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

[rkkarnani]

This thread is for the newcomer to charts and who has that desire to learn.It is for the student of the market by a student of the market.I am no master,no teacher,no expert,all words that I abhor........this thread is to my friends who want to learn,from a friend who is just sharing what little he knows.

All the best!
Saint

Is there a way to save the entire thread on ones PC/Laptop to view it OFF LINE?????
Regards.
-R.K.Karnani

 

[abhijit sen]

saint,
i have been religiously following your posts and have converted them into a hardbound book, to be consulted at least once a week..........after reading you, and also what traderji had to say, i came to the conclusion that cutting losses short and catching major portions of a trend are critical to long term sucess.
in this regard, can i request you to share with us your own methods of trailing stop..........do you add to your positions?

example of a profitable trade and how you managed it would be even more educative............


thanking you
abhijit sen

 

[Saint]

Will remember from now onwards,so you also use MS.

Always have,Asish...

Saint

 

[Saint]

saint,
i have been religiously following your posts and have converted them into a hardbound book, to be consulted at least once a week..........after reading you, and also what traderji had to say, i came to the conclusion that cutting losses short and catching major portions of a trend are critical to long term sucess.
in this regard, can i request you to share with us your own methods of trailing stop..........do you add to your positions?

example of a profitable trade and how you managed it would be even more educative............


thanking you
abhijit sen

Hi Abhijit,

Shall answer in a few days.......shall do so with an example.

Saint

 

[ranvir nehra]

thanks for your guidance, willing to learn

 

[shashank]

Hello Saint!
I hear the word - Negative Divergence- being talked abt by Seniors,how do we make it out by looking at charts?

Sorry for the raw newbie-type question

Shashank

 

[abhijit sen]

Hi Abhijit,

Shall answer in a few days.......shall do so with an example.

Saint

saint,

will be looking forward to your reply..............i have one more query and would like your kind attention..........

i would like to know about the importance of the overall market trend , and how you follow it..........



thanking you,
abhijit sen

 

[Saint]

saint,
i have been religiously following your posts and have converted them into a hardbound book, to be consulted at least once a week..........

after reading you, and also what traderji had to say, i came to the conclusion that cutting losses short and catching major portions of a trend are critical to long term sucess.

Yes,my friend....important to have a strategy and the persistence to stick to it.An exact point where you know for sure that this trade is not going the way you want it to,and to get out.A strategy to catch the most of the trend as possible.The adamant persistence to stick to plan.

in this regard, can i request you to share with us your own methods of trailing stop..........do you add to your positions?



example of a profitable trade and how you managed it would be even more educative............


thanking you
abhijit sen

Abhijit,this was a trade on the short side some months ago,ACC,tracked it for 2 months and then it gave this trade.

Charts attached below.......ACC got that sharp cut from the highs in Dec 2006.Missed the move down and then the bear-flaggish move making higher pivot highs and lows,but no where near the all time lows.Then we got that lower pivot high,and then a break of prev pivot lows.

We enter the trade short,the initial stop as mentioned.Then that sideways move,still stop loss at the initial stop level.Then it breaks below the next pivot low.Move stop to Trail stop 1.Then we get the next bar down.Move stop to the high of 2 bars back,viz Trail stop 2.Then we have two up days,but not able to take out Trail stop 2........we are still in the trade.Then another bar down.Since we saw new lows,now move the stop to Trail Stop 3.Next bar down after that,still at Trail stop 3.Now we get another bar down.......move trail stop to the high of 2 bars ago viz Trail stop 4.Another bar down,we move to Trail stop 5.Next we get a big up day.Keep trail stops where they are viz at 5.Now we get another bar down,move trail stop to Trail stop 6......why?Another lower pivot high.

Next an up day,Trail stop 6 is yet to be taken out.Then another big bar down and another bar down......now we move to Trail stop 7.Why?Newer lows.Next another bar down,but not newer lows,so we keep the Trail stop 7.Then a gap down and a move up.....still newer lows,and therefore we move the Trail stop to the high of 2 bars back....viz Trail Stop 8.Then we go sideways.....no more new lows,we keep the Trail stops at Trail stop 8.Then ACC makes a gap down and new lows......move Trail stop to Trail stop 9.Next bar down sees newer lows,move Trail stop to Trail stop 10.......next bar a gap down,we move trail stop to 11.Next day ACC takes us out of the trade at 732.

In this case,we got most of the meat of the trend.....sometimes we get taken out capturing probably half or maybe a third....sometimes we get to our initial stop the moment we put in a trade.All part of the market........importantly,our job is to detect changes in trend and once in,hold on to it.

All the best!
Happy Trading!
Saint

ps:Shall post about the adds on another day,using the same example.....Yawn!

 

[lvgandhi]

Yes,my friend....important to have a strategy and the persistence to stick to it.An exact point where you know for sure that this trade is not going the way you want it to,and to get out.A strategy to catch the most of the trend as possible.The adamant persistence to stick to plan.




Abhijit,this was a trade on the short side some months ago,ACC,tracked it for 2 months and then it gave this trade.

Charts attached below.......ACC got that sharp cut from the highs in Dec 2006.Missed the move down and then the bear-flaggish move making higher pivot highs and lows,but no where near the all time lows.Then we got that lower pivot high,and then a break of prev pivot lows.

