Trading Strategies Using Technical Analysis
- Thread starter SwingKing
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Bahut Badhiya SM bhai... but I think we have long way to go for world to follow us.. In my opinion, we are still not 10% of these developed economies that they follow us. We are still dependent on them. Example - IT, ITeS, Steel, Textiles, Contract Mfg in Pharma, Clinical Research, leather etc and many more are dependent industries on developed markets. We are not even strong enuf on our internal consumptions.
No offense, just my opinion.
No offense, just my opinion.
I am not surprised. I know many would not agree with me.
Also, the most difficult trades are short trades. If you short before everybody, market apparently takes you for a ride. If you are little late in shorting, you will be hesitant to short at lower level, because it would give a feel that market would bounce tomorrow. Anyway, it is market to decide what it has to do. We need to trade what we understand. If we are wrong, we have to accept it. Its a game of probability.
Happy Trading!
Also, the most difficult trades are short trades. If you short before everybody, market apparently takes you for a ride. If you are little late in shorting, you will be hesitant to short at lower level, because it would give a feel that market would bounce tomorrow. Anyway, it is market to decide what it has to do. We need to trade what we understand. If we are wrong, we have to accept it. Its a game of probability.
Happy Trading!
When we tend to compare different markets/assets and try to analyze what Nifty is doing, we usually do it the wrong way. I don't intend refuting anyone's belief but in my opinion, anything which is done wrongly cannot hold value.
The above mentioned analysis technique is referred to as Intermarket Analysis. Now in my opinion, this is single most important tool available to any market analyst. However, its results achieved can defer to a great extent when used inappropriately. Let me give an example on this. Everyone knows that if Dow is up 200, it is quite possible that we may end up in red next day or can even end up in green the other day. This works sometime and sometime it does not. But this way of using intermarket analysis is completely uncalled for.
When we measure correlation with an underlying asset, the period of standard deviation of results has to be such that error is minimized. This means that although day to day correlation between assets may not hold any value (as highlighted by SM), but long term correlation always holds very important information. This in fact is the correct way to analyze what is happening across the globe. Once we start reducing our time frame (that is, shift to day to day analysis) we are attracting more and more random noise in our decision making. Which for instance is any trader's worst nightmare.
Tc
The above mentioned analysis technique is referred to as Intermarket Analysis. Now in my opinion, this is single most important tool available to any market analyst. However, its results achieved can defer to a great extent when used inappropriately. Let me give an example on this. Everyone knows that if Dow is up 200, it is quite possible that we may end up in red next day or can even end up in green the other day. This works sometime and sometime it does not. But this way of using intermarket analysis is completely uncalled for.
When we measure correlation with an underlying asset, the period of standard deviation of results has to be such that error is minimized. This means that although day to day correlation between assets may not hold any value (as highlighted by SM), but long term correlation always holds very important information. This in fact is the correct way to analyze what is happening across the globe. Once we start reducing our time frame (that is, shift to day to day analysis) we are attracting more and more random noise in our decision making. Which for instance is any trader's worst nightmare.
Tc
In the same line, I try to do my analysis of bigger picture of our market based on our chart. Market follow simple thing most of the time (except certain big changes) and it always repeats itself someway or other. We do not really need to see Dow for this.
But I too do some inter market relationship analysis. Sometime trading decisions affect this as well. It is always a complex relation, look at how many question we have to answer, before we can decide what we are going react in current day trading and on the next day (most of us are interested in these two).
1. If EU has fallen 1% in bullish market, can it bounce and trigger short covering in out market while trading?
2. If EU is negative now, can it be up tomorrow and make a bullish trigger tomorrow. Is it making shorters nervous today?
3. Dow has corrected yesterday, can it go up today?
4. Most Asia have closed down today, can those be up tomorrow?
Its a bit complex I think. Better, we look at our chart and get clue most of the time. Though, some cases, global markets do change the path of our market.
Happy Trading!
But I too do some inter market relationship analysis. Sometime trading decisions affect this as well. It is always a complex relation, look at how many question we have to answer, before we can decide what we are going react in current day trading and on the next day (most of us are interested in these two).
1. If EU has fallen 1% in bullish market, can it bounce and trigger short covering in out market while trading?
2. If EU is negative now, can it be up tomorrow and make a bullish trigger tomorrow. Is it making shorters nervous today?
3. Dow has corrected yesterday, can it go up today?
4. Most Asia have closed down today, can those be up tomorrow?
Its a bit complex I think. Better, we look at our chart and get clue most of the time. Though, some cases, global markets do change the path of our market.
Happy Trading!
Apurv short term may look good. But overall, the stock is in a a bad shape. Wait for it to trend a bit. I think the next retracement should tell you whether the stock is still strong. Till then keep it on your watch list.
Fundamentally, there is not much in the stock, neither in the sector. This stock belongs to a sector which tends to do well with capital goods and engineering stocks. Wait for fundamental confirmation as well.
