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a layman's approach to break out and break down |
casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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Post: #211  Posted: Fri Nov 12, 2010 6:05 pm Post subject: |
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one more thing, (i always have some thing to say even after saying a thousand words  ), if u want to make short moves, u can reduce the default rsi setting of 14 to 2 or 3, u will see how nicely it shows the oversold/overbought areas,
even in eod charts it will precisely show the oversold/overbought areas and if used with bolinger band (which will show u the possible upper and lower range of the stock on a short term basis), it works great for short term trading, this is not my genuine idea, this idea was posted in forum a long time ago, i dont remember exactly, but may be by "chulbul pandey" sir
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vishytns
White Belt
Joined: 26 Nov 2009
Posts: 206
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| Post: #212 Posted: Fri Nov 12, 2010 7:17 pm Post subject: |
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Casper,
Please check NIFTY daily chart. I see a broadening top formation in NIFTY. Let me know if this pattern is true. How do we decide targets in case of broadening pattern.
Great going buddy...
Vishy
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casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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| Post: #213 Posted: Fri Nov 12, 2010 8:34 pm Post subject: |
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hi vishy, welcome back
yes u r right, its a broadening top and a break down below 6000 will confirm the pattern,
in case of broadening top, we need to measure the distance of break down level from the top and project it downward, in this case, target will be some where around 5700,(my goodness)
what an extra ordinary perception u have vishy,,,, , frankly speaking if u did not name it in ur post, i would not have dreamt of it, as it is so rare and so devastating, now after a close below 6000, we will have 5700 as a target, its still ok with me if nifty get corrected this way, but if foreign money save it this time again, then the next fall (whenever it occur) will be a tragedy
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vishytns
White Belt
Joined: 26 Nov 2009
Posts: 206
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| Post: #214 Posted: Fri Nov 12, 2010 8:51 pm Post subject: |
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Casper,
Thanks for your additional information on Broadening top, this isof great help for us. Good to see a rare pattern occurance. Let us see if there is a convincing break of 6000.
One more suggestion
We need to track our studies and outcome of the patterns in stocks so that it will help us in future. We can track this information in an excel sheet. We can update the excel sheet whenever we find some patterns in any stocks. Instead of going thru complete thread to understand the progression of our study, it would be better we can single excel workbook containing the information.
It could contain the following information
1. Stock name
2. Pattern name
3. Date of pattern recognisition
4. Break out/Break down trade.
5. Target date.
6. Pattern result (Pass/Fail) Reasons for failure in case of any failure
7 ....
We can have many more information that would help us to know the history of Break Out/Down success and failures.
Let me know your ideas on this.
Buddy you are doing great job of idenitfying the patterns, LET US TRACK THEN FOR BETTER UNDERSTANDING HOW PATTERNS BEHAVE and HELP US TO IDENTIFY PATTERNS THAT WOULD BE SUCCESSFUL TRADES.
What do you say??
Vishy
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casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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| Post: #215 Posted: Fri Nov 12, 2010 9:20 pm Post subject: |
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you are absolutely right, in fact im already maintaining a note book in physical format, it will be more easier for us to study the subject systematically if we use spread sheets, but then, we have to update this, say in every 7days
and i have a good news for all of us, u may remember that once i wrote that we need to develop a way to sort out the true break out candidates from the false break out candidates even before the actual bo occur,
as of now, we have got an way to do it, as far as back-testing is concerned,
BROTHER, IT GAVE 100% PERFECTION, today i have finished this testing around 7pm, now i am going to test in in paper trading, from monday to fri day, and if it gets through the real time paper trading then just imagine what kind of weapon it will be!!!!
i will test it up to fri day and regardless we succeed or fail, i will post the entire episode with sample data on which im working,
if we succeed then this strategy will be for all of us and if we fail, then im sure that here with all of our coordinated efforts, we will find and fix the loop holes
( i thought i will not say now about it, will keep it as a surprise for all of u, but then i could not resist )
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chrome
Yellow Belt
Joined: 28 Dec 2009
Posts: 645
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| Post: #216 Posted: Fri Nov 12, 2010 10:13 pm Post subject: |
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| casper wrote: | you are absolutely right, in fact im already maintaining a note book in physical format, it will be more easier for us to study the subject systematically if we use spread sheets, but then, we have to update this, say in every 7days
and i have a good news for all of us, u may remember that once i wrote that we need to develop a way to sort out the true break out candidates from the false break out candidates even before the actual bo occur,
as of now, we have got an way to do it, as far as back-testing is concerned,
BROTHER, IT GAVE 100% PERFECTION, today i have finished this testing around 7pm, now i am going to test in in paper trading, from monday to fri day, and if it gets through the real time paper trading then just imagine what kind of weapon it will be!!!!
i will test it up to fri day and regardless we succeed or fail, i will post the entire episode with sample data on which im working,
if we succeed then this strategy will be for all of us and if we fail, then im sure that here with all of our coordinated efforts, we will find and fix the loop holes
( i thought i will not say now about it, will keep it as a surprise for all of u, but then i could not resist ) |
hi casper, really nice to read ur post. Eagerly waiting for ur strategy. Best of luck.
