Teach A Man To Fish And.........

[Saint]

it is good wordings, pls let also know how to fish

Thanx......this whole thread is dedicated to that.If you mean fishing "fish",well this obviously not the right place for that.

Google it if learning it is a burning necessity.

Saint

 

[Saint]

Something on Money Management,if not read before.......was posted way back by TATrader,now sitting buried like many great threads.

http://www.traders.com/Reprints/PDF_reprints/TC_FINE.PDF

All the best!
Saint

 

[Saint]

Dear Sir,

I request you to spare some time from ur busy schedule to explain the criteria used for re-entry on around 23/24 OCT and around 12 th NOV in reference to Nifty daily chart dt 29th NOV attached by you.

Right.........we are trying to latch on to the trend as per the daily charts.We therefore use the weekly charts as reference.Looking at the weekly chart,what do we have?Higher pivot highs and lows signifying that the particular chart is in an uptrend.So what do we do then?We look to buy dips,pullbacks.......in short,we look at the weekly and we see the weekly in an uptrend,higher pivot highs and lows and all that.Then flip over to the daily chart,we see the daily chart in a downtrend but grinding its way out of it.As far as we are concerned,we remain passive.We do not jump in,anticipate,predict......we wait for some pivot to get taken out or form a new pivot low.Go back to that chart.The first time where you see Higher pivot low,that's the Buy point.......and then it's a Hold all the way till exit.The reentry points are places to add.......if we missed the initial buy,then these areas would be the places to get in.But do not forget......there is a point where the daily charts signified a change in direction.Here we are looking at pivot highs and lows.Once a previous pivot high is taken out,and preferably a higher pivot low as well,we are now angling for an entry to buy into this uptrend.Whether we got in or not,that's the BUY point of that chart........if we missed that point, we look for any dip to get in and ride the remaining trend.Here we are looking at each candle's high and low,merely taking the high out is enough for us.

So ,in summary, when we get a daily uptrend within a weekly uptrend,do not look for pivots to get in.If the chart gives you a pullback,the pullback hasn't violated any pivots,and we are still in a daily uptrend within a weekly uptrend,do a candle by candle analysis.As in the two examples cited by yourself,every candle has a lower high and lower low,.......the moment we get a candle that takes out the previous day's high,that's all we need.We jump in,wait and ride the trend once it takes off again.

Rest later,after the market.......hope I have not added to the confusion.If problems persist,get back to me.Important to clear the cobwebs....what is stated is just how I go about things,As you go along you'll find what works for you,as in an entry or exit point.But trend analysis,candle by candle analysis,pattern analysis,etc.....esp trend analysis whatever type of trader you are.

All the best!
Saint

 

[Saint]

Also, the stop loss for both the re-entry trade is not a conventional one ie cracking of previous pivot low. In first case, it seems to be low of 5 bars back and for second its low of 2 bar back. Also, there is a reference of crack of major pivot. what is the criteria for designating it as major pivot.

Now pull that chart out again,there are 3 places where we exitted.....one was marked as STOPPED,and the other two as OUT,basically means the same thing .......we trail stopped upwards and allowed the market to take us out.(Got a bit lazy by the latter part...)

Okay,back to topic...........there are two ways I get out of a trade.If you bring each and every indicator,that would be a million ways.Now,what is the rationale behind the 2 different types of exits?

Scenario A :We have a strong daily uptrend within a weekly uptrend,we have prices running far away from the moving averages,the gradient getting progressively steeper.........Basically,I put my stop at the low of 2 candles back so long as the next candle forms new highs.Therefore Day 1,2,3 we have higher highs and lows,therefore at the start of Day 4,stop would be slightly below the low of Day2.So if we have sideways move on Day 4,stop stays where it is.Day 5,another sideways day,so stop remains where it is.Now Day 6 we get a breakout to new highs......raise the stop to below Day 3.Day 7 we get higher highs and lows.Raise the stop to the lower of the lows of Day4 and 5,and then so on so forth.

Scenario B:Gradual gradient,mild pullbacks to the mov avg,and then off to new highs,keep raising stops to just below the previous pivot low.

The first two is Scenario A in action,the third is Scenario B.


All the best!
Saint

 

[anoopkumar]

Dear Sir,

I am gratified to get your replies. It will take a couple of readings with concerned chart ,by the side, to thoroughly grasp the finer aspects brought out by you. I marvel at the depth and breadth of your intellact and the pain that you take to clarify our doubts. My thanx from the core of my heart. I would definitely seek your opinions on couple of more points in respect of this chart to firmly nail the issue. I consider that present example epitomizes most of the concepts explained in this thread and need more time for deeper understanding.
Thanx so much and regards!

-Anoop Kumar,

 

[Saint]

The crieria for re-entry assumes significance because following daily chart has necessaited a couple of in and out trade whereas those following weekly may still be sitting tight with their trade because no weekly pivot seems to have been cracked for the similar duration in weekly chart. Thanx and regards!
-Anoop Kumar

Sorry about this answer coming in doses....


