Trading Strategies Using Technical Analysis
- Thread starter SwingKing
- Start date
- Tags trading strategies
Apurv,
Here we go. I will explain one case to you. After that, you apply this to the second one. Then you can post it here and get it verified.
Clutch Auto:
Your Analysis:
On 13th As you said it formed a Long Candle. Then on 14th and 15th it formed 2 black candles plus the RSI part you mentioned. Hence as you said, you squared off your position to buy it later.
Where you went wrong:
Look at the big picture first. Now I am going to reply in point terms. Look at the chart while reading it.
1. Look where I have written point 1. I have marked it at a long white candle which was the swing high in mid June. Now, lets come back to the 13th July candle. What has this candle actually done? It has surpassed the previous swing high made almost 20 days back. This entire thing happened in one session. This in itself is a very bullish sign. If ever you would have entertained thoughts of selling, it would only be below the previous swing high. That is, below 70.
2. Now see where I have written 2. I have circled it at a place where you sold because of black candle piercing. In my honest opinion, that is not a piercing pattern. The black candle started above the 13th July candle, but did not penetrate enough to be verified as a piercing trade. Please remember, piercing pattern is valid only when the black candle, starts above a previous bullish candle and penetrates deep into the white candle (closes atleast below the half of white candle).
3. I haven't marked the point 3rd on the chart. THis is because this is more of a concept. Usually when you have a long white candle, the middle part of it becomes strong support. Till the price does not penetrate the mid point of the long candle, do not entertain any thoughts to sell.
4. Make use of moving averages for trend determination. Not for trading decisions. Think about this. Does market care which moving average you look at??
What you should actually do:
1. Always look at the intermediate swing high support
2. When using candlesticks, be sure to apply the concept properly. Everyone struggles, even I did, but once you understand what works and what does not, things are going to be much easier.
3. Always and always look at bigger picture before deciding to buy or sell.
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a buy on dip stock as of now.
Hope this helps.
Tc
Here we go. I will explain one case to you. After that, you apply this to the second one. Then you can post it here and get it verified.
Clutch Auto:
Your Analysis:
On 13th As you said it formed a Long Candle. Then on 14th and 15th it formed 2 black candles plus the RSI part you mentioned. Hence as you said, you squared off your position to buy it later.
Where you went wrong:
Look at the big picture first. Now I am going to reply in point terms. Look at the chart while reading it.
1. Look where I have written point 1. I have marked it at a long white candle which was the swing high in mid June. Now, lets come back to the 13th July candle. What has this candle actually done? It has surpassed the previous swing high made almost 20 days back. This entire thing happened in one session. This in itself is a very bullish sign. If ever you would have entertained thoughts of selling, it would only be below the previous swing high. That is, below 70.
2. Now see where I have written 2. I have circled it at a place where you sold because of black candle piercing. In my honest opinion, that is not a piercing pattern. The black candle started above the 13th July candle, but did not penetrate enough to be verified as a piercing trade. Please remember, piercing pattern is valid only when the black candle, starts above a previous bullish candle and penetrates deep into the white candle (closes atleast below the half of white candle).
3. I haven't marked the point 3rd on the chart. THis is because this is more of a concept. Usually when you have a long white candle, the middle part of it becomes strong support. Till the price does not penetrate the mid point of the long candle, do not entertain any thoughts to sell.
4. Make use of moving averages for trend determination. Not for trading decisions. Think about this. Does market care which moving average you look at??
What you should actually do:
1. Always look at the intermediate swing high support
2. When using candlesticks, be sure to apply the concept properly. Everyone struggles, even I did, but once you understand what works and what does not, things are going to be much easier.
3. Always and always look at bigger picture before deciding to buy or sell.
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a buy on dip stock as of now.
Hope this helps.
Tc
Apurv,
Here we go. I will explain one case to you. After that, you apply this to the second one. Then you can post it here and get it verified.
Clutch Auto:
Your Analysis:
On 13th As you said it formed a Long Candle. Then on 14th and 15th it formed 2 black candles plus the RSI part you mentioned. Hence as you said, you squared off your position to buy it later.
Where you went wrong:
Look at the big picture first. Now I am going to reply in point terms. Look at the chart while reading it.
1. Look where I have written point 1. I have marked it at a long white candle which was the swing high in mid June. Now, lets come back to the 13th July candle. What has this candle actually done? It has surpassed the previous swing high made almost 20 days back. This entire thing happened in one session. This in itself is a very bullish sign. If ever you would have entertained thoughts of selling, it would only be below the previous swing high. That is, below 70.
2. Now see where I have written 2. I have circled it at a place where you sold because of black candle piercing. In my honest opinion, that is not a piercing pattern. The black candle started above the 13th July candle, but did not penetrate enough to be verified as a piercing trade. Please remember, piercing pattern is valid only when the black candle, starts above a previous bullish candle and penetrates deep into the white candle (closes atleast below the half of white candle).
3. I haven't marked the point 3rd on the chart. THis is because this is more of a concept. Usually when you have a long white candle, the middle part of it becomes strong support. Till the price does not penetrate the mid point of the long candle, do not entertain any thoughts to sell.
4. Make use of moving averages for trend determination. Not for trading decisions. Think about this. Does market care which moving average you look at??
What you should actually do:
1. Always look at the intermediate swing high support
2. When using candlesticks, be sure to apply the concept properly. Everyone struggles, even I did, but once you understand what works and what does not, things are going to be much easier.
