi would be flat or top out.
Traders have become slaves to these mathematical formulations that derive from the underlying ,the first guys built these to ease their analysis but now people rather look at RSI oversold areas then watch for double top.
This is crazy.
Look you may have inadvertantly started a fever for indies.
Newbies are like children they always tend to overdo things that need to be in control.
They would rather seek emotional protection of the MACD then have to work their ass off to learn something that really matters.
Lazy is the right word for newbies.
In forums :
We can find system hoppers .
We can find the weak trading minds .
And what not.
They all seek temporary relief then go for permanent solution.

People would give half of their trading careers away not knowing that they don,t stand a chance of making money with indies.
In the end it is a real life underlying asset with solid fun dies and TA mixed with it that is going to move the price.
My solution to this dellima let price take out the last visual pivot in sight then perhaps make higher lows.
And I doubt retail investors would stick around for a big loss at particular level if that level isn't fundamentally important and price starts moving in their direction.
If I were buying xyz stock at say 50 rs I would have good reasons and stops too at say 40 rs.
If I don't see buying and some good PA supplement in my point of view, I would fold and consider re-entering at further lows with stops based on undrelying average monthly ranges.And I would be backed by solid fundies for the industry.if I you can't read fundamental reports so be it just watch the price and build a generic fundamental view for the entire sector .
I want to emphasise to the thread readers don't use hind sight,and always trust your own eyes 2 years spread on a weekly chart is too big a period to be gauged by indicators alone.
We must always look for good price bars in the direction of generic trend in the industry then enter and be ready for being wrong.
Better be safe then be sorry ,giving up 100 points in a 1000 pointer trend just to get confirmation ain't such a bad bargain.
Regards.

Thanks Tavnaz for your concern.
I am not asking anybody to blindly follow indicators, neither I do that.
However I have found my trading has changed dramatically just with having ADX on my chart.
I am able to interpret ADX now though not mastered it and will take time.

Off course If I have million rupees I am not going to bet it on single scrip.
Money management will always be there.
I wont hesitate to enter once my chart says to go long.

I dont want people here to follow indicators blindly and If they can read Price action they wont need it at all.

Anyways the method I have suggested is just to filter out potential breakout candidates.
Once candidate is found simple strategy of making entry after pull back to 20 ema is good enough.

P.S. Note that I am not a breakout trader and always enter on pullback after breakout.

 

[manojborle]

Manoj

ADX principles you are using , are they from the book
ADXcellence: Power Trend Strategies by Charles B. Schaap ?

yes Wilders and Schaap are major influence.
I keep on reading anything I find about ADX to improve my chart reading.