Am sure you will find many good stocks which are in much better shape than Aban. For instance, try looking at Cholamandalam Finance.
Tc
Fundamentally, there is not much in the stock, neither in the sector. This stock belongs to a sector which tends to do well with capital goods and engineering stocks. Wait for fundamental confirmation as well.
Am sure you will find many good stocks which are in much better shape than Aban. For instance, try looking at Cholamandalam Finance.
Tc
Hi
As I was reading now in this thread about market analyzing, I thought I post once that interview with Jim Dalton here. Hope you do not mind as I normaly post in the Den room. Jim Dalton is a pro and a mountain of knowledge.
The questioning part gives surely some new ideas to use.
Hope you enjoy it :
Today's special gues is Jim Dalton We have talked about his book for many years in this room.....The name of his first book was Mind Over Markets, considered to be the "bible" by some early prop rooms. He recently released his new book, called "Markets in Profile", which we have also encouraged you to read recently.
Hi! What I really want to talk about today is to contrast something "context" free versus viewing something contextually.
The market is a two way auction process Allocates bids and offers in an extremely fair and efficient manner(supply and demand) Searches out and
reveals market-generated information. If you will begin to think of markets as an auction process you will begin to understand that if higher prices
are attracting more bids the odds are, that the auction will continue higher.
If higher pirces are cutting off a number of bids, the auction is ending and risk of maintaining long positions has increased substantially.
Of course, just the opposite would be true: if offers were taking the market lower. The results of the auction are what we refer to as market generated
information. The three components of the auction are time, price and volume.
- Price advertises all opportunities
- Time regulates all opportunities i./e., if it is a good deal, it shuold not be there very long
- And volume measures the success or failure of the advertised opportunities
What is important to realize is that the The Market Profile is a real-time evolving database that capture sand records the markets two-way auctions
(content of slide you see) or, as we say, it allows you to view the market in the present tense
Phil Jackson said when he was managing the Bulls, Winning results from operating in the Present Tense, not rehashing yesterday's game or playing tomorrow's game too early.
We can take some questions for Jim.
Freddy [17:06:41]> Hi Jim, am your biggest fan and have been using the profile for more than a year now - your trading concepts are terrific - one of my biggest challenge as a trader is to correctly anticipate - to the extent humanly possible (!) (and thus have CONFIDENCE in) the TYPE of day (and when there are changes in conditions invalidating such analysis) - breakouts from low volatility, failed auctions or gaps are typical clues for possible trend days, and neutral internals (breadth / volume) and no strong money flow clues for neutral days - any of your own tips you could share on that?
Also, if you don't mind , I'd like to hear you on how you use stops (on neutral and trend days) and how do you take into account the risk/reward ratio (and as well leverage) for your trades, any minimum RR you are looking for, any particular situation where you use more leverage, etc. thx Jim ! You rock
Freddy: the first thing I look for is to see if we are opening above value , within value, or below value
I look to see how much confidence there is around the opening For those who have read Markets in Profile you are aware that we describe 4 types of openings:
- Ranging from very high confidence, to very low confidence.
- Trend days, seldom occur, following an opening that takes place in the center of the previous days value.
- An upside trend day, for example, more often occurs when the market has opened above value for the previous day, combined with a high confidence opening OR
- When the market has opened below the previous days value area and particularly below the previous days lowest price and shows a high confidence opening to the upside (in the case of a long)
Once the trade is entered, it then cecomes important to monitor the trade for continuation. By this I mean, the profile should remain elongated with the
point of control that steadily migrates higher throughout the day Additionally, I would expect to see the market "one time framing" By one time framing,
if the market is trading higher, I mean that the second bar or period, does not take out the low of the first bar but does take out the high of the first
bar (30 minute charts) With this process continuing throughout the day An inside bar, where price remains totally within the bar from the prevous period,
does not negate the one time framing action
It is rare to have a trend day, where the market woudl stop "one time framing" for more then one period. This is my choice, not recommended for most: but I seldom use stops, rather, I rely on changing market structure to tell me that my trade is not developing as anticipated.
rolcol [17:13:49]> (going from CQG display & Stedlmeier observations) ..........do you have any comments on either I/J (12-1 pm cst) or M/N (2-3 pm cst) overlap periods and their tendencies?
I do not consider issues like this even though from time to time they may have relevancy. I have found that by thinking of these types of things
thinking in terms of what time periods' highs or lows are made thinking in terms of average range extension actually diminishes my mental flexibility
and has a tendency to trap me on the really important days such as trend days.
To expand on this question, when the market is in a relatively narrow trading range for the day, these type of things that you bring up are meaningful
as are more traditional technical indicators. However, on the BIG days, when the long term money is in the markets, these type of indicators get blown away and can do some serous damage to short term traders. It is not uncommon, to hear traders say they make money most of the days. However, if it hadn't been for one or two days of the month, it would have been a great month.