We enter the trade short,the initial stop as mentioned.Then that sideways move,still stop loss at the initial stop level.Then it breaks below the next pivot low.Move stop to Trail stop 1.Then we get the next bar down.Move stop to the high of 2 bars back,viz Trail stop 2.Then we have two up days,but not able to take out Trail stop 2........we are still in the trade.Then another bar down.Since we saw new lows,now move the stop to Trail Stop 3.Next bar down after that,still at Trail stop 3.Now we get another bar down.......move trail stop to the high of 2 bars ago viz Trail stop 4.Another bar down,we move to Trail stop 5.Next we get a big up day.Keep trail stops where they are viz at 5.Now we get another bar down,move trail stop to Trail stop 6......why?Another lower pivot high.

Next an up day,Trail stop 6 is yet to be taken out.Then another big bar down and another bar down......now we move to Trail stop 7.Why?Newer lows.Next another bar down,but not newer lows,so we keep the Trail stop 7.Then a gap down and a move up.....still newer lows,and therefore we move the Trail stop to the high of 2 bars back....viz Trail Stop 8.Then we go sideways.....no more new lows,we keep the Trail stops at Trail stop 8.Then ACC makes a gap down and new lows......move Trail stop to Trail stop 9.Next bar down sees newer lows,move Trail stop to Trail stop 10.......next bar a gap down,we move trail stop to 11.Next day ACC takes us out of the trade at 732.

In this case,we got most of the meat of the trend.....sometimes we get taken out capturing probably half or maybe a third....sometimes we get to our initial stop the moment we put in a trade.All part of the market........importantly,our job is to detect changes in trend and once in,hold on to it.

All the best!
Happy Trading!
Saint

ps:Shall post about the adds on another day,using the same example.....Yawn!

Very Nice example for newcomers.
I have two doubts.
Between March 12-19, there is apivot low and pivot high. Any reason for ignoring that for trailing stop?
In delivary trade, shorting is not allowed as per my knowledge. Is it futures market? If so can the delivary trade charts can be used for futures?

 

[abhijit sen]

Yes,my friend....important to have a strategy and the persistence to stick to it.An exact point where you know for sure that this trade is not going the way you want it to,and to get out.A strategy to catch the most of the trend as possible.The adamant persistence to stick to plan.




Abhijit,this was a trade on the short side some months ago,ACC,tracked it for 2 months and then it gave this trade.

Charts attached below.......ACC got that sharp cut from the highs in Dec 2006.Missed the move down and then the bear-flaggish move making higher pivot highs and lows,but no where near the all time lows.Then we got that lower pivot high,and then a break of prev pivot lows.

We enter the trade short,the initial stop as mentioned.Then that sideways move,still stop loss at the initial stop level.Then it breaks below the next pivot low.Move stop to Trail stop 1.Then we get the next bar down.Move stop to the high of 2 bars back,viz Trail stop 2.Then we have two up days,but not able to take out Trail stop 2........we are still in the trade.Then another bar down.Since we saw new lows,now move the stop to Trail Stop 3.Next bar down after that,still at Trail stop 3.Now we get another bar down.......move trail stop to the high of 2 bars ago viz Trail stop 4.Another bar down,we move to Trail stop 5.Next we get a big up day.Keep trail stops where they are viz at 5.Now we get another bar down,move trail stop to Trail stop 6......why?Another lower pivot high.

Next an up day,Trail stop 6 is yet to be taken out.Then another big bar down and another bar down......now we move to Trail stop 7.Why?Newer lows.Next another bar down,but not newer lows,so we keep the Trail stop 7.Then a gap down and a move up.....still newer lows,and therefore we move the Trail stop to the high of 2 bars back....viz Trail Stop 8.Then we go sideways.....no more new lows,we keep the Trail stops at Trail stop 8.Then ACC makes a gap down and new lows......move Trail stop to Trail stop 9.Next bar down sees newer lows,move Trail stop to Trail stop 10.......next bar a gap down,we move trail stop to 11.Next day ACC takes us out of the trade at 732.

In this case,we got most of the meat of the trend.....sometimes we get taken out capturing probably half or maybe a third....sometimes we get to our initial stop the moment we put in a trade.All part of the market........importantly,our job is to detect changes in trend and once in,hold on to it.

All the best!
Happy Trading!
Saint

ps:Shall post about the adds on another day,using the same example.....Yawn!

saint,
as always, very lucid. i guess everyone has his own style of trailing stops depending on their risk appetite. will have to figure out whats best for me. please do also write about how you add to positions.

the ACC example you gave has created a further doubt for me and it relates to the other question i asked.........the impact of the overall market trend.........IN THE ACC TRADE YOU TOOK, IF I AM NOT WRONG, YOU WENT SHORT ON 13 FEB 2007. ON 13TH FEB, THE WEEKLY NIFTY CHARTS WERE SHOWING HIGHER PIVOT HIGHS AND LOWS. SO I GUESS THE INTERMEDIATE TERM UPTREND WAS STILL INTACT. SIMILARLY ON THE DAILY CHARTS, HIGHER PIVOT HIGHS AND LOWS WERE BEING FORMED, AND IT WAS NOT UNTIL 23 FEB 2007 THAT THE PREVIOUS PIVOT LOW WAS BROKEN.

INSPITE OF THE MARKET BEING IN A INTERMEDIATE TERM AND NEAR TERM UPTREND, YOU WENT AHEAD AND SHORTED ACC. DO YOU LOOK AT THE OVERALL MARKET DIRECTION? IF SO, WHAT DO YOU LOOK FOR IN THE BROAD MARKET?

I KNOW, I MIGHT BE HORRIBLY WRONG. PLEASE FEEL FREE TO POINT OUT WHAT I AM MISSING.

THANKING YOU,
ABHIJIT SEN