iCharts Discussions

[akpanicker]

No of course I don’t mean ‘that’…..what I mean is the practice of trading purely on the basis of price action to the strict exclusion of any other information like indicators etc.

Nowadays I suppose it is quite fashionable to say that all indicators are useless and a price chart is all that is required to trade. It is quite possible that many of those who say this have burnt their fingers badly, having reposed their faith on the powers of indicators to predict the market or in giving exact entry and exit points, But these people remind me of a doctor who says I make diagnosis only by looking at the patient and I do not rely on any test results….they are often contradictory and afterall the tests are conducted on the body only …so I had better look directly at the body. Well another analogy that comes to mind is the use of plastic….initially when plastic was invented it was deemed the most wonderful thing….but now almost everyone says it is a menace……still I don’t think we can do away with the use of plastic anytime soon.

Here again the fault is not with the use of indicators….but what we expect out of it. Just as a doctor would be able to make a better judgement along with the test results…..the use of indicators would enable us to take better decisions when it comes to make an entry or exit. My favourite indicators are the old war horses – macd, stochastics and bollinger band . My trading decisions are based on price behaviour around reference levels established by prior price action. …but the use of indicators enables me to view that price action in a better perspective . For example I would be much more comfortable in taking a break out failure trade while there is a divergence in the indicators than if I were watching only the price chart. The problem is that you cannot computerize the use of indicators very effectively….what I mean is , it takes application of mind and discretion in deciding what a given indicator is telling , and also how to interpret the results when different indicators are giving differing views…..it is not easy to put that into a computer program…..you need to acquire that experience the hard way.

[jk_kundu]

One should not blame the indicators, that totally depends on the movement of the price, Practically Indian market is 90% Manipulated, and this manipulation is done by the operators as they bringing FDI by deteriorating the Rupee value. Our regulators have less regulating authority, they only show the light after total incidence is completed.
Moreover this operators breaks the real indication of the indicators by insider trade with havoc up or down price transactions. You can see the real movement of the indicators by over ruling and neglecting that odd up/down price transaction.

[pkholla]

Panicker: Trading without indicators but only seeing price : is it naked? or blind?
From my understanding, suppose I own 500 SBIN and sell call options for 500 SBIN, or less, that is covered shorting. But selling such option without owning the share is naked shorting.
Cheers, Prakash Holla

[akpanicker]

@jk_kundu… thank you for the comment....the very idea of trading by the chart hinges on the belief that the demand and supply are reflected in the price action and it does not matter who is behind it.

@ pkholla……yes sir the official nomenclature of naked position refers to holding position in an option that is not covered by another……here the idea is trading by looking at a (naked ) chart that shows only the price movement ie without any averages or indicators etc.

No sir, I would not go so far as to say that it is akin to blind trading ( like say when you trade without any recourse to past price behaviour)…there are whole schools of trading out there who make a living trading just the price action….tape reading, pattern recognition etc.

In the above write up I was just sounding a caution to those who have totally given up on indicators in favour of price action…..that you may be missing out many insights that the indicators are capable of giving if only you could read them right. The question is – is it helpful to have them around – which I think it is – or is it just cluttering your vision and misleading you – in which case you are better off without it.

[pramsomc]

JK_KUNDU.... I M 200 % AGREE WITH YOU ,OUR MARKET IS MORE THEN 100 YRS OLD ,THIS TECHNICAL ANALYSIS CAME INTO PICTURE ONLY AFTER COMPUTERISATION OF MARKET TOOK PLACE. PERSONALLY I BELIEVE THAT TECHNICAL ANALYSIS IS VERY GOOD TOPIC TO DISCUSS,BUT ONE CANNOT DEPEND ON IT 100%.ALL OPERATORS HAVE VERY ADVANCE TECHNOLOGY,THEY ARE IN VERY GOOD POSITION TO ALL TYPES OF SIGNALS WHATEVER THEY NEED AT THE TIME OF MAJOR ACTION.TRADERS ARE TEMPTED TO BUY WHEN OPERATORS WANTED TO SELL & VICE VERSA.
LOGICALLY ALL INDICATORS ARE LAGGING BEHIND ACTUAL MARKET PRICE,HOW CAN ONE TRUST THTEM ?.MARKET DO NOT RUN ON CALCULATIONS ,OTHERWISE MAXIMUM NO. PEOPLE IN THE COUNTRY WOULD HAVE BEEN CONNECTED TO MARKET,IT IS NOT HAPPENED SO !

RGDS

PRAMOD

[veerappan]

May i come-in

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