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Trend Determination Methodolgy for Nifty and Stocks |
sairanga19
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Joined: 28 Nov 2009
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Post: #31  Posted: Sun Feb 05, 2012 5:00 pm Post subject: |
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Mr.rameshraja
thanks for ur reply |
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sairanga19
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Joined: 28 Nov 2009
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| Post: #32 Posted: Sun Feb 05, 2012 5:07 pm Post subject: Re: Trend Determination Methodolgy for Nifty and Stocks |
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| ajeya12 wrote: | | rameshraja wrote: | Trend Determination Methodolgy
I use this simple method to find the trend of the market, be it Nifty or stocks. I use this simple statistical output as an additional tool to my Chart Analysis to find likely Support and Resistance Levels and its not Grail.
I use End of the day data for daily trading and use weekly and Monthly datas for Swing trading.
Let me explain below, an example for Day Trading and same method can be used for Weekly and Monthly, for Swing Trading:
I take Previous Day Open / High / Low / Close of officially announced figure from Exchange.
Weighted Average = (HIGH + LOW+ CLOSE +CLOSE ) DIVIDED by 4.
Spread : High Minus Low.
To calculate,likely Support and Resistance Levels, the following ratios of Fibonacci to be used.
13 / 23.60 / 38.20 / 50 /61.80 / 78.60 / 88.60 / 1.00 / 1.130 / 1.236 / 1.382 / 1.500 / 1.618 / 2 / 2.236 / 2.618 / 3.140 / 3.618 / 4.236
Calculation:
Spread multiplied by all the above ratios and added to Weighted Average. This will give different Levels of Resistance and when deducted from Weighted Average it will give Various Support levels of above ratios.
How to use the above Levels:
Nifty or Stock has the tendency to face stiff resistance around 23.60% and by stretching it can move to 38.2% and 50%. So also, will try taking Support at these levels on downside. The trend of the day will be determined when it breaks 61.80%.
If it breaks 61.80% of Resistance Level, then wait for the market to pullback to 38.20% and make Long entry with Stop placed a few ticks below 23.60%. and look for Targets of 1 to 1.382 and 1.618 of Expansion Levels. If the day, happens to be very bullish/ bearish, it can move to 2 and above ratios.
Same is exactly true for Shorting the Nifty or Stocks when it breaks 61.80% with the above mentioned method for long entry.
What if Stop of 23.60% stop is takenout:
I quit the trade once if Stop is takenout, and look for bounce to 50% ratio, to takeup reversal trade and go along with the flow of market, taking stop at few ticks above 61.8% or look at chart to keep Stop.
Once when stop of 23.60% is takenout, Market has the tendency to bounce once again closer to 50% and move to test Weighted Average Price and the levels on the otherside.
When you have these levels along with Chart, you will invariably find market facing resistance and Support at 38.2% and it will not be so easy to clear 61.80% so easily, as one of the breeds “BULL or BEAR” need to wrest control for the direction of trend.
During the day, if market doesn’t break 61.80% on anyside, then I assume market is in sideways and whenever it happened like this, I have only incurred loss on that in my trading as my trades get locked in stops.
I use 5 minutes chart with 125 SMA and 30 minutes chart with 34 EMA. I invariably find the Support or Resistance coming closer to 38.2% and wait for breakout.
Spread is a vast subject and fairly very accurate methodologies can be derived and no Professional trader across the Globe speak about this in any public domain and their Spread methodologies are kept close to their heart.
I have explained to you a simple methodology using the Spread, and there are very powerful methods using the Spread can be done.
I use the above method for Day Trading and I use weekly and Monthly data for Swing Trading.
Trade Well and follow the trend !!
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Ramesh raja ji,
Very good ,successful technique u have shared with us, the fellow traders...but this comes with experience. hats off u shared   |
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imbst
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Joined: 23 May 2010
Posts: 86
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| Post: #33 Posted: Sun Feb 05, 2012 7:39 pm Post subject: |
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Bhai Log, May you please guide, if data should be of Nifty Future or Nifty Spot.
Looking for reply.
Best Regards |
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vinst
Black Belt
Joined: 09 Jan 2007
Posts: 3303
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| Post: #34 Posted: Sun Feb 05, 2012 7:45 pm Post subject: |
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| akhterasif1 wrote: | Bhai Log, May you please guide, if data should be of Nifty Future or Nifty Spot.
Looking for reply.
Best Regards |
if u want to trade futures, use futures data.
if u want to trade in cash market, take spot data.
nifty has no cash market trading, so use futures data to be used to trade in nifty futures. |
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rameshraja
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Joined: 24 Nov 2006
Posts: 1121
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| Post: #35 Posted: Sun Feb 05, 2012 8:00 pm Post subject: |
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Mr Vinst
I suggest, you use this tool as an additional one to your chart analysis and not as an standalone methodology.
Good luck !! |
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rameshraja
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| Post: #36 Posted: Sun Feb 05, 2012 8:02 pm Post subject: |
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Mr Srikanth
Thanks.. Trust yourself and Mr Manish Agarwal must be doing great. |
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jyothi2011
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Joined: 10 Oct 2011
Posts: 81
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| Post: #37 Posted: Sun Feb 05, 2012 9:14 pm Post subject: |
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| good ta |
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bsarkar
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Joined: 18 Oct 2011
Posts: 5
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| Post: #38 Posted: Sun Feb 05, 2012 11:27 pm Post subject: |
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The hard work , so simple explained! Great job! Thank u a lot.  |
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svkum
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Joined: 14 Feb 2007
Posts: 321
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| Post: #39 Posted: Sun Feb 05, 2012 11:58 pm Post subject: |
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Dear RR sir ,
yes i remember yu had explained this very strategy , its get refreshed now .
thanks for the same. |
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rameshraja
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Joined: 24 Nov 2006
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| Post: #40 Posted: Mon Feb 06, 2012 12:09 am Post subject: |
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Mr Svkum
Pranam sir.. I think you are referring to Spread trading which I was talking about in shout box a few years back.
That method was to do momentum trade based on a single 30 minutes bar spread, added to High for long trade and deducted from Low to trade for short.
This is about finding trend of the day, and the spread is calculated on Fib ratio, and added / subtracted to Weighted Average of the previous day. |
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seshareddy
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Joined: 06 Jan 2009
Posts: 95
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| Post: #41 Posted: Mon Feb 06, 2012 4:59 am Post subject: |
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RR sir
nice calculations and simple also
seshareddy |
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umesh1
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Joined: 24 Nov 2008
Posts: 1974
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| Post: #42 Posted: Mon Feb 06, 2012 12:00 pm Post subject: |
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Thanks Ramesh Sir
Your strategy worked great with gann today spreads were buy abv 5386 and sell belo 5270,0.38 was 5364
helped to achieve tgt in sell n buy as well
Thanks |
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jyothi2011
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Joined: 10 Oct 2011
Posts: 81
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| Post: #43 Posted: Mon Feb 06, 2012 4:07 pm Post subject: |
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| RR sir as per yesterdays nos. weighted avg was 5310 and spread was`93. .382 and .618 levels are 35 and 57 now supp and res. levels r 5365 & 5253 and 5345 & 5367 respectively. Since today was a gap up we should sell below 5367 with 5345 as tgt. am i right? pls |
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svkum
White Belt
Joined: 14 Feb 2007
Posts: 321
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| Post: #44 Posted: Mon Feb 06, 2012 6:29 pm Post subject: |
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ATR for 7 days can be treated avge spread for previous 7 days .
so ATR with parameter 7 can be indicative fig. |
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