Trading the Market: Methods in Madness

Sunday, October 25, 2009

Bangalore CNBC TV18 Investor's Camp - 24 Oct 2009

I attended the Bangalore meet on Saturday. This is the first time I participated in such an event.

There were four speakers.
Here are my personal take aways.

The first speaker was Sudarshan Sukhani. He was at his usual best. His statement about the market movement in the immediate future is that since the trend has been up, we must trade in that direction and there is not much use speculating where the top would be. When the trend reverses as it surely will, we should be prepared to trade in the other direction.

He presented several techniques on "Buying on Dips". He distinguished between two situations,

1. The first one was when the market in a sideways rangebound movement in an overall uptrend. The appropriate indicators are Bollinger Bands, Kelter Channels, CCI-100, EMA-50 and idea is to wait for the price to touch the lower ( or middle as appropriate) bands.

2. The other situation is when a strong uptrend has resumed, In such cases, the price may not dip to the lower bands mentioned above and the appropriat3e indicators would be Triangle formation, NR7, or Wedge patterns. The idea is to wait for such patterns to happend after resumptions of a trend and then trade in the direction of the trend.

For me, the presentation answered a long standing question as to which dip indicator is suitable for which occassion. The clarity of this presentation was just amazing.

I would summarize the other speakers in future posts.

If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com

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Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading

Thursday, October 8, 2009

Nifty Trading - Sellers Vs. Buyers

The market has once again started moving within a range. It went down to 4920 and then came up. It went up to 5080 and then came down.

Why is it moving up and down like that? I do not know the answer but I would like to reinterpret these movements in terms of classic tug of war between buyers and sellers.

Price fell from 5080 simply because MORE SELLERS EMERGED at that level than there were buyers.

Price recovered from 4920 because MORE BUYERS EMERGED at that level than there were sellers.

You might think that this is stating an obvious fact - but it has the advantage of helping you plan your trades.

For example, if 4920 were to break in the next few days, then you can take a bet on sellers having beaten the buyers and can go short at that point with a judicious SL

On the other hand if 5080 were to break on the upside, the buyers have won and you know what to do.

Until a winner emerges, it is not safe to take a huge bet on who is going to win. In other words, best to avoid trading in the range ( or trade in small volumes ) and trade in the direction when the breaking out /breaking down happens.

Until then cheer on from the sidelines.

If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com

Like this post? You can receive it free by subscribing. Just click on this link


Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading

Monday, October 5, 2009

Technical Stock Recoomendation - 05 Oct 2009



Looking at the chart of PVR, below, looks like it is resting after having broken out on high volume.
Buy with a Stop loss at 125. ( Please read the disclaimer below before trading)

Minimum target is 155. Trail with a stop loss













If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com

Like this post? You can receive it free by subscribing. Just click on this link


Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading