Thoughts on Day/Swing Trading

[Satyen]

They say that trend is your friend but that statement needs a qualification that it is your friend as long as it is not about to end.......how does one know that the trend is strong ?

I use following critaria to judge how strong the trend is...and when it is about to give explosive move. The technique I follow is based on Trends knowledge from William McLaren and also from Saint....All credit to them, I just apply that knowledge to the markets....

See those magenta colour lines on the chart ? Those are the lines showing gaps in the earlier top and the reaction bottom after breaking the tops....these gaps show that the trend is strong and about to blow off.. .... After such gaps the trend accelerates.....you can see that on any chart, any time frame......if coupled with other techniques, it gives great confidence to hold the positions, add and wait till the trend is about to end.....

Smart_trade
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Thanks Sir ........

 

[Satyen]

Please Continue With These type of Ideas ........

 

[Raghavacc]

Smart_trade

Humbly noticed a masterpiece taught by the master...

 

[HHPPREMM]

Respected Seniors,Can u plz explain me hw 2 find gs gaps?.I saw d charts bt m a bit confused.Secondly cn u tll me wr i cn find info abt swing trading system in this vast sea of knowledge i.e. Traderji.com.Pls guide me .Thaks in advance.

 

[rajputz]

A little querry. What do you refer to gap here. I know about a normal gap down or gap up....but what gap in the images posted above.

 

[Smart_trade]

A little querry. What do you refer to gap here. I know about a normal gap down or gap up....but what gap in the images posted above.

Referring to the gap between the Pivot high market breaks to the upside and the Pivot low or reaction low after the high is broken. If there is no such gap and market breaks the top,and reacts and gets into the top it broke...that trend is called a creeping trend which is weak and as a general rule indicates that market is near its reversal ( there are certain exceptions though....)

In a strong trend which is about to accelerate you will see such gaps...

Please see the chart I posted...there I have shown 2 such gaps .....

This is different concept from normal opening gap which we normally refer to as gap.

Smart_trade

 

[Agardas]

Referring to the gap between the Pivot high market breaks to the upside and the Pivot low or reaction low after the high is broken. If there is no such gap and market breaks the top,and reacts and gets into the top it broke...that trend is called a creeping trend which is weak and as a general rule indicates that market is near its reversal ( there are certain exceptions though....)

In a strong trend which is about to accelerate you will see such gaps...

Please see the chart I posted...there I have shown 2 such gaps .....

This is different concept from normal opening gap which we normally refer to as gap.

Smart_trade

Its new type of Gap , i have learnt today.. thanks smart trade

 

[ashwani chadha]

The entire trading is based on two very important concepts.....1) Reward/Risk ratio or R/R and 2) Money Management ( MM )or Position sizing. Both these concepts are more important than which of our trade is successful and which is not.

I read a book called " Mathematics of Money Management " by Ralph Vince. This is one of the three finest books on MM by the author and some of the concepts in that book opened my eyes to what trading really is... I am giving below a small excercise from this book to stress a point that in final results, which of your trade made money and which lost money makes NO difference at all.....

THE POSITION SIZING AND MM GAME

Make 40 small pieces of paper,on 20 write SUCCESS and on 20 write "FAIL" and fold them and put them in a glass bowl. Then ask a small child in the family to pick up each slip from the bowl and you read whether success or fail.

The sttarting capital is Rs 1,00,000/- and At each trade you will risk 25 % of the capital. If the trade is success,you make double the amount of money risked on a trade and if it is failure,you loose the amount risked on that trade. So for first trade your cum equity balance is Rs 1,00,000/- and the amount risked is 25000/- so if the slip says success,you make 25000*2 =50,000/- and your cum equity is 1,50,000/- now and on next trade you bet 25 % of 1,50,000/-. so go on like this till 40 trades are over.

The final amount you will have is not dependent on the sequence of your winning/loosing trades,consecutuve looses,wins etc and final amount is over Rs 10,50,000/- Dont believe me ? Try it out. I have spent 3 hrs on this game early in my career and tried coin toss,various sequence of alternate win/loss,10 losses and 10 wins in sequence etcBut the final wealth is same not even a rupee more or rupee less.

What does this prove ? Have a competent system,backtest,have a good mm and trade with confidence. Your sequence of losses and gains make no difference in ultimate results of building your wealth as long as your method has a positive expectancy and edge. Hope you enjoyed the game and learnt something from it..About expectancy, we will discuss later...

I am no way advocating risking 25% on every trade. This is just illustration because optimal f for this system is 25 %. But 25 % is way tooo high. Start with 1-2 % and put your profits to work for you.


Smart_trade

as for as mm is concerned, i never thought like this,this is a new concept for me, i will practically check with 40 pece of papers on sunday it self,but i am very thank full for this beauti full thought,after practical i will discuss it with you and will try to get some more knowledge from you, which you may have but i still dont ,once again thanks

 

[DanPickUp]

##which you may have##

Yes, I guess, he will have. :lol::lol:

 

[Raghavacc]

##which you may have##

Yes, I guess, he will have. :lol::lol:

I was looking to get a real example on "Reading between the lines and reading within a line!!! ",I got it here :lol:

Dan keep your humours coming in.Its a healthy mental tonic.