Monday, July 22, 2013

High Profitability Trading

When it comes to ultimate trading system; everyone are interested to know about. Obviously it is one of the curious topic discussed form centuries. Everything started form plotting “X” and “O” on cigarette packs or placing candles on a sand table.  Technical Analysis grew as an industry without even realizing.

We have witnessed many things in these times Black–Scholes, quant, expert system, cutting edge software’s, back testing and  dozens & dozens of indicators. Let me come again, where are we today. A time we are bombarded too many techniques, models, strategies and methods. Few sold over courses and coaching’s few are shown on YouTube few kept hush-hush.  Ultimately, today we leave in a world where we have too many techniques to follow too many indicators been invented few paid, few unpaid, few reliable and few aren’t.

After spending centuries of time, and spending huge amount of money. What we have found? Is it an ultimate trading system? The answer is no and we won’t find it until we understand the simplest things of stock market. That’s volatility, price and volume; all these are the basic pillars of technical analysis. Any indicators, trends, patterns follow these basic principles of markets.
Stock market is not a Pandora box it’s a simple demand and supply. There is nothing called as high profitability trading technique, every system have its own risk. Risk and reward are the basic inherent variables of any trade using a system. Remember, every system have certain risk even a risk free model such as Black–Scholes model also had a risk with it. Ultimately we are left with models which can be applied the only thing that you have to know is when to apply.

I love Kung-fu Panda, the most loved part in that movie is “nothing”. The soup-noodles isn't made up of a special ingredient nor there is any special description about martial arts on dragon scroll. Similarly we have left out with nothing in stock market. I have literally seen peoples who make money only using candle sticks and moving averages. And they are doing well, I regularly hear about a marwadi in Bangalore who use manual tools for predicting market. And that man is well-known for accuracy. How did he do that? It is nothing but shear dedication towards market.

This Sunday I was able to interact with an interesting man he is very close to Indian army. He told “Any army in the world have an average IQ. It isn’t an IQ that make that difference, it the discipline”. Larry Berman told something similar “I am a technical analyst; I have people to punch my orders”. Guys, any bullshit can make money out of market and we have good examples for that: Turtles, Million Dollar Traders (documentary) and many more. In an official blog of Rakesh Junjunwala described “people laughed at me when I told I want to be in stock market”(When Rakesh took a decision to start trading in his college days).

Coming again, we have nothing called as high profitability trading. If there is so than its you. And only you.

Wednesday, June 12, 2013

Strategy For Gold: Technical Analysis on Request

My last article on gold told about gold coming up to 28k. I was write and the gold have reached 28k, filling the gap.
If gold start correcting after this gap filling we may see a support at 27,300-27,400. if the support fail we may see it coming to a support at 26,400-276,500. Gold is a hold

Click here for previous article on gold

Thursday, May 23, 2013

Technical analysis on Request: Gold

Gold is forming a kind of symmetrical triangle and gave a bullish breakout. Gold will rise around 28k levels and find some resistance. If it manages to go above 29k gold will be on a bull run. 

Sunday, April 28, 2013

Weekly analysis of Sensex: 29th April to 3rd March 2013

The market  will  looking sluggish this week the resistance of 19712 will be a major resistance for this week the market is expected to have  18624 as a support at lower side. we are seeing a negative divergence in in Sensex, this may drive to 18624.

 Am I bullish on Sensex?
No, I expect a consolidation. We are seeing a risk building out in Sensex, as per me this week is the week for profits booking. Most of the short term players may book profit this week.

How much consolidation is good for Sensex?
18510-18000 need to be the support below which market is not healthy to grab. If market manages to consolidate below 18000 levels we may see a free fall upto 17500/16900.

Wednesday, April 24, 2013

Sleeping Triangle: An Research and Findings by Sangamesh.K.S Part 1

Sleeping Triangles
The name may be fascinating, interesting, curious sometimes weird. The main myth with this pattern has stimulated my need towards understanding pattern at a higher level.  When we go into, what is it all about? How this pattern emerged?  We come to know there are 2 major parts in Sleeping Triangle.  One is body and other is the sleeping body of the triangle. I call it as real body and sleeping body.

Real Body
 As per my observation the real body will be lengthiest price action before breakout. The real body get into new resistance. It will touch the higher price, the price action of the real body will be very high and sometimes it take a short time duration (it may be formed within couple of days). As the price action with real body is very high. We normally tend to see RSI and other Oscillators going to a overbought zone.

Sleeping Body
The sleeping body is the essential part which differs from a regular triangle. The price action will never tend touch the support (it will touch only once before giving a breakout) instead try to be at a higher level but the sentiments of the market drag the price action lower such that it from a channel.  The volume will be much lower compared to real body.
 The price action of the sleeping body can be seen sticking to the upper level. And show the sentiments to be bullish.

Premature breakouts
Sometimes we may see the price giving premature breakouts which will say the future breakout (intension of bullish/bearish breakout) and price action.

 The breakout will be formed when the price hit the support and when the support is good the price rebound which cause a breakout.
*T&C Apply

Strategy: Trading using Sleeping Triangle   
When we see a bullish breakout it is the only level where we can buy. As the price level is low it is the best opportunity to buy at a breakout and sell at a higher high. The triangles need to be traded opposite of a triangle. In the figure above, we can see a triangle which resembles as a descending triangle.  In a descending triangle we normally place a stop loss above the trend line but here in this sleeping we need to place a stop opposite to the descending triangle

Types of Sleeping Triangle
These triangle are of 2 types namely an
·         Ascending  Sleeping Triangle(Bearish)
·         Descending Sleeping Triangle(Bullish)
An example of descending triangle forming in Tata Coffee

Descending Triangle
 For More details

Tuesday, April 23, 2013

RIL: An Analysis for 25/4/13

After one cycle swing seen in reliance I am looking a reversal. The stock has a powerful resistance at 850. If it able to cross then we can see the stock going up to 920.

Indicators:  we are seeing a bullish divergence which is been building from long days. We see this divergence in MACD. We have even seen a good crossover as most of the stock has been in a bearish mode. It is been a hotspot for many of the investors.

Fib Levels:  As I had told above this stock may find resistance at 50%. If it manages to cross that level, it will reach to 920. Which will lead to 920 levels; the stock is looks potential and we may even see the stock moving more than 940 as the divergence is strong.

Moving Average: I have been looking for a long time. The stock is more sentimental towards 20 DMA. After confirmation of a breakout in 20 DMA this stock is found to be bullish.