Thoughts on Day/Swing Trading Part 2

[Smart_trade]

Hello ST,
I am extremely sorry if burdening you much. I am not able to understand completely. Do you have any example charts for the above? Please post only when your time allows
Thanks
Bala

Hi Bala,

Dan has already posted good examples...give me some time, will try to post some more soon.

Good examples Dan....

Smart_trade

 

[DanPickUp]

Dear ST

I do not have any idea how many screen shots I made in my live about any trade or trading situation. But it counts when it comes to teaching and it counts when it comes to analyzing any wrong or good trade.

Here a chart where it is documented: Break out, short consolidation, break out, short consolidation and so on. As usual in P&F:

http://i49.tinypic.com/xqkqp1.jpg

And here a prove of what you say about that as it was not documented clearly in my last post: As against that if the market coming from long distance to the breakout point without sideways consolidation are suspect breakouts more likely to fail as market spends its bullish energy for travelling till the breakout point and after the breakout it has no energy left to carry the breakout through.

http://i50.tinypic.com/29616j6.png

It may is a bit confusing as it is P&F chart technique, but I am a bit of a freak on that. Guess you know that in the mean time. I also guess that you can save your time for the next question as this one is documented to its best.

Good trading

DanPickUp

 

[balasoft80]

Thanks DanPickup and ST.
Please look at the highlighted area in the chart. do you
mean this is the market traveled distance? For successful breakout we should have some consolidation near the breakout area correct?

Thanks
Bala

 

[rangarajan]

You can trade ranges on geometrical rectangles....try to sell as near as possible near the upper boundry and buy near the lower boundry. Keep stops if the market closes above /below the boundry. Never done any backtest but traded them many times.....they give good RR if the height of the rectangle is a good tradeable distance.

Smart_trade

Moderator can Delete the post if it is against Forum Rules,ie posting the name of Forum.

Trading with Geometrical pattern is well discussed in another Forum 'Traders Laboratory' under Gann thread by Mitsu with charts

 

[rangarajan]

Good breakouts are the ones where the market goes sideways just below the breakout, consolidates and breaks out with force and then never looks back.

As against that if the market coming from long distance to the breakout point without sideways consolidation are suspect breakouts more likely to fail as market spends its bullish energy for travelling till the breakout point and after the breakout it has no energy left to carry the breakout through.

Smart_trade

Dear Smart,
Really Excellent explanation.
I have seen this happening many times,but never understood the underlying Hidden agenda

Thanks.

I am reminded,'To get the Best answer from even the Best Teacher,Best Questions should be put' & Traderji is not lacking in it.

 

[friendforevers0007]

Moderator can Delete the post if it is against Forum Rules,ie posting the name of Forum.

Trading with Geometrical pattern is well discussed in another Forum 'Traders Laboratory' under Gann thread by Mitsu with charts

rangrajan please give me the link of thread

 

[rangarajan]

rangrajan please give me the link of thread

http://www.traderslaboratory.com/forums/technical-analysis/10788-beyond-gann-6.html

 

[rangarajan]

For Breakdown,is it a good Chart as explained by Smart?
Lot of consolidation before B/d.
Ofcourse Distance travelled is Not much before B/D,25pts only.
So,may Not be very exact.
Add to that Karthik's strategy of 'Trading with Previous day's ATP'
Result is All the way to the Bank with:rofl::thumb::clap:

 

[rangarajan]

Rejections and Failures

Rejections and failures of price breakouts are very important for alert traders as these set up very good trading opportunities in the opposite direction. So it pays to keep an eye on such breakout 'breakdown failures particularly if they come after sustained move earlier and when the market is near important support/ resistance levels.

Catching these reversals is extremely profitable as the traders trapped because of failed breakout/breakdown come to our help when they get out of their loosing positions in desparation and thereby lending us a helpful hand.....

Posted above is a Nifty Futures 5 min chart showing 3 breakout failures and 1 breakdown failure in last 2-3 days ,marked on the chart. These have caught the swing reversal points with great precision, and hence it pays to listen when the failures speak loud and clear.....and these are the kind of failures which will make alert traders successful ....

Smart_trade

Dear Smart,
Pl c the Marked portion of the chart.
There has been Lot of consolidation before B/O & still it has failed.
Pl discuss what is being missed.

 

[Smart_trade]

Dear Smart,
Pl c the Marked portion of the chart.
There has been Lot of consolidation before B/O & still it has failed.
Pl discuss what is being missed.

Clearly a tussle between bulls and bears going on. In the area marked the market has already taken an upmove, trying to break the pivots on extreme left hand side.It did a pivot low breakdown, but bears lost control....and bulls attempted pivot high breakout. When this action is happening at high point there is a possibility that smart money is distributing.....and again bulls could not gather enough strength and the market cracked.

Totally depends whether buying power is in control or selling power...in these situations one can get some clues but it is never 100 % sure and that is why a trader needs to be willing to reverse the position quickly.....if he gets attached to his analysis,opinions, views and positions and delays the reversal, he is dead.....this is a ruthless game....

Smart_trade