Trading Strategies Using Technical Analysis
- Thread starter SwingKing
- Start date
- Tags trading strategies
Jagan My Dear,
Good question.
The key to finding one's psychological make up is to measure one's pulse rate.
Its as simple as that. If you put a day trade, and your pulse rate increases to a point where you lose your rationality, then day trades are not for you. Similarly, if this happens in Swing trades, then next thing to explore would be Investment horizon trades.
When I day trade, I have found that I cannot be relaxed. This is the first indication that day trading is not for me. The second thing which I would like to highlight is the ability to tolerate pain (in terms of losing money). I can tolerate immense pain in Swing trades, but I cannot do the same for Day trades. Hence, in a nutshell, two things which will tell you your psychological profile are; Pulse rate and Ability to tolerate Pain
Hope this helps.
Tc
Good question.
The key to finding one's psychological make up is to measure one's pulse rate.
Its as simple as that. If you put a day trade, and your pulse rate increases to a point where you lose your rationality, then day trades are not for you. Similarly, if this happens in Swing trades, then next thing to explore would be Investment horizon trades.
When I day trade, I have found that I cannot be relaxed. This is the first indication that day trading is not for me. The second thing which I would like to highlight is the ability to tolerate pain (in terms of losing money). I can tolerate immense pain in Swing trades, but I cannot do the same for Day trades. Hence, in a nutshell, two things which will tell you your psychological profile are; Pulse rate and Ability to tolerate Pain
Hope this helps.
Tc
Jagan My Dear,
Good question.
The key to finding one's psychological make up is to measure one's pulse rate.
Its as simple as that. If you put a day trade, and your pulse rate increases to a point where you lose your rationality, then day trades are not for you. Similarly, if this happens in Swing trades, then next thing to explore would be Investment horizon trades.
When I day trade, I have found that I cannot be relaxed. This is the first indication that day trading is not for me. The second thing which I would like to highlight is the ability to tolerate pain (in terms of losing money). I can tolerate immense pain in Swing trades, but I cannot do the same for Day trades. Hence, in a nutshell, two things which will tell you your psychological profile are; Pulse rate and Ability to tolerate Pain
Hope this helps.
Tc
Good question.
The key to finding one's psychological make up is to measure one's pulse rate.
Its as simple as that. If you put a day trade, and your pulse rate increases to a point where you lose your rationality, then day trades are not for you. Similarly, if this happens in Swing trades, then next thing to explore would be Investment horizon trades.
When I day trade, I have found that I cannot be relaxed. This is the first indication that day trading is not for me. The second thing which I would like to highlight is the ability to tolerate pain (in terms of losing money). I can tolerate immense pain in Swing trades, but I cannot do the same for Day trades. Hence, in a nutshell, two things which will tell you your psychological profile are; Pulse rate and Ability to tolerate Pain
Hope this helps.
Tc
Itsmemad,
I would personally not be in Bhel as of now. Let more days pass, then I would review it again.
If you are looking to be in the same Industry (Engineering - Heavy), then I would recommend something like a TIL to you. With a stop of 660, you can be long in it. Its currently at 698, so you can wait for it to correct a bit or you can invest some right away. That's completely your call.
One more stock which is reasonably fine in this same Industry is Windsor Machines. It is low on volumes hence be careful with it. With a stop of 82, once can be long.
In the end, there is no stock which you can invest and forget for 2-3 years, hence if you invest in any of these, keep me posted. We will review them again and again. Even if we take some loss, we will recover everything.
Tc
I would personally not be in Bhel as of now. Let more days pass, then I would review it again.
If you are looking to be in the same Industry (Engineering - Heavy), then I would recommend something like a TIL to you. With a stop of 660, you can be long in it. Its currently at 698, so you can wait for it to correct a bit or you can invest some right away. That's completely your call.
One more stock which is reasonably fine in this same Industry is Windsor Machines. It is low on volumes hence be careful with it. With a stop of 82, once can be long.
In the end, there is no stock which you can invest and forget for 2-3 years, hence if you invest in any of these, keep me posted. We will review them again and again. Even if we take some loss, we will recover everything.
Tc
Rajesh,
Your analysis is well in place. Good work. Let me analyze the same counter for decision making. Ultimately, our main aim is to take a decision which is profitable. Historic analysis has to be done in such a way which gives us some edge for making decisions. Let's take Hindalco as an Example.