3. Always and always look at bigger picture before deciding to buy or sell.
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a buy on dip stock as of now.
Hope this helps.
Tc
Here we go. I will explain one case to you. After that, you apply this to the second one. Then you can post it here and get it verified.
Clutch Auto:
Your Analysis:
On 13th As you said it formed a Long Candle. Then on 14th and 15th it formed 2 black candles plus the RSI part you mentioned. Hence as you said, you squared off your position to buy it later.
Where you went wrong:
Look at the big picture first. Now I am going to reply in point terms. Look at the chart while reading it.
1. Look where I have written point 1. I have marked it at a long white candle which was the swing high in mid June. Now, lets come back to the 13th July candle. What has this candle actually done? It has surpassed the previous swing high made almost 20 days back. This entire thing happened in one session. This in itself is a very bullish sign. If ever you would have entertained thoughts of selling, it would only be below the previous swing high. That is, below 70.
2. Now see where I have written 2. I have circled it at a place where you sold because of black candle piercing. In my honest opinion, that is not a piercing pattern. The black candle started above the 13th July candle, but did not penetrate enough to be verified as a piercing trade. Please remember, piercing pattern is valid only when the black candle, starts above a previous bullish candle and penetrates deep into the white candle (closes atleast below the half of white candle).
3. I haven't marked the point 3rd on the chart. THis is because this is more of a concept. Usually when you have a long white candle, the middle part of it becomes strong support. Till the price does not penetrate the mid point of the long candle, do not entertain any thoughts to sell.
4. Make use of moving averages for trend determination. Not for trading decisions. Think about this. Does market care which moving average you look at??
What you should actually do:
1. Always look at the intermediate swing high support
2. When using candlesticks, be sure to apply the concept properly. Everyone struggles, even I did, but once you understand what works and what does not, things are going to be much easier.
3. Always and always look at bigger picture before deciding to buy or sell.
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a buy on dip stock as of now.
Hope this helps.
Tc
Now I realized what mistake I did on Clutch Auto as well as IFCI... I actually combined 2 days black candles and considered as piercing as first piercing was weak.... may b I got mind set for market moving down....
In fact, the level of 70 is break out level with strong white candle and then it is nice classic retracement to the break out level. It has resumed upward journey after tasting break out level... Kindly correct me if my interpretation is wrong...
If I m not mistaken, I made the same mistake in IFCI also... Rather than being impulsive and reaching to conclusion too early, I should have waited for a while and shud have looked at bigger chart... I think it is resuming upward journey after consolidating lil while after break out.... Kindly correct me if I m going wrong...
I appreciate your guidance Raunak, it means a lot to juniors like me...
Apurv
Last edited:
Apurv,
Even if 70 gets violated, you need to be looking for the next support. The first and foremost step is to check the price structure. For Clutch Auto this is extremely positive. In any case, with strong stocks you have to increase your holding period. The likely hood of ending up in profit is quite high.
Tc
Even if 70 gets violated, you need to be looking for the next support. The first and foremost step is to check the price structure. For Clutch Auto this is extremely positive. In any case, with strong stocks you have to increase your holding period. The likely hood of ending up in profit is quite high.
Tc
Thank you Raunak and SM for your guidance and I apologize for changing topic of discussion...
Please have a look on chart of Brandhouse Retails ltd... To me it is good buy at CMP with the stop loss of 40. It has completed TD sequential....
Kindly give ur opinion from regular analysis perspective....
Checklist:
Day prior to set up day 1 has to have close greater than close of four trading session earlier: Y
Set up
9 consecutive close less than close 4 trading days ago: Y
Set up Qualifier:
Ninth day's low less than 6th day's low: Y
Countdown
13 close less than/equal to low 2 trading days earlier: Y
Countdown qualifiers:
Close of day 8 of buy countdown less than close of day 5 of buy count down: Y
Close of day 8 of buy countdown less than close of day 3 of buy count down: Y
Close of day 13 is less than/equal to close of day 8: Y
Confirmation of entry
Price flip appear on day after 13 or before stop loss is triggered Y
Cancellation
An intraday high which is higher than the highest close in setup/countdown: N
An intraday high which is higher than the highest high in setup/countdown: N
Close higher than highest close: N
Close higher than highest high: N
Close higher than highest true high: N
Contradictory set up appeared: N
Please have a look on chart of Brandhouse Retails ltd... To me it is good buy at CMP with the stop loss of 40. It has completed TD sequential....
Kindly give ur opinion from regular analysis perspective....
Checklist:
Day prior to set up day 1 has to have close greater than close of four trading session earlier: Y
Set up
9 consecutive close less than close 4 trading days ago: Y
Set up Qualifier:
Ninth day's low less than 6th day's low: Y
Countdown
13 close less than/equal to low 2 trading days earlier: Y
Countdown qualifiers:
Close of day 8 of buy countdown less than close of day 5 of buy count down: Y
Close of day 8 of buy countdown less than close of day 3 of buy count down: Y
Close of day 13 is less than/equal to close of day 8: Y
Confirmation of entry
Price flip appear on day after 13 or before stop loss is triggered Y
Cancellation
An intraday high which is higher than the highest close in setup/countdown: N
An intraday high which is higher than the highest high in setup/countdown: N
Close higher than highest close: N
Close higher than highest high: N
Close higher than highest true high: N
Contradictory set up appeared: N
Last edited:
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