iCharts Discussions

[psalm]

[ridinghood]

hi psalm
ur gail call is tesing patience. today so far has held 365. and on the higher side went upto 371.5 vry close to sl. how do u read its move?
regs
ridinghood

[psalm]

Hi Ridinghood,

Gail is not a volatile stock....I mean its a low beta stock...So, you wont see the prices moving up and down so fast...its like a defensive stock.....I can understand how you might be feeling....but you must be patient...its not like an aban or a adani....where you can see the prices touching high and low within now time....If you think that there are better opportunities out there, then you can exit the position and go for that opportunity. The important thing is that your money must grow.

NOTE: After waiting for soo long, if the SL gets triggered, you will be more annoyed....hahaha...but pls knw that trades are like that....

Regards,

Sam

[ESNMURTY]

[psalm]

Thanks Murty...By the way, do u have any position in IBREALEST???

[ESNMURTY]

[ESNMURTY]

[psalm]

OK

[psalm]

Hi,

Stoploss triggered for the GAIL SHORT call....Gail is trading around 474 now....

[ESNMURTY]

[mpgramesh]

[ridinghood]

yeah psalm

[psalm]

[psalm]

Trading with Pivots

Identifying the trend is the most important factor in trading as well as investing. Its always better to go with the trend. The chances of a successful trade is higher if you are "with the trend". If you go against the trend of the overall market, then the chances are lesser. Once you have identified a trend, then you can search for opportunities. In order to identify the trend, you can use the technical indicators, moving averages, their crossovers etc. Some indicators will show you the over-bought or oversold conditions while some can give you insight into the money that is flowing into or going out of the system. Some of the of the indicators, that I use regularly are as follows:

1. MACD
2. ADX
3. SLOW STOCHASTICS
4. CCI
5. RSI
6. WILLIMS%R

I also make use of the Bollinger Bands and Parabolic SAR other than the moving averages. For the very short term, I use volume data and the Open Interest Data to select the stocks for analysis. Once I have found a few stocks which are tradeable according the main trend of the market, I'll look for levels to enter and exit. For that, I take use of the pivots, trend-lines etc. In technical terms, I'm a pivot trader. Even I consider basic fundamental things to come to a conclusion.

PIVOTS:

I consider this as a very powerful tool. I dont know why this tool is so powerful. May be because of the "HERD MENTALITY", but from my experience, I feel that this is a very powerful tool and my most important tool in my armoury. For example, I use pivots like Standard, Fibonacci, Gann, Camarilla, DeMarks, Woodies etc. Of all these pivots, I consider Fibonaacci as the most powerful. This is my opinion. There are a few Fibonacci Pivots tools which are used widely these days. They are as follows:

1. Fibonacci Retracements
2. Fibonacci Extensions
3. Fibonacci Expansions
4. Fibonacci Fans
6. Fibonacci Circles
7. Fibonacci Arcs
8. Fibonacci Ratios
9. Fibonacci Channels
10. Fibonacci Timelines

Out of these, I use the Fibonacci Retracements, Extensions, Fans and Arcs. All of these tools are for different purposes. For example, Fibonacci Retracements are used to estimate likely reversal points during an up- or down-trend. Fibonacci Arcs are used to forecast times of price ranging and support and resistance as well. The Fibonacci fan extends three or 4 lines wide and is primarily used to identify the next area of support and resistance as the price moves in time. Fibonacci Retracements are generally used to identify key support and resistance levels where the price will retrace, before moving on, either higher or lower.

The common thing about all these tools is that they all predicts the support and resistances or simply levels. Now you might be asking why I'm using all these Fibonacci tools if one is enough to find the levels. Even if you are using one of these things, you can find the support and resistance. Then why am I using all these 4 tools? Normally to check the support and resistance of a stock, I'll calculate the levels with all these tools first and then I'll note down these things. Once done with this, I'll check for the levels which are common to most of these methods. For example, suppose you are checking the levels for the Reliance stock. You have used the different methods and so, you will get different set of levels by each method. By cross checking these different sets, you can find that there are a few levels which are common in all the sets or most of the sets. For example, if the levels 800 or just around 800 is common in all the sets of pivots, then you can be sure that around 800 Reliance will experience resistance or support according to the current price.

NOTE: You can improve the method by adding more pivot studies like standard, camarilla, woodies, DeMarks, Gann and all. It will only improve the result. It takes a lot of time, thats why I'm not using it all the time. Another way to improve the accuracy is to use the Candlestick charts as well as the Line charts. You'll get different values with Candlesticks chart and the line charts of same stock. Also, you can select different periods as well. If you are looking for a longer target, you must you longer period. If you are looking for short term term targets or levels, you can use both longer period as well as shorter periods. Combining both LONGER period and SHORTER periods will improve the accuracy.

TIP: Adding fundamentals to your trading can improve the results. For example, suppose you got a resistance level of 1705 for SBI. You might buy it once it crosses this resistance level as you got it from the above mentioned analysis. But if you are aware that the EPS of SBI is 114.06 as of now, and that 15 times that EPS is 1711, you may not buy it below 1711 and you might wait for it to be crossed before buying it. Because, 1711 will be offer some resistance. You can find the proofs by checking the charts of many stocks. So, watch out for the PE multiples. It might help you.

IMPORTANT: If you want to go against the trend, then you should go for it only if the risk reward ratio is "VERY VERY attractive".

Regards,

Sam

[ragarwal]

thnx alot sam now plz do us one more favour though its very difficutc n exlpain with an examle how you fit in all these indicatrs n draw d conclusion,doing it with charts will be extra helful to all of learners.