Remember, the price legend analysis is only a way to find what the stock has been doing till now. It is not something which can give much insight in future. Now, see how I am looking at Hindalco. I will consider price (primary analysis) and indicators (secondary analysis) while doing so.
Hindalco
1. Lows - I have marked important Swing lows on the counter (A - E). From points A-D, Hindalco has never broken a major Swing low on EOD basis. This tells us that the stock is in an uptrend. It is only in this recent correction has the Stock broken below its Swing low (D). The new Swing low now is (E). Now you must be thinking, if the counter has broken the Swing low (D), then why am I long on this stock? Here's the Reason.
Whenever a major Swing low is breached on EOD basis, that Swing low becomes a major hurdle for the stock. That is for Hindalco, point D was a major hurdle when it broke it in November. Within 2 days, the stock crossed (D) on the upside with a Wide range candle indicating Bullishness. This is the point where I went long. Now that the stock has formed a high at 220, we are watching for two levels (210-212) and 200. The former is half of the entire swing move (from 195-220) and the latter is the previous Swing low (D) below which the stock would turn bearish again.
2. Price Analysis - According to Price Analysis Legend, all the moves which are marked in Red arrows have retraced somewhere between 0-38% and 38% to 46%, these moves have indicated that the stock is in uptrend. It is only the recent move, highlighted in Blue where the stock has retraced the entire move. If you see the counter retracement of the recent Bearish move, you will find that prices have already retraced nearly 68% of the move towards upside. This shows us that even the most immediate bearish trend is Weakly Bearish. Hence, the immediate price trend is bearish. This is precisely why stops are very tight. But because previous price structure over period of 1 year have been Bullish, we will still look to go long.
3. Weekly Trend - On the Weekly chart, the most recent retracement has completed at 38.2%. Recent week's High was greater than previous week's high and recent week's low was greater than previous week's low. Hence on weekly chart the Price structure is extremely Bullish. On daily frame hence, we will always be looking to go Long.
4. MACD and Momentum - Just for supplementary analysis, we can see that Momentum is positive on Weekly frame and MACD is still in Bullish shape. Though it seems as if it will cross, but till that happens, we will assume for the trend to be up.
5. Decision - Buy
Immediate Daily trend - Weakly Bearish
Weekly Trend - Bullish
Weekly Indicator - Bullish
Overall shape of Nifty - Bullish
Stop Loss - Zone of 200-202 & 210-212
Current Swing High - 220
Position Add - Above 220
Hope this helps Rajesh. Good work by you as well. Make it more structured as I have explained here.
@VJAY - My dear, reply to you is pending. Will do it post lunch.
Tc
Your analysis is well in place. Good work. Let me analyze the same counter for decision making. Ultimately, our main aim is to take a decision which is profitable. Historic analysis has to be done in such a way which gives us some edge for making decisions. Let's take Hindalco as an Example.
Remember, the price legend analysis is only a way to find what the stock has been doing till now. It is not something which can give much insight in future. Now, see how I am looking at Hindalco. I will consider price (primary analysis) and indicators (secondary analysis) while doing so.
Hindalco
1. Lows - I have marked important Swing lows on the counter (A - E). From points A-D, Hindalco has never broken a major Swing low on EOD basis. This tells us that the stock is in an uptrend. It is only in this recent correction has the Stock broken below its Swing low (D). The new Swing low now is (E). Now you must be thinking, if the counter has broken the Swing low (D), then why am I long on this stock? Here's the Reason.
Whenever a major Swing low is breached on EOD basis, that Swing low becomes a major hurdle for the stock. That is for Hindalco, point D was a major hurdle when it broke it in November. Within 2 days, the stock crossed (D) on the upside with a Wide range candle indicating Bullishness. This is the point where I went long. Now that the stock has formed a high at 220, we are watching for two levels (210-212) and 200. The former is half of the entire swing move (from 195-220) and the latter is the previous Swing low (D) below which the stock would turn bearish again.
