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

[RSI]

Hi amit,

I am unable to upload my post as a single message. Hence I am splitting it in to two and uploading it

 

[RSI]

My concern right now is: Now that stocks are in a confirmed downtrend, what do Traders do? Will these concepts readily apply to other markets like commodities or forex?

Kindly advice.

Amit.

Hi amit,

Problem with many of us is that we can trade only in raising bull market. Add to that is the ever raising bull market since we had 2003. But the trouble arises when we are not provided with this sort of bull market. But please note market trading in a range requires different tactics. Similarly, markets trend downwards (like the one we have now) also requires different trading tactics. What most of us try to do is to apply the same tactics which were hethreto being applied to raging bull market. That is where one is caught on the wrong foot. Understand this difference. Then you will have no problem in making proper trades. If you had applied techniques that are suitable for down trending market, then you would have earned huge profit.

 

[RSI]

However, if you cannot change the trading tactics, then the perfectly legitimate option would be to sit out and wait for the opportunity. You will have to be patient. If you loose patience here (as many of us have lost), you will end up buying in a market which spiralling downwards only to raise level of pain and anxiety lateron.

Hope this helps
Thanks and regards
R. S. Iyer

 

[Saint]

However, if you cannot change the trading tactics, then the perfectly legitimate option would be to sit out and wait for the opportunity. You will have to be patient. If you loose patience here (as many of us have lost), you will end up buying in a market which spiralling downwards only to raise level of pain and anxiety lateron.

Hope this helps
Thanks and regards
R. S. Iyer

Nice,RSI.......

Saint

 

[Prabhjeet]

Hello Saint,

I was watching the Educomp chart where you had taught the buy set up on weekly charts. I have observed same kind of set up on ONMOBILE charts, but my poor mind has some doubts:-

1. The Pivot high of 655 has not been cleared though we have a higher pivot high, so do we take the trade or wait for 655 to be taken out.

2. Secondly if i wait for 655 to be taken out the stop would be at pivot low of 455, so the risk/reward ratio may be highly scewed and the target would have to be atleast 1255 for risk/reward of 1/3, is it advisable to take such high risk or can i take a position at clearing of last week top at 515 and stoploss at 455 pivot

Regards

 

[djsinha]

Hello Saint,

I was watching the Educomp chart where you had taught the buy set up on weekly charts. I have observed same kind of set up on ONMOBILE charts, but my poor mind has some doubts:-

1. The Pivot high of 655 has not been cleared though we have a higher pivot high, so do we take the trade or wait for 655 to be taken out.

2. Secondly if i wait for 655 to be taken out the stop would be at pivot low of 455, so the risk/reward ratio may be highly scewed and the target would have to be atleast 1255 for risk/reward of 1/3, is it advisable to take such high risk or can i take a position at clearing of last week top at 515 and stoploss at 455 pivot

Regards

Prabhjeetrana, we have a higher pivot low only. We'll acc to our system, wait for the pivot high of 652 to be overtaken. We place our trade above 652 with stoploss of 455. Don't enter now. Let it take out it's prev pivot high of 652.....only then can we confirm that it's in a uptrend.

Comming to your 2nd question, When we enter at 652, 455 will be our stoploss. Acc to MM rules, total amt u buy will be
(x% of total money u want to trade)/(buy price - stoploss).
where, x = allowable risk percentage u want to bear.
That's it. We don't consider target while trading. We only try to manage risk. And let our profits fly.

Saint will be in a position to give u better view.
(I've attached chart of onmobile).

Cheers
djsinha

 

[RSI]

Hello Saint,

I was watching the Educomp chart where you had taught the buy set up on weekly charts. I have observed same kind of set up on ONMOBILE charts, but my poor mind has some doubts:-

1. The Pivot high of 655 has not been cleared though we have a higher pivot high, so do we take the trade or wait for 655 to be taken out.

2. Secondly if i wait for 655 to be taken out the stop would be at pivot low of 455, so the risk/reward ratio may be highly scewed and the target would have to be atleast 1255 for risk/reward of 1/3, is it advisable to take such high risk or can i take a position at clearing of last week top at 515 and stoploss at 455 pivot

Regards

Dear prabhjeetrana,

Your question is directed towards Saint. But I am poking my nose uninvited. Understanding is that Saint will pardon me for that. He is very generous. I know it very well.