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newinvestor
White Belt
Joined: 16 Feb 2010
Posts: 120
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| Post: #217 Posted: Fri Nov 12, 2010 11:13 pm Post subject: |
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| casper wrote: | dijyya thanks and welcome
newinvestor, once i posted a real time chart in st sir's thread, it was a 89 ema high and 89 ema low cross over chart and i asked him to comment on that,
he precisely told me that if i use ONLY ema crossover to take a trade then i will be successful only on heavy trending days, in case of choppy and nervous trading days, ema crossover is bound to make whipsaws,
so he told me to use a trend identifier indicator,among other indicators, he told me to use adx in particular and the result was good.
if u are not very accustomed with adx, u can try to use rsi also as it is one of the very simple indicators, in case of rsi, the thumb rule will be never go long when rsi in real time chart shows over bought nad never go short when rsi is oversold
normally a shorter and a higher ema is used to trade with ema cross over, u wrote about 20 ema but did not mention the another one,
let us assume that we are using 13 ema and 20 ema crossover along with rsi,
the idea of trade will be GO LONG WHEN THE SHORTER EMA IS CROSSING AND COMING ABOVE THE HIGHER EMA AND RSI IS OVERSOLD OR RISING BUT CERTAINLY NOT OVERBOUGHT
AND GO SHORT, WHEN THE SHORTER EMA IS CROSSING THE HIGHER EMA IN A DOWNWARD MOTION AND RSI IG GOING DOWN OR OVER BOUGHT BUT CERTAINLY NOT THE OVERSOLD
the logic behind is IN CASE OF A PRICE INCREMENT , THE SHORT TIME AVERAGE WILL BE GREATER THAN THE LONG TIME AVERAGE SO THE SHORTER EMA WILL CROSS HIGHER EMA IN A UPWARD MOTION
AND IN CASE OF CORRECTION THE SHORTER AVERAGE WILL BE LESSER THAN THE HIGHER AVERAGE SO IT WILL CROSS THE HIGHER EMA IN A DOWNWARD MOTION
the rsi reading will save us from shorting at a possible bottom and buying at a possible top
in short this is the basic structure of any ema cross over strategy, and personally as i follow the break out strategy even in real time chart, so i dont use ema crossover to trade |
Thanks Casper.
Guess I have a lot of home work to do. I was trying to use price crossing the 20 EMA. No wonder I had the whipsaws !!
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newinvestor
White Belt
Joined: 16 Feb 2010
Posts: 120
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| Post: #218 Posted: Sat Nov 13, 2010 12:23 am Post subject: |
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| casper wrote: | you are absolutely right, in fact im already maintaining a note book in physical format, it will be more easier for us to study the subject systematically if we use spread sheets, but then, we have to update this, say in every 7days
and i have a good news for all of us, u may remember that once i wrote that we need to develop a way to sort out the true break out candidates from the false break out candidates even before the actual bo occur,
as of now, we have got an way to do it, as far as back-testing is concerned,
BROTHER, IT GAVE 100% PERFECTION, today i have finished this testing around 7pm, now i am going to test in in paper trading, from monday to fri day, and if it gets through the real time paper trading then just imagine what kind of weapon it will be!!!!
i will test it up to fri day and regardless we succeed or fail, i will post the entire episode with sample data on which im working,
if we succeed then this strategy will be for all of us and if we fail, then im sure that here with all of our coordinated efforts, we will find and fix the loop holes
( i thought i will not say now about it, will keep it as a surprise for all of u, but then i could not resist ) |
That will be great. Look forward to it
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vishytns
White Belt
Joined: 26 Nov 2009
Posts: 206
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| Post: #219 Posted: Sat Nov 13, 2010 6:30 am Post subject: |
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Casper,
You know it is not a surprise for me  . I know good Techincal analysts (Casper) always keep track of what they have studied and also maintain stock behaviours in various scenarios  .
We are eagerly waiting for your strategy buddy.
Vishy.
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aromal
White Belt
Joined: 22 Mar 2010
Posts: 302
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| Post: #220 Posted: Sat Nov 13, 2010 7:50 am Post subject: |
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| newinvestor wrote: | | casper wrote: | dijyya thanks and welcome
newinvestor, once i posted a real time chart in st sir's thread, it was a 89 ema high and 89 ema low cross over chart and i asked him to comment on that,
he precisely told me that if i use ONLY ema crossover to take a trade then i will be successful only on heavy trending days, in case of choppy and nervous trading days, ema crossover is bound to make whipsaws,
so he told me to use a trend identifier indicator,among other indicators, he told me to use adx in particular and the result was good.
