Trading Strategies Using Technical Analysis

[SwingKing]

Rajesh,

Stock Selection - Don't get too caught in top down analysis or bottom up analysis in markets. Analyzing sector and its performance is important for Investments. Not for Swing trades. Let me give you an example.

DLF belongs to Realty sector. It has underperformed markets both as a stock and as an index constituent. Realty sector has been the worst performer in the market. Yet, I have extracted majority of my swing trades through DLF. If you go back a few pages, you would see that I shorted DLF at 348 and covered once at 310. I again went short at 318 and covered at 269. Recently I went long on DLF at 274 and have covered positions at 315. Now, what has sector got to do with my trades here? The answer is absolutely nothing.

Hence, if you want to Swing trade, stick with High Beta stocks. DLF,Hindalco, Tata Steel, Rel Cap are god's gift to Swing traders. Hope you get it.

As far as getting Beta data is concerned, most of the charting softwares give you that. Amibroker and Metastock do that. I don't know about the rest. You can manually calculate Beta too. Just seek more information regarding it on Investopedia.com

Tc

 

[SwingKing]

Raunak bhai,

wanted to ask a newbie question..

am currently using MACD indicator and RSI oscillator..

should I use fast stochs or slow stochs along with these..

which one do you recommend , for swing trades in particular..

Thanks..

Dear Prst,

If you are comfortable trading with indicators, then MACD and RSI would serve your purpose fruitfully. Don't use too many indicators. You can use MACD to identify broad trend and RSI to identify overbought/oversold regions. Try and work your way with these indicators. Try and find out how they react at different situations. In short, whatever tools you use, just master them.

Tc

 

[SwingKing]

Raunak Bhai,

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

Jagan,

Your posts always keep me busy. You always have follow up questions which is a very good habit. That is why when you disappeared in between, I could feel my work being cut out.

Now coming back to your query.

At what speed do you drive? If I gift you a car tomorrow on a condition that you will never drive below 100 mph, will you accept that gift? If not, then why not? Let me give you the answer.

You have pre programmed your mind to not indulge into any activity which could be life threatening. Hence once this offer is made to you, your mind will completely refuse to accept this in order to protect you from threat.

Same goes out for Trading. Taking profits early is the worst thing professionals can ever do. Its equivalent to putting your life at risk. It is just that your brain does not think of this in this manner. Hence, you will need to program your brain to respond to early profit booking as a sign of something which should never be done. Once you can do that, you will never book profits early. I know your next question is how to do this. Hence, let me tell you that for each trader this is different. Some can implement this from the very next day, whereas some cannot for years to come. In the end it boils down to self control and determination.

Tc

 

[jagankris]

Raunak bhai,

wanted to ask a newbie question..

am currently using MACD indicator and RSI oscillator..

should I use fast stochs or slow stochs along with these..

which one do you recommend , for swing trades in particular..

Thanks..

I am not an user of Stoch.
But once I heard from some one that Mr.Subhdeep Nandhi recommends 31,3,3 for Stochs for Swing trades.

 

[Prashant Patel]

Raunakbhai,
I tried to use TA, but can't get throught.
Is there any simple indicators that I must you first?

 

[jagankris]

Jagan,

Your posts always keep me busy.
That is why when you disappeared in between, I could feel my work being cut out.

Now coming back to your query.

I know your next question is how to do this.
In the end it boils down to self control and determination.

Tc

Dear Raunak bhai,

I will not disappear with out telling for the good of all Trader ji friends so that Raunak Bhai will keep on writing for us

Early profits - life threatening and boils down to self control and determination.

Yes Master will not book early profits from "Now" on.

Thanks a ton as usual.

Best Regards,
JK

 

[preethi21]

I am doing day trading with 5000 rs , when ever i get time i do day trading.

my day trading example latest December 3 2010
profit 586 rs/ using5000 rs

Uploaded with ImageShack.us

 

[CASPER]

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.



Tc

Dear Raunak,

Thanks for the detailed explanation on Hindalco , I am curious to know why you mentioned adding of additional position after price crosses 220 ?. Is it because it is the current swing high .

When i look at the chart of hindalco i notice that on 22nd OCT the closing price is 222.35 , should we not be adding positions after the price crosses this value ?.

Thanks for your reply,

Best Wishes,
Nithin

.
http://img88.imageshack.us/i/35159481.jpg/

 

[preethi21]

My day trading with 5000 rs capital/
Latest example date dec 3 2010
2 winners in row Total profit 586 rs

Uploaded with ImageShack.us

 

[vmonu]

Hello Raunak

When analysing charts, what should be the ideal time-frame that we should use?
Suppose i am analysing Daily Charts on EOD basis as on 03-Dec-2010, what should be the time-frame (in months or weeks) to look back? How much data should be used for analysing?

Does it depend on whether we are Swing Trading, Positional Trading or making Investment? If so, can you tell me the time-frame in each case?

Also, can you tell me how much data should be interpreted in case we analyse charts on weekly or monthly basis?