I am not offending you nor shall I ever try to do so. You seem to be excited to take the trade. That is my guess. Excitement is the last thing in trading. Keep it aside and think logically before taking the trade. If you are taking the trade then you must wait for the completion of the candle. In the chart posted by you, the weekly candle. Otherwise, you are anticipating that weekly close is going to be higher that last week's low. But can you anticipate such a close? If you are an experienced trader and if you can read the chart very well, no problem. Otherwise, please make it a habit not to trade on weekly chart, that too on the last weekly candle before the closure of week. What are your plans if it were to close below the low of the last week candle? How does the picture look in such a case? You will have an outside bar having greatly negative implications.

I donot know whether you have done multitimeframe analysis and then decided to take the trade. If that is the case, then you must be taking trade on daily chart or intraday chart by looking at the weekly chart, not the otherway round.

Of couse, I have left the final decision to Saint. If he disagrees with my views, I am open to all criticisms. I could not resist myself after seeing the chart posted by you.
Thanks and regards
R. S. Iyer

 

[lvgandhi]

Prabhjeetrana, we have a higher pivot low only. We'll acc to our system, wait for the pivot high of 652 to be overtaken. We place our trade above 652 with stoploss of 455. Don't enter now. Let it take out it's prev pivot high of 652.....only then can we confirm that it's in a uptrend.

Comming to your 2nd question, When we enter at 652, 455 will be our stoploss. Acc to MM rules, total amt u buy will be
(x% of total money u want to trade)/(buy price - stoploss).
where, x = allowable risk percentage u want to bear.
That's it. We don't consider target while trading. We only try to manage risk. And let our profits fly.

Saint will be in a position to give u better view.
(I've attached chart of onmobile).

Cheers
djsinha

On 11/3/2008, there is pivot high at 588.9. Am I correct or not. If I am correct, then we should wait for that.

 

[Satyen]

Dear prabhjeetrana,

Your question is directed towards Saint. But I am poking my nose uninvited. Understanding is that Saint will pardon me for that. He is very generous. I know it very well.

I am not offending you nor shall I ever try to do so. You seem to be excited to take the trade. That is my guess. Excitement is the last thing in trading. Keep it aside and think logically before taking the trade. If you are taking the trade then you must wait for the completion of the candle. In the chart posted by you, the weekly candle. Otherwise, you are anticipating that weekly close is going to be higher that last week's low. But can you anticipate such a close? If you are an experienced trader and if you can read the chart very well, no problem. Otherwise, please make it a habit not to trade on weekly chart, that too on the last weekly candle before the closure of week. What are your plans if it were to close below the low of the last week candle? How does the picture look in such a case? You will have an outside bar having greatly negative implications.

I donot know whether you have done multitimeframe analysis and then decided to take the trade. If that is the case, then you must be taking trade on daily chart or intraday chart by looking at the weekly chart, not the otherway round.

Of couse, I have left the final decision to Saint. If he disagrees with my views, I am open to all criticisms. I could not resist myself after seeing the chart posted by you.
Thanks and regards
R. S. Iyer

Hi

RSI ... my veiw please comment

according to Saints method we take two time frame into consideration like if we want to trade daily we take weekly chart as guidance .... in this case if prabhjeetrana want to trade in weekly chart then he has to wait for weekly close, again before that we should have monthly trend in upward direction if we want to take a long call on weekly chart but iin this case i can get data only from feb ... may be new company listed in that month

so in my veiw dont we have too litle data as we can not say whether we are in monthly uptrend or not ?

please correct me if i m wrong

waiting reply

Regards
Satya

 

[Prabhjeet]

Dj Sinha and RSI, both your comments are welcome.As pointed out rightly by you RSI i am excited about the trade and there is a good reason. Although I am not as experienced as many of my trader friends here but whatever Technical analysis I have learnt tells me to buy because as far as I am concerned the bottom for this year is firmly in place at 4450 nifty levels and any dips will be buying opportunity.

I am sure Saint would like me to wait for Pivot to be taken out at 655 levels but then the qquestion of Risk/Reward remains