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

[Saint]

There are some nice ones from Brett Steenbarger..........if you haven't read the below,do so.Another piece of trading wisdom.........

Saint

The Most Dangerous Word in the Trader's Vocabulary

I'm convinced the most dangerous word in the trader's vocabulary is "should". Should can turn a winning day into a psychological loser, when a trader focuses on that move he or she should have traded. Should can make us miserable when we don't live up to our personal or financial expectations. Sometimes we focus so much on how we should trade or on how others tell us we should trade that we drift away from our own talents and interests.

But those sabotages are nothing compared to getting locked into views of how the market should be trading:

* The dollar is plunging, so we should get inflation and the market should drop!

* The market is in an uptrend, so we should rally today!

* We're in a growing deficit as a country; we're mired in Iraq; oil prices are skyrocketing, so we should have a bear market!

I can tell you this: I became a better trader when I started focusing on what the majority of stocks were doing rather than on what I thought the market should do.

On Monday, I thought we should get a higher market on Tuesday. When I saw that fewer stocks were making new highs in the morning even as the ES was moving to new price highs, however, I dropped the should and sold the open.

And, yes, I--like so many participants in the financial markets--lament the high debt, weak dollar, and rising commodity prices. But we have recovered from a steep decline, dollar flows into stocks are above average, and--as of Monday--well over 2000 stocks had made fresh 20-day highs. No matter how much I think the market should go down, it's not what the market data have been telling us.

"Should" puts my judgment ahead of the market's objective reality. And that's why it's the most dangerous word in the trader's vocabulary.

 

[gandharvashu]

Hi Saint!

Well said.

I think the best expert is the market, it tells us and teaches us, and when we go wrong, it should make us wiser that why did we lose.

 

[gobatman2001]

Good evening Saint!

Hope you are keeping well.

Thanks a lot for the wonderful write ups.

Warm regards,
Batman

 

[gupta.deep]

Hi Saint,

I am posting my first chart analysis here. I would be greatful if you and other learned members may have a look and let me know if I am on the right path.

I have copied the daily and weekly charts of Reliance from icharts and drawn some trend lines. I have marked my observations along the charts to make them easy to read.

Basically, what my observations are that both daily and weekly are in uptrend, but daily has just started going up from a pull back while weekly is near its uptrend resistance line.

What does it all mean, can we go long in short term based on daily? To go long in Intermediate term, should we wait for weekly to pull back or we can do so now since daily is just recovering from pullback.

Little bit confused, I am.

Would appreciate if any of you can take some time out for me. Do it at your own leisure, though.

SKG

 

[Saint]

Hi Saint,

I am posting my first chart analysis here. I would be greatful if you and other learned members may have a look and let me know if I am on the right path.

I have copied the daily and weekly charts of Reliance from icharts and drawn some trend lines. I have marked my observations along the charts to make them easy to read.

Basically, what my observations are that both daily and weekly are in uptrend, but daily has just started going up from a pull back while weekly is near its uptrend resistance line.

What does it all mean, can we go long in short term based on daily? To go long in Intermediate term, should we wait for weekly to pull back or we can do so now since daily is just recovering from pullback.

Little bit confused, I am.

Would appreciate if any of you can take some time out for me. Do it at your own leisure, though.

SKG

A bit tied up right now.....shall definitely have a look at it in the evening.

All the best!
Saint

 

[ratan jain]

Tied up

Hmmmmm........ I prefer all this late at night

after the children go to sleep?

I would looove to be tied up at night too

 

[Saint]

Hi Saint,

I am posting my first chart analysis here. I would be greatful if you and other learned members may have a look and let me know if I am on the right path.

I have copied the daily and weekly charts of Reliance from icharts and drawn some trend lines. I have marked my observations along the charts to make them easy to read.

Basically, what my observations are that both daily and weekly are in uptrend, but daily has just started going up from a pull back while weekly is near its uptrend resistance line.

What does it all mean, can we go long in short term based on daily? To go long in Intermediate term, should we wait for weekly to pull back or we can do so now since daily is just recovering from pullback.

Little bit confused, I am.

Would appreciate if any of you can take some time out for me. Do it at your own leisure, though.

SKG

Hi SKG,

Let us just analyse these charts a bit.......

Weekly Charts:Reliance Inds is in an uptrend,short term ,intermediate and primary uptrend.Higher pivot highs and lows.But take a look at the gradient of the trendlines......reminds of the Bump and Run reversal soon.Therefore if you are planning an entry into RelInds for the long term or the medium term,now definitely is NOT the time.Why not?This latest trendline(the steep one) will not hold,this run-up may get steeper from here,but will not last a few weeks.Now with that info in hand,one does not get in if the long and medium term is the target.Instead,one allows the pullback to happen(a pullback that will hurt a lot of people) and enter when fear is maximum.If that pullback never takes place(sincerely doubt that!),then wait for a long sideways consolidation pattern before seeking an entry for the longer term.

Yes,there are negative divergences on the TRIX and possibly many other indicators........but following divergences blindly,and we might have lost this present run-up from 1300 to 1700.

Daily Charts:We are presently in a short term uptrend in RelInds....this move up may not last,but if you are a person who plays the 60min or daily charts,there is money to be made.

Summary :
1)Weekly uptrend and Daily is in a downtrend,buy on confirmation of the daily getting into an uptrend.

2)Weekly uptrend and the Daily in pullback territory to the trendline,you could buy the dips .....but beware of the gradient getting steeper.Once that happens,think short term.

[There is a difference between a stock making lower highs and lows .......a pullback to the trendline(as in your example) and a stock making lower pivot highs and lows on the daily but weekly still in an uptrend.]

All the best!
Saint

 

[Saint]

How u doing Saint? Gr8 to see u back. I returned after 1yr long break. Active slowly from last few months. I guess I reached 5th step because of the discipline trading, still 5 more to go

Learned lot of lessons from all of you and continue to learn as usual. Even my uncle is very busy now a days, no time for me.

Regards
Raj

Hi Raj,

Good to have you back at Traderji after a long hiatus.......Karthik's been busy with one project after another.Will return soon,I hope.

Good luck and all the best!

Saint

 

[Saint]

hi
saint still waiting for your posts . Now a days so much volatility in market if we make our entry using pivots in daily chart some times we find prevoius bars high is taken out in one day and the other day market moves down ......

so confused please giude how to trade using weekly and daily chart and deal with volatility

i cud not attach bharti daily chart as i have attach it in thread "my first analysis Gail " and forum did not allow to attach once more

Regards
Satya

Hi Satya,

Missed your post........hunting the chart down.Shall get back to you once found.

All the best!

Saint

 

[lvgandhi]

Dear Saint
Very nice explanation. I have learnt more. With your statement "following divergences blindly,and we might have lost this present run-up from 1300 to 1700.", I totally agree. But it will be helpful if you can explain how to use divergence, but at the same time don't loose runs like this.