Trading Strategies Using Technical Analysis
- Thread starter SwingKing
- Start date
- Tags trading strategies
I would say reversal round the corner in index. 
I think , due to line of sight issue it difficult to see beyond the corner.
Shankar Sharma , has been saying since 21st May 2009 that market will go down to 3900 before going high. Then another bear of the market Ambrish (from Karvy ) said , it will go down but only uptoo 4100...
All these things have kept retail investors away form the market. After 6000 When all Small and big TAs start thinking that now we are in bull market and you start hearing only buy calls then Retail INvestors will enter the market. FIIs who are in market from 3900 and below Level and waiting for this opportunity start selling their holdings. Retail Investors will keeping buy thinking all so called expert and TAs are giving buy call.
Finally when music stop only sufferer would be retail investors.
ST and All,
I agree retail participation is missing. But there is onething we need to discount, and that is, retail participation in F&O markets. Retail investors are lacking the patience, they don't talk about equities now, they want participation in F&O as they feel the road to get rich quick lies in this segment. No wonder why data in futures market point towards high level of participation. How many of the participants here talk about equities? That's for you guys to think upon.
Tc
I agree retail participation is missing. But there is onething we need to discount, and that is, retail participation in F&O markets. Retail investors are lacking the patience, they don't talk about equities now, they want participation in F&O as they feel the road to get rich quick lies in this segment. No wonder why data in futures market point towards high level of participation. How many of the participants here talk about equities? That's for you guys to think upon.
Tc
Re: Rectangle Pattern
Nice Explanation. I liked it. I am new for trading, Please tell me how to start, i mean from where u get graphs? and all?? i opened my account in Sharekhan. so how to get graphs? MA? Volumes, and other things.
RECTANGULAR PATTERN ON WEEKLY BASIS
Tools – Candlestick/Bar Chart, ADX (14) and MACD Oscillator with standard settings
Trade Setup – The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (high beta high volume) or the Index. The pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either direction. This pattern is extremely effective and provides with good risk/reward ratio. I chose high beta stocks to cash in on the moves as quickly as possible.
Time Validity - I trade this pattern only on weekly charts. The reason behind this is simple. The more the data, the more reliable the pattern. Thus data and patterns on monthly charts are certainly more reliable than weekly chart. Some analysts do say that the weekly pattern should not extend beyond certain weeks. However, my research indicates that this condition may or may not hold true. Personally, I prefer the formation rather than the time frame.
When does it occur - This pattern can be found during consolidations, new highs and new lows. Some books do indicate that these patterns are typically consolidation patterns but I have found these patterns effective in nearly every situation.
How to trade it - Refer to the chart below. What we see is that HCC forms a bottom by forming a rectangle pattern. Usually there must be 4 points of contact in the pattern (as marked in the figure). However, in some extreme cases I have seen points stretching to 6-8. Volumes during the pattern should diminish and the NDI should be greater than PDI. Though NDI is greater than PDI, the stock instead of falling further consolidates in a range. This usually is the first clue for the stock validating the pattern. As the pattern develops and begin to show strength, the volumes, ADX (14) and PDI all start to pick up. This is usually the second clue and beyond this only the breakout confirmation is required. The breakout confirmation is usually recommended as validation of pattern breach. However, I personally prefer to see a gap up breach (check chart). I have found that gap up along with the previous clues mentioned works exceptionally well for this pattern. The stock usually runs up quite fast and doubles in near term. Though the gap up is rare, but if you find one, then latch on to it. Keep in mind the slope of MACD while buying. It should be positive and should have an upward bias.
Target - Add the range of the rectangle to the breaching level. This is the minimum target that can be achieved. The maximum cannot be predicted.
STOPLOSS - I would prefer not to refer to stop loss levels as every trader is different in having his own rules of money management. Please use your own rules for managing equity.
Usage - This pattern is effective in weekly and daily trades. However, I have also had considerable amount of success using it on intraday basis. If someone wants, I'll post how to use this in intraday setups.
Tools – Candlestick/Bar Chart, ADX (14) and MACD Oscillator with standard settings
Trade Setup – The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (high beta high volume) or the Index. The pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either direction. This pattern is extremely effective and provides with good risk/reward ratio. I chose high beta stocks to cash in on the moves as quickly as possible.
Time Validity - I trade this pattern only on weekly charts. The reason behind this is simple. The more the data, the more reliable the pattern. Thus data and patterns on monthly charts are certainly more reliable than weekly chart. Some analysts do say that the weekly pattern should not extend beyond certain weeks. However, my research indicates that this condition may or may not hold true. Personally, I prefer the formation rather than the time frame.
When does it occur - This pattern can be found during consolidations, new highs and new lows. Some books do indicate that these patterns are typically consolidation patterns but I have found these patterns effective in nearly every situation.
How to trade it - Refer to the chart below. What we see is that HCC forms a bottom by forming a rectangle pattern. Usually there must be 4 points of contact in the pattern (as marked in the figure). However, in some extreme cases I have seen points stretching to 6-8. Volumes during the pattern should diminish and the NDI should be greater than PDI. Though NDI is greater than PDI, the stock instead of falling further consolidates in a range. This usually is the first clue for the stock validating the pattern. As the pattern develops and begin to show strength, the volumes, ADX (14) and PDI all start to pick up. This is usually the second clue and beyond this only the breakout confirmation is required. The breakout confirmation is usually recommended as validation of pattern breach. However, I personally prefer to see a gap up breach (check chart). I have found that gap up along with the previous clues mentioned works exceptionally well for this pattern. The stock usually runs up quite fast and doubles in near term. Though the gap up is rare, but if you find one, then latch on to it. Keep in mind the slope of MACD while buying. It should be positive and should have an upward bias.
Target - Add the range of the rectangle to the breaching level. This is the minimum target that can be achieved. The maximum cannot be predicted.
STOPLOSS - I would prefer not to refer to stop loss levels as every trader is different in having his own rules of money management. Please use your own rules for managing equity.
Usage - This pattern is effective in weekly and daily trades. However, I have also had considerable amount of success using it on intraday basis. If someone wants, I'll post how to use this in intraday setups.
I would say reversal round the corner in index.
I'd be very sure if markets go ahead in coming few sessions and makes a new high (preferably in 5500 + zone). This would almost make me certain regarding the fall ahead. Going a step forward, I would say this would also be a very interesting and hopefully profitable time for PUT options buyers going ahead.
Tc
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