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

[Saint]

Have a look at Tech Mahindra charts below.....or any for that matter as of now.

Tech Mahindra was in a Downtrend,lower pivot highs and lows......then a week back,a break above that previous pivot high,and then sideways consolidation.........and then a breakout.The Daily is now in an Uptrend.

Have a look at the Weekly Charts......still very much in a strong downtrend,all lower pivot highs and lows.

Do we trade or do we keep away?

Intraday Trader :There's always a trade

60min trader:Nice trade,you are going to be long until you get a pivot break in the 60min charts.

Swing trader: Daily chart breakout,you are in long.You are nervous as you know that longer term charts are going to kick in sometime......but hey,why not make hay while the sun shines?Any previous pivot low crack,and you are out..........

Position trader:No trade....Still on vacation.


All the best!
Happy Trading!
Saint

 

[Saint]

Look at the WEEKLY for perspective if you are trying to trade the daily charts.........Entry is off the daily charts,exits are off the daily charts.

Taking the TECH MAHINDRA as an example,you bought the breakout from the consolidation,you are thrilled with yourself,it goes up even more.....and more.You are now convincing yourself that the bottom is in place,the numbers are good,the FM said something about the economy to your liking......In your mind,you have shifted from daily charts to super long charts.....You are thrilled with your buy,but you failed to realise that the weekly is still in a downtrend,and for it to get into an uptrend,it needs to do some grinding here and there.......When pivots crack on the daily ,you refuse to come out of the trade,......till a weekly chart declines takes your profits away....and then some more!!

So what did you do wrong?You entered a swing trade and then made it a position trade.............Cardinal Sin,you never change your time frame.....never,ever....ah,yes,one exception:You bought once previous pivot highs on the daily are taken out to the up........it was a swing trade.It then blasted off.....and you kept trailing stops....and then the previous pivot highs on the weekly get taken out as well,.......I'd still take profits off,but then and only then can you say that this trade which was meant as a swing trade has just become a position trade.

Other than that scenario...........respect that time frame that you are trading.

All the best!
Happy Trading!
Saint

 

[Saint]

It's not that we buy so long as weekly and daily are in line...........We want to buy that point when the weekly is in a decline in an uptrend and the daily is in a downtrend,and when pivots signal a change in that downtrend to an uptrend........we want to get in there.

Have a look at the chart of RelPetro........Please,please don't get in there!!!

Had a mail sometime back asking whether he could enter long or not as the Weekly and the Daily are in line.....just as Saint said so......Sigh!!

Knowledge is Power,my friends,but half knowledge can lead to great destruction....so careful!

Saint

 

[Saint]

Okay,one more popular doubt...

"Do I bring the stop loss to breakeven once I am in profits,and if so how much?"

Ans:Our job is to Go with the Flow,Ride the Trend..........so either trail stop to the low of 2 bars ago,or 3 as per your rules,or to the previous pivot low,or some other startegy that you have........there will come a time when the Stop Loss would reach Breakeven,or higher.

The trail stop is as per the charts.......not as per where we entered.Bringing stops to breakeven just because we are in some profits is not going with the trend,not going with the flow of the trade.....and cutting a trade short before it was allowed to reach its full potential.

Trade the Charts,..........Have a Plan and follow it!

All the best!
Happy Trading!
Saint

 

[veeru85]

Must be awarded as best thread of traderji.com.

Good starting done by Saint.

And after reading his Thread I have taken a resoultion that i will never look for Post or Any other site which says buy this or sell this.
What ever saint has said is Pure like a 24 carat Gold after all how many fish we can catch and eat some day it will effect our digestion like it did in Jan. 2008, Most of the trader has lost their money.

 

[rangarajan]

So,Saint,
when the up rally is not convincing,as & when pivot high is formed & negative reversal takes place,could we short.Yr previous analysis of Sail for me.

 

[rangarajan]

So,Saint,
when the up rally is not convincing,as & when pivot high is formed & negative reversal takes place,could we short.Yr previous analysis of Sail for me.

Saint,
I got the answer from yr discussion on the other thread on Reliance & Recap.
Thanks

 

[uasish]

Good starting done by Saint.

And after reading his Thread I have taken a resoultion that i will never look for Post or Any other site which says buy this or sell this.
What ever saint has said is Pure like a 24 carat Gold after all how many fish we can catch and eat some day it will effect our digestion like it did in Jan. 2008, Most of the trader has lost their money.

" Must be awarded as best thread of traderji.com."


That is the sole reason why he is our Teacher.He has shown a Simple method how to take out money from the mkt.

 

[anoopkumar]

Dear Saint,

How are you? I want to ask a basic question with respect to the chart attached by you for "ONMOBILE.Dly". How is the candle of Dt. 25-3-08 qualifying as most recent lower Pivot high? I am a lil embarrased to ask but since I find the candle that is formed on 26th having a higher high, I am littile confused. Pl. clarify. Thanx and regards!

-Anoop Kumar

 

[Saint]

Hi Anoop,

Yep.....not crossed yet,if it had crossed the previous pivot high(now it stands as 572.40 as of 26th),it's a BUY.

Saint