if u are not very accustomed with adx, u can try to use rsi also as it is one of the very simple indicators, in case of rsi, the thumb rule will be never go long when rsi in real time chart shows over bought nad never go short when rsi is oversold
normally a shorter and a higher ema is used to trade with ema cross over, u wrote about 20 ema but did not mention the another one,
let us assume that we are using 13 ema and 20 ema crossover along with rsi,
the idea of trade will be GO LONG WHEN THE SHORTER EMA IS CROSSING AND COMING ABOVE THE HIGHER EMA AND RSI IS OVERSOLD OR RISING BUT CERTAINLY NOT OVERBOUGHT
AND GO SHORT, WHEN THE SHORTER EMA IS CROSSING THE HIGHER EMA IN A DOWNWARD MOTION AND RSI IG GOING DOWN OR OVER BOUGHT BUT CERTAINLY NOT THE OVERSOLD
the logic behind is IN CASE OF A PRICE INCREMENT , THE SHORT TIME AVERAGE WILL BE GREATER THAN THE LONG TIME AVERAGE SO THE SHORTER EMA WILL CROSS HIGHER EMA IN A UPWARD MOTION
AND IN CASE OF CORRECTION THE SHORTER AVERAGE WILL BE LESSER THAN THE HIGHER AVERAGE SO IT WILL CROSS THE HIGHER EMA IN A DOWNWARD MOTION
the rsi reading will save us from shorting at a possible bottom and buying at a possible top
in short this is the basic structure of any ema cross over strategy, and personally as i follow the break out strategy even in real time chart, so i dont use ema crossover to trade |
Thanks Casper.
Guess I have a lot of home work to do. I was trying to use price crossing the 20 EMA. No wonder I had the whipsaws !! |
 trading is a group activity...... not on market hours..... after that
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casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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| Post: #221 Posted: Sat Nov 13, 2010 11:00 am Post subject: |
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hi chrome sir, newinvestor, vishy thanks for ur encouragements and kind words, im sorry, i could not write earlier, got fever suddenly 
aromal, right u r , united we stand, divided we fall 
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newinvestor
White Belt
Joined: 16 Feb 2010
Posts: 120
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| Post: #222 Posted: Sat Nov 13, 2010 1:49 pm Post subject: |
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| casper wrote: | hi chrome sir, newinvestor, vishy thanks for ur encouragements and kind words, im sorry, i could not write earlier, got fever suddenly
aromal, right u r , united we stand, divided we fall |
Get well Soon. All the best
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casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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| Post: #223 Posted: Sat Nov 13, 2010 9:01 pm Post subject: |
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| newinvestor wrote: | | casper wrote: | hi chrome sir, newinvestor, vishy thanks for ur encouragements and kind words, im sorry, i could not write earlier, got fever suddenly
aromal, right u r , united we stand, divided we fall |
Get well Soon. All the best |
hi, with some crocin, now almost ok
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casper
Green Belt
Joined: 02 Oct 2010
Posts: 1315
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| Post: #224 Posted: Sat Nov 13, 2010 9:09 pm Post subject: |
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| newinvestor wrote: | | casper wrote: | dijyya thanks and welcome
newinvestor, once i posted a real time chart in st sir's thread, it was a 89 ema high and 89 ema low cross over chart and i asked him to comment on that,
he precisely told me that if i use ONLY ema crossover to take a trade then i will be successful only on heavy trending days, in case of choppy and nervous trading days, ema crossover is bound to make whipsaws,
so he told me to use a trend identifier indicator,among other indicators, he told me to use adx in particular and the result was good.
if u are not very accustomed with adx, u can try to use rsi also as it is one of the very simple indicators, in case of rsi, the thumb rule will be never go long when rsi in real time chart shows over bought nad never go short when rsi is oversold
normally a shorter and a higher ema is used to trade with ema cross over, u wrote about 20 ema but did not mention the another one,
let us assume that we are using 13 ema and 20 ema crossover along with rsi,
the idea of trade will be GO LONG WHEN THE SHORTER EMA IS CROSSING AND COMING ABOVE THE HIGHER EMA AND RSI IS OVERSOLD OR RISING BUT CERTAINLY NOT OVERBOUGHT
AND GO SHORT, WHEN THE SHORTER EMA IS CROSSING THE HIGHER EMA IN A DOWNWARD MOTION AND RSI IG GOING DOWN OR OVER BOUGHT BUT CERTAINLY NOT THE OVERSOLD
the logic behind is IN CASE OF A PRICE INCREMENT , THE SHORT TIME AVERAGE WILL BE GREATER THAN THE LONG TIME AVERAGE SO THE SHORTER EMA WILL CROSS HIGHER EMA IN A UPWARD MOTION
AND IN CASE OF CORRECTION THE SHORTER AVERAGE WILL BE LESSER THAN THE HIGHER AVERAGE SO IT WILL CROSS THE HIGHER EMA IN A DOWNWARD MOTION
the rsi reading will save us from shorting at a possible bottom and buying at a possible top
in short this is the basic structure of any ema cross over strategy, and personally as i follow the break out strategy even in real time chart, so i dont use ema crossover to trade |
Thanks Casper.
Guess I have a lot of home work to do. I was trying to use price crossing the 20 EMA. No wonder I had the whipsaws !! |
what kind of home work u r going to do? plz tell me if i could help u any way.its true that u have to gather experience on ur own to boost confidence, but if u need any information plz let me know
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measoldier
White Belt
Joined: 09 Sep 2010
Posts: 36
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