Yep,correct on the observation above.........if you were a longer time frame trader,you would still be holding through this sideways movement.Longer term charts are still very strongly bullish.The weekly chart pivot is some ways back......Your job is to sit tight during the pullbacks,and enjoy the ride when blast off occurs.

Which time frame you prefer to trade depends entirely upon the type of personality you are,..........or you could have them all,but make sure you stick to the rules of each type of trade.For example,you could be holding mutual funds and trading the longer term charts.You could be trading stocks on the daily stock time frame,and could be trading intradays with futures..........Importantly,set up a game plan for each time frame,and stick by it.If initially you find it difficult to manage many time frames,stick to one and only move on to more once you get the hang of multi-managing multiple time frame trades.

All the best!
Saint

 

[Saint]

Hi Saint,

Your words always fill in the confidence. Therefore, your reply does matter. And the way you presented it thru the chart was great.

Thanks indeed for that.

Now, one clarification I have is, when is going to be the reentry point? Since the market this time made a lower pivot high, may be a downtrend is in the offing. However, which of the following is the best reentry point:

1. Market breaks on the upside from the recent lower pivot high.
2. Market breaks on the upside from the previous major pivot low.
3. Market breaks on the upside from the previous major pivot high.

Just to be clear, I have attached the chart also.

Offcourse, only if weekly chart still is bullish.

What are the other possibilities.

Regards,
SKG

Hi SKG,

Option 3: Definite no........Your ongoing trade just confirmed that you were right.Probably could add,depending on how charts shape up at that time.But no way are we going to wait till then to put in that initial buy.

Option 2:Looks like a short below this area where you marked.........yes,so long as the particular stock stays above this point,we are in sideways mode.Staying above this point,but below the arrow mentioned as Option 1 means we do not put in a trade.We wait and watch.

Option 1:This is where I would look to reenter long provide it can take out that previous pivot high as mentioned in the chart.We got our low(where the Option 2 arrow is pointing),we now have a higher pivot low.But we don't know we have one till the stock/index goes above that previous pivot high as pointed by the Option 1 arrow.

So where we stand as per the chart attached by yourself is:If the index/stock dumps to below the Option 2 arrow,short with your stop loss at the pivot pointed by the Option 1 arrow.

If the index/stk goes above the pivot marked as Option 1,Buy with your stop at recent pivot lows.

If the index/stk does neither,sit on hands time.Sidelines.Wait and Watch.Entry only once the direction of the flow is clear cut...Our job is to assess the direction of the flow,and then to Go with the Flow.

All the best!
Saint

 

[munde_77]

Hi SKG,

Option 3: Definite no........Your ongoing trade just confirmed that you were right.Probably could add,depending on how charts shape up at that time.But no way are we going to wait till then to put in that initial buy.

Option 2:Looks like a short below this area where you marked.........yes,so long as the particular stock stays above this point,we are in sideways mode.Staying above this point,but below the arrow mentioned as Option 1 means we do not put in a trade.We wait and watch.

Option 1:This is where I would look to reenter long provide it can take out that previous pivot high as mentioned in the chart.We got our low(where the Option 2 arrow is pointing),we now have a higher pivot low.But we don't know we have one till the stock/index goes above that previous pivot high as pointed by the Option 1 arrow.

So where we stand as per the chart attached by yourself is:If the index/stock dumps to below the Option 2 arrow,short with your stop loss at the pivot pointed by the Option 1 arrow.

If the index/stk goes above the pivot marked as Option 1,Buy with your stop at recent pivot lows.

If the index/stk does neither,sit on hands time.Sidelines.Wait and Watch.Entry only once the direction of the flow is clear cut...Our job is to assess the direction of the flow,and then to Go with the Flow.

All the best!
Saint

Saint Sir . You are professional trader and guider . Your are Krishna of Traderji. I want to be Arjuna of Traderji . Just like Krishna of Mahabharat. Dont you sleep even at 12.30 m.Please excuse me for asking .

 

[Saint]

Dear Saint
I attaching daily and weekly charts of Nifty. I feel Nifty daily chart has made a higher pivot low on 28th nov and on 30th nov it has gone above the previous pivot high on 26th nov. Further Nifty weekly has a higher pivot low on 23rd nov compared to 26th Oct and thus continuing uptrend. with this can we say a new uptrend in nifty started or should we wait until next pivot high is made in weekly nifty compared to pivot high made on 2nd nov ie 6012?

Hi LVG,

Answer same as the previous post to SKG....Weekly uptrend,Daily breaking previous pivot lows and no further falls from there,now breaking above a previous pivot high on the daily(26th high).....we buy once it goes above that high.Above the high of 5981 and so on so forth would be adds to the initial trade that you are in already.

All the best!
Saint

 

[Saint]

Saint Sir . You are professional trader and guider . Your are Krishna of Traderji. I want to be Arjuna of Traderji . Just like Krishna of Mahabharat. Dont you sleep even at 12.30 m.Please excuse me for asking .

lol.....yeah,probably should.Over and out.

Saint