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

[Saint]

If the stock goes below the previous pivot low in any day then we should be out of the stock. We can always buy again when we see an uptrend.
Am i right saint. Plz correct me if i am wrong.
and please excuse me for answering in this post. i was just seeing whether i am right or wrong.

Great going,TeraHertz!

Saint

 

[Saint]

Hi Terahertz,

According to me if a stock goes below the previos pivot low in any day then it will not be an immediate sell signal. It will come on our watch radar but we would not sell it. A down trend would only be confirmed when it makes another pivot low. According to me confirmation of down trend is important. Ofcourse if the S/L is triggered before hand it would be a different issue.

Again just like you even I am relatively new and hence saint would be best suited to answer this question. But I would suggest that these interactions and application of mind is important as it will clear more doubts and teach us more. If again Saint agrees Looking forward to your view Saint.

Rgds
Rahul

Hi Rahul,

We get a downtrend once the previous pivot low is taken out and then we get a confirmation with a lower pivot high,and yes,as you mentioned goes on to take out that previous pivot low yet again.

But the trade that we are in currently is because of its uptrend.So long we make higher pivot lows and highs we are looking good.A question on its uptrend and we are out...........do not wait for a confirmation of downtrend.If the stock makes new highs,and then goes sideways,and that all important previous pivot low is not taken out,we are still in the trade.But that previous pivot low being taken out is an indication of a change in the present uptrend,and although we do not have confirmation of downtrend yet,we are out and looking elsewhere for more uptrends to capitalise on.

Happy Trading!
Saint

 

[Saint]

Yes, Rahul u are right but i thought the previous pivot low will be our stop loss. if thats not the case is there any other method to calculate stop loss.

Many methods actually to calculate stop loss,and we'll cover them in due time,but yes,your understanding so far about the prev pivot low being the stop loss is correct.

u are right. Such interactions would help us learn even more.

Always great......the more brainstorming and discussions there are,the simpler it becomes for the brain to grasp something as it looks at it from all angles.

Great going,Rahul/TeraHertz

Saint

 

[Saint]

Hello Sir,

I am a novice trader with due training in capital markets from BSE, also cleared NCFM and did MBA but i learned a lot from your posts hope u'll keep on blessing us with new material and your insight & guidelines. Your patience and promptness is too great.

Hats off to you....i'll follow your every message.

Gaurav

Hi Gaurav,

Thank you for your kind words........and do ask if anything is unclear.We can all help each other clear all our doubts so that when it comes to application of our knowledge,we'll have no problems.

Saint

 

[Saint]

Mr. Rahul it is true that when any stock breaks down below its uptrendline We cannot say surely whether this downtrend would continue or it will bounce back again. But one thing is sure is it is out of trend. Is it right to stay in such stock when we dont know the trend even if we know the downtrend is not confirmed.

Exactly TeraHz,as said above.

Great going!

Saint

 

[rahulg77]

Hi Saint,

Please clear something for me. We are in a uptrend and i am in the trade. Do I get out once the up trend line is broken or if it makes a lower pivot low. does this depend on our trading strategy. Cause if we wait it to make a lower pivot low or even go down as far the previos pivot we have lost our profits if we had entered the trade when it started moving up from the previos pivot low.Or is this the trade off we have to take in the market.

Also if we are in a down trend and it breaks above the trend line and moves up. Do we enter now and we let it make a higher pivot low. cause the higher pivot low might be very high and we loose out on profits. Also how much of a correction would u call a pivot. Could you please attach a file of the smallest correction you would consider a pivot.

For me i have seen that many times i have entered when a share has made a higher pivot low and then it moves up a bit and then makes a lower pivot low. is this common or am i not entering right.this could also be because at this time i am not using any indicator and only using trend line and once we use 1-2 indicators along with trend lines entries are more confirmed.

Sorry everyday i see a chart and a new question pops up. I hope i am not slowing down the entire thread. U could continue if you want.

Regards

Rahul

 

[Saint]

Hi Saint,

Please clear something for me. We are in a uptrend and i am in the trade. Do I get out once the up trend line is broken or if it makes a lower pivot low. does this depend on our trading strategy. Cause if we wait it to make a lower pivot low or even go down as far the previos pivot we have lost our profits if we had entered the trade when it started moving up from the previos pivot low.Or is this the trade off we have to take in the market

Hi Rahul,

As you rightly pointed out,depends on your strategy.If you've been playing the uptrendline all along,you are not about to tolerate any break in the uptrendlines.One crack and you are out........on the other hand,if you are willing to give it some room,wait for the break of the previous pivot low as that gives you a clearer idea of a change in trend.

Which one do you do?I personally would get out half my position on a trendline break,leaving my stops for the back half a bit below the previous pivot low.If taken out,I am out.

Just have a look at Satyam below.....I had been playing the trendlines all along.Had been in it from late Sept till date.That ugly move last Friday took out half my position,but still in back half as the previous pivot lows were not cracked yet.If you got out full on Friday,you would not have been wrong either.

Happy Trading!
Saint

 

[Saint]

Also if we are in a down trend and it breaks above the trend line and moves up. Do we enter now and we let it make a higher pivot low. cause the higher pivot low might be very high and we loose out on profits. Also how much of a correction would u call a pivot. Could you please attach a file of the smallest correction you would consider a pivot

Hi Rahul,

All great questions.........

Same as above.Buy the break above the dntrendline,but buy half.Why?Quite a lot of false breakouts.So buy half and then add the other half when we get a pullback forming a higher pivot low.

Happy Trading!
Saint

 

[Saint]

For me i have seen that many times i have entered when a share has made a higher pivot low and then it moves up a bit and then makes a lower pivot low. is this common or am i not entering right.this could also be because at this time i am not using any indicator and only using trend line and once we use 1-2 indicators along with trend lines entries are more confirmed.

Sorry everyday i see a chart and a new question pops up. I hope i am not slowing down the entire thread. U could continue if you want.

Regards

Rahul

Yes,Rahul,a higher pivot low doesn't mean we are going to see new highs.It could just turn around and continue its downtrend.Therefore the importance of stops.

And yes,as we put trendlines+support/res to moving averages,and patterns,and afew indicators and volume,.........then we get to drop a few of those that you might have taken now.

But whatever you do,however much you learn,it's important to keep things as simple as possible.

Saint

ps:And keep the questions coming,it is an indication of a learning mind,and your questions are an indication of a mind that wishes to learn for application,and not just for academics.Great going,Rahul!

 

[Saint]

Dear Saint

Quick question on identifying a pivot. To identify a pivot high, should both the below statements be true or only the 1st one needs to be true

1. high should be higher than the highs of the bars on either side
2. Low should be higher than the lows of the bars on either side

Same for Pivot low

Also does the extent of diff between the high/lows of the pivot bar and the adjoining bars have any significance

Also If pivot highs and lows are repeating quite often, does this mean that the script is not in a significant trend

Phew. that was a long list.. Hope its not a huge bother

thanks

Mohit

Hi Mohit,

A pivot is not exactly a point,and therefore it need not be one single bar with lower high bars on either side to qualify it as a pivot high.It could be 2-3 bars .Basically,whether pivot high or pivot low,don't go in for an exact academic definition.Go with the eye.

Taking that above chart of Piramyd Retail,we have pivot lows on Jan27th,Feb28th, and Mar24th.Notice that each pivot low is lower than the previous one.We call that a downtrend.So too with the uptrend.

Importantly,go with the eye.And what is not obvious to the eye is not worth it to put your money into.

Saint