By focusing too heavily on shorter term indicators it is too easy to miss the changes that occur as serious money quickly enters the market place.
For more information go here : marketsinprofile.com/
Take care and have a nice evening.
DanPickUp
As I was reading now in this thread about market analyzing, I thought I post once that interview with Jim Dalton here. Hope you do not mind as I normaly post in the Den room. Jim Dalton is a pro and a mountain of knowledge.
The questioning part gives surely some new ideas to use.
Hope you enjoy it :
Today's special gues is Jim Dalton We have talked about his book for many years in this room.....The name of his first book was Mind Over Markets, considered to be the "bible" by some early prop rooms. He recently released his new book, called "Markets in Profile", which we have also encouraged you to read recently.
Hi! What I really want to talk about today is to contrast something "context" free versus viewing something contextually.
The market is a two way auction process Allocates bids and offers in an extremely fair and efficient manner(supply and demand) Searches out and
reveals market-generated information. If you will begin to think of markets as an auction process you will begin to understand that if higher prices
are attracting more bids the odds are, that the auction will continue higher.
If higher pirces are cutting off a number of bids, the auction is ending and risk of maintaining long positions has increased substantially.
Of course, just the opposite would be true: if offers were taking the market lower. The results of the auction are what we refer to as market generated
information. The three components of the auction are time, price and volume.
- Price advertises all opportunities
- Time regulates all opportunities i./e., if it is a good deal, it shuold not be there very long
- And volume measures the success or failure of the advertised opportunities
What is important to realize is that the The Market Profile is a real-time evolving database that capture sand records the markets two-way auctions
(content of slide you see) or, as we say, it allows you to view the market in the present tense
Phil Jackson said when he was managing the Bulls, Winning results from operating in the Present Tense, not rehashing yesterday's game or playing tomorrow's game too early.
We can take some questions for Jim.
Freddy [17:06:41]> Hi Jim, am your biggest fan and have been using the profile for more than a year now - your trading concepts are terrific - one of my biggest challenge as a trader is to correctly anticipate - to the extent humanly possible (!) (and thus have CONFIDENCE in) the TYPE of day (and when there are changes in conditions invalidating such analysis) - breakouts from low volatility, failed auctions or gaps are typical clues for possible trend days, and neutral internals (breadth / volume) and no strong money flow clues for neutral days - any of your own tips you could share on that?
Also, if you don't mind , I'd like to hear you on how you use stops (on neutral and trend days) and how do you take into account the risk/reward ratio (and as well leverage) for your trades, any minimum RR you are looking for, any particular situation where you use more leverage, etc. thx Jim ! You rock
Freddy: the first thing I look for is to see if we are opening above value , within value, or below value
I look to see how much confidence there is around the opening For those who have read Markets in Profile you are aware that we describe 4 types of openings:
- Ranging from very high confidence, to very low confidence.
- Trend days, seldom occur, following an opening that takes place in the center of the previous days value.
- An upside trend day, for example, more often occurs when the market has opened above value for the previous day, combined with a high confidence opening OR
- When the market has opened below the previous days value area and particularly below the previous days lowest price and shows a high confidence opening to the upside (in the case of a long)
Once the trade is entered, it then cecomes important to monitor the trade for continuation. By this I mean, the profile should remain elongated with the
point of control that steadily migrates higher throughout the day Additionally, I would expect to see the market "one time framing" By one time framing,
if the market is trading higher, I mean that the second bar or period, does not take out the low of the first bar but does take out the high of the first
bar (30 minute charts) With this process continuing throughout the day An inside bar, where price remains totally within the bar from the prevous period,
does not negate the one time framing action
It is rare to have a trend day, where the market woudl stop "one time framing" for more then one period. This is my choice, not recommended for most: but I seldom use stops, rather, I rely on changing market structure to tell me that my trade is not developing as anticipated.
rolcol [17:13:49]> (going from CQG display & Stedlmeier observations) ..........do you have any comments on either I/J (12-1 pm cst) or M/N (2-3 pm cst) overlap periods and their tendencies?
I do not consider issues like this even though from time to time they may have relevancy. I have found that by thinking of these types of things
thinking in terms of what time periods' highs or lows are made thinking in terms of average range extension actually diminishes my mental flexibility
and has a tendency to trap me on the really important days such as trend days.
To expand on this question, when the market is in a relatively narrow trading range for the day, these type of things that you bring up are meaningful
as are more traditional technical indicators. However, on the BIG days, when the long term money is in the markets, these type of indicators get blown away and can do some serous damage to short term traders. It is not uncommon, to hear traders say they make money most of the days. However, if it hadn't been for one or two days of the month, it would have been a great month.
By focusing too heavily on shorter term indicators it is too easy to miss the changes that occur as serious money quickly enters the market place.
For more information go here : marketsinprofile.com/
Take care and have a nice evening.
DanPickUp
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