2. Price Analysis - According to Price Analysis Legend, all the moves which are marked in Red arrows have retraced somewhere between 0-38% and 38% to 46%, these moves have indicated that the stock is in uptrend. It is only the recent move, highlighted in Blue where the stock has retraced the entire move. If you see the counter retracement of the recent Bearish move, you will find that prices have already retraced nearly 68% of the move towards upside. This shows us that even the most immediate bearish trend is Weakly Bearish. Hence, the immediate price trend is bearish. This is precisely why stops are very tight. But because previous price structure over period of 1 year have been Bullish, we will still look to go long.
3. Weekly Trend - On the Weekly chart, the most recent retracement has completed at 38.2%. Recent week's High was greater than previous week's high and recent week's low was greater than previous week's low. Hence on weekly chart the Price structure is extremely Bullish. On daily frame hence, we will always be looking to go Long.
4. MACD and Momentum - Just for supplementary analysis, we can see that Momentum is positive on Weekly frame and MACD is still in Bullish shape. Though it seems as if it will cross, but till that happens, we will assume for the trend to be up.
5. Decision - Buy
Immediate Daily trend - Weakly Bearish
Weekly Trend - Bullish
Weekly Indicator - Bullish
Overall shape of Nifty - Bullish
Stop Loss - Zone of 200-202 & 210-212
Current Swing High - 220
Position Add - Above 220
Hope this helps Rajesh. Good work by you as well. Make it more structured as I have explained here.
@VJAY - My dear, reply to you is pending. Will do it post lunch.
Tc
Hope this helps Rajesh. Good work by you as well. Make it more structured as I have explained here.
@VJAY - My dear, reply to you is pending. Will do it post lunch.
Tc[/QUOTE]
Dear Raunak,
Thanks for detailed explanation, making picture more vivid & definitely this will give my analysis new dimensions.
Let me interpret ate by your explanation, first historical analysis will give us the clear picture , how the particular script had performed so far, & their characteristic in conjunction with broader sector & market. Here now we know that overall Hindalco is in up move , & its due to correction stock has fallen with broader market , so now market is showing sign of strength, this stock is again showing sign of bullishness on longer time frame, even stock is weakly bearish on daily chart we can go long
Also we can use the last swing low & difference between current swing low & high as immediate stop loss.here I have one question, how to use HV here?
One more question regarding stock selection for swing trade, as per you in general you select high beta stock so here also we would select sector which has performed better in line with market & in that sector best performing stocks. & reverse when market is in downturn.
Where can we get Beta data for last whole year or so ?
I will try to analyse few stock on regular basis on more structured basis & post it here for you to make it more better.
Thanks again for all this help.
Regards
Rajesh
@VJAY - My dear, reply to you is pending. Will do it post lunch.
Tc[/QUOTE]
Dear Raunak,
Thanks for detailed explanation, making picture more vivid & definitely this will give my analysis new dimensions.
Let me interpret ate by your explanation, first historical analysis will give us the clear picture , how the particular script had performed so far, & their characteristic in conjunction with broader sector & market. Here now we know that overall Hindalco is in up move , & its due to correction stock has fallen with broader market , so now market is showing sign of strength, this stock is again showing sign of bullishness on longer time frame, even stock is weakly bearish on daily chart we can go long
Also we can use the last swing low & difference between current swing low & high as immediate stop loss.here I have one question, how to use HV here?
One more question regarding stock selection for swing trade, as per you in general you select high beta stock so here also we would select sector which has performed better in line with market & in that sector best performing stocks. & reverse when market is in downturn.
Where can we get Beta data for last whole year or so ?
I will try to analyse few stock on regular basis on more structured basis & post it here for you to make it more better.
Thanks again for all this help.
Regards
Rajesh
Jagan My Dear,
The key to finding one's psychological make up is to measure one's pulse rate.
Tc
The key to finding one's psychological make up is to measure one's pulse rate.
Tc
Thanks a ton
To add on to this one more question.
Why people sit and wait in the loosing position more time till it breaks their nerves but book profits soon ?
I am one of this kind though I have corrected the 1st mistake still I am struggling to break the second habit :annoyed: - booking early profits.
How to counter the anxiety or temptation when sitting in profits till the target.
Please give a detailed explanation on this.
Also please write about auto suggestion while trading.
Best regards,
JK
Similar threads
-
-
Trading the S/R Flip - Strategies around this widely used concept
- Started by ASB
- Replies: 4
-
I am tradingview paid user and want to use their strategies for algo trading
- Started by curiousv
- Replies: 9
-
-