My Swing Trading :3 Indicator Method

[joy_verma]

hi huineng,
close below lowest low ? stochastic values range b/w
0 and 100.
vinay

 

[rpc]

Hi Joy
Thanks for explaining stop loss.Now I have understood it.
I have another question. In your first post you have said
"I dont buy if this setup
fails to give me buy signal howsoever attractive that scrip might be. In that
event I search for next scrip." How do you search next scrip.There are thousands of scrips
How do find which scrip is about to meet the 3 conditions.
Thank you
with best wishes
rp

 

[joy_verma]

hi rpc,
This is a continuous process and I keep doing my home work daily.
Though people write small programmes as well but I not only do swingtrading but also position trade where you search for different setups
So, I search my setups manually and select most appropriate trade where
risk-reward ratio is clearly in your favour. One more thing ,after a potential position
trade is spotted I move up one time frame ,say from daily to weekly
to cross check if the weekly trend is up or not. In case of swing trading I look differently at them
but assess the over all short term market direction by employing my elliottwave analysis.
Regards,
vinay

 

[rpc]

Hi Joy
Seems requires a lot of work.But then earning money is never easy.Can you throw some light on how you asses risk-reward ratio.Hope I am not bothering you.
Thanks

 

[joy_verma]

hi,
true. lot of hard work . that's why trading is most difficuilt job.there are
many methods to assess the risk /reward . but I keep my things simple.
you know markets are strongest after a fall and weakest after a sharp
rise. I look for wave 2 base and wave 4 base(of broader market) to enter. because risk/reward is in favour of reward at that point .(just for example).
Regards
vinay

 

[huineng]

Dear Vinay,
I got the point. The mistake I was doing was, calculating the previous 14 days and comparing with today's close. I must include today also as the last of the 14th day for the calculations. Thank you for the timely help. Much appreciate.
Now I have one more question: Today, due to the scam report many stocks fell to unbelievable levels. Won't this low price dilute the stochastic sensitivity for the next 5 days atleast?. Thank you in advance for your time, energy and guidance.

 

[joy_verma]

hi huineng,
Indicators have their own merits and demerits, that's why we
combine them to generate buy sell signals. I am not an expert
on stochastic you may search forum or web to go deeper into
the mechanics of stochastic but the whole idea was to give
traders a swing trading method that I use.
Regards,
vinay

 

[huineng]

Thank you Vinay. I like your method. I will give it a try.

 

[trader31339]

Hi,
For the past few days I have been seeing much controversy on forum about technical analysis . My opinion is that if you have your home work
done, if you have confidence in yourself ,if you are diciplined, if you want
to learn and succeed, You will develop your own methods and setups and
execute them in your plan and then trade your plans. This way you will
not rely on anyone Ashwani Gujaral Or anybody else.(I respect Ashwani as
he is successful and disciplined trader)
One of the hot scrip on forum has
been PBA infra structure. I am Taking up this scrip for My Actual Method
for swing Trade. I have simple method and I call it "3 indicator method".
On the day when sensex went down to 11008, PBA infrastructure Made
a low of 154 and a high of 167. I spotted this scrip on my chart and
saw my setup giving a buy signal. some people would wait to buy it
above 167 the last bar high but in that case my stoploss would be little
far away at 154 and as I am bit agressive I decided to buy it at nextday
at market opening.
Next, I analysed my 3 indicator method. It is a simple
method comprising slow stochastic, RSI, And MACD. I keep settings for
stochastic as 5,3,3 for Rsi 9 and for MACD 5,34,5.
Notice on PBA infrastructure that stochastic gave the first buy signal RSI
gave second signal and Macd final confirmatory signal. the same is applied
to sell the scrip when a sell signal is generated. I dont buy if this setup
fails to give me buy signal howsoever attractive that scrip might be. In that
event I search for next scrip. See the attched chart it gave me perfect
settings to buy and I placed a buy order the next day at market open
My buy order was executed at 160.25 with a stop at 154 which is just Rs. 6
below 160. Had I bought above 167 my stop would have been Rs. 13 away
from 154.
Now in four days time the stock is up more than Rs. 20 and none
of the Indicators have reached over bought region indicating that there is
still much distance to be covered by the scrip on the up side.
So this is my simple swing trading technique. In conclusion, if you do
your home work properly and trade your technique you do not need the
Famed technical experts to rely upon.
So, this is my "3 indicator method for you". I am pretty certain that many
of you will have your own methods and setups.
Regards,
vinay

Dear Joy Verma,
Thanks for such a wonderful set up,many days ago I requested forum members to share their setups so that others can benefit from it.True, in trading for long term sucess we need setups.

Joy, I have few doubt regrading your 3 indictaor setup.Signals of the stoch and macd are clearly visible on screen but how do we come to know RSI has given a buy or sell signal? please tell.

I am using metastock, any member of the forum can help me how to feed the following values for macd? 5 34 5, when ever I edit macd in metastock there are only 2 values so stucked!!!

Joy at last ,I request you to share your other such wonderful setups also with forum.All forum members will benefit from it.Thanks once again for your setup, do tell me abt RSI signals

 

[joy_verma]

hi trader31339,
you can experiment with different period for RSI. As far as
interpretation of indicators are concerned wrt buy sell signals you will have
to learn them in detail as threre is no shortcut to trading success.
for 5,34,5 macd visit this link
http://www.paritech.com/education/technical/custom/indicators/default.asp

as far as my other setups are concerned , I use mostly Dr. elders tripple
screen method for position trading, pattern breakouts, and also flags
for swingtrading. My best tool to trade other markets (commodities) and indices (futures) is elliottwave analysis.
I think, it is not correct to say that many setups will make a successful trader. The idea is to get one method and trade it sucessfully. There are
people who trade only one pattern (say flags) or one indiator (say macd )
and make fortunes. there are people who trade only trendlines and make
millions, there are also people who trade only moving averages to make their
analysis as objective as they can. On the filip side there are people who
become jack of all trades and master of none and commit harakiri in the
financial market and in their trading. So get a method whatever it is and
satisfy yourself that it is the best and trade it successfully. one more thing
people who are good in analysis are not neccessrily good traders and good
traders are not good mentors neccessarily either.
hope this works for you and others .
with best to your trading,
Regards,
vinay