A quote to remember .......

Here is a quote taken from Mr. Glenn Dahlen from Facebook …………

 

“ Finding a trading methodology is like digging a hole. You try to dig the best damn hole you can. If it isn't "perfect" you don't throw all the dirt back in the hole and start over.”

Elder Type Trade : A Recap

On Monday the 15.7.2013 , TataSteel opened with a gap down  @ 254.50. When I see that, I refrained from buying and decide that the best buy point will be above 260. Frankly I didn't expect it to gap down and go under 255. I then again searched on the net for any news that may drag the stock down.And yes I found  one that may be the possible reason. Tata Steel's European section , formerly known as Corus has reported a £ 1.2 billion loss for the year. That information may leaked well before and could be the reason of the stock's long downtrend. In the next two days  TataSteel has come down even more and closed @ 243.20. The Impulse on weekly chart has again turned red , and daily chart is showing a red sign as well. 

A fresh Elder type trade is developing

Spotted this trade last night. Tata Steel is one of the prestigious companies in India. From the very beginning  of 2013 it started a downtrend which is still continuing. It has given up about 40% of its value ever since. Why do you we want to buy a stock that is in a downtrend ? Because It has started to show some signs of trend exhaustion. After searching the net I have found no bad news about the stock except one. TCS has replaced Tata Steel as India's most admired company. 

Counter Trend Trading ....A useful tool

Dr.Elder

It was a time when the cold war between Soviet Union and United States at it's peak. A Russian army ship was passing near the coastline of Africa in the middle of the night. Everyone in the ship was either relaxing or sleeping after a hard day, except one. A Russian Army doctor, a Psychiatrist, has something in his mind that nobody knew in the ship. He was about to flee. When the  time was right , he jumped off of the ship and started to swim towards the beach. Soon enough his companions become aware and followed him. Luckily he could manage to make it to the United States embassy and got a political asylum. He was only 23 at that time. Later he became a well known mentor and writer of many successful books about trading like "Trading For a Living " , "Come into my trading room " , "Sell and Sell short " etc. Yes, I am talking about Dr. Alexander Elder.  

Trend Trading tool No 2

Mr. Jim Berg

Jim Berg , again an Australian trader, won "Personal Investor" magazine trading competition in 2002. It was a difficult time to trade, yet he managed to make a handsome profit. Later on, in the February 2005 issue of the magazine "Technical Analysis of Stocks And Commodities", he revealed the strategy he used in the competition, with the title "The truth About Volatility " . I have given a link to the original article at the end of the post. Jim has more than 30 years of trading experience under his belt. Those, who like to follow trends ,It could be a good strategy to use.The analysis should be started in weekly chart. It is important to determine whether the stock is in an up trend in weekly chart or not. If it is , then we will go to the daily chart and try to find an entry point. If the higher time frame is trending up then the chance of success is greater.  Now, how can you spot an up trend? Just look for three sings on the chart.

Trend Trading tool No.1

Mr. Daryl Guppy

Many Successful traders say that trend following is the most effective and easiest way to make money in the marketplace. Swimming against the stream wont get you anywhere. It is with the stream you can cover a large distance with relatively little time and effort. The famous turtle traders made large sum of money by following trends. Ed Seykota is another legendary trader who did the same. Statistics has shown that trend lasts only 15% to 30% of the time , so 70% to 85% of the time market remains trendless. A trend trader will be stopped out frequently but when he catches a good trend , all his losses will be covered , and then he will make profit. The edge in this type of trading is not in correctly predicting the move but how religiously the trader is following his system. If you doubt your signal and don't take the trade, it may end up being a large trend and lock you out of profit. Another type of trend trading is also very popular, It is called "Pullback Trading". When a stock goes up or down , it never goes like a straight line , instead moves in a zigzag fashion.

Trend or Counter trend ?

There is an age old battle between these two type of traders. Trend followers wait for the signal of a new trend , jump in when they get it and ride  through towards the end of it , or at least try to , and get off when their indicators flash a sell signal. On the other hand , counter trend traders love bottom fishing. They speculate on trend exhaustion , when they spot a trend showing signs of slowing down and ready to turn

Secret of successful trading

When it comes to trading , the analysts usually belong to two camps, fundamental and technical. Technical analysis is relatively new than it's older counterpart and many young traders fall in love with this type of analysis. They buy a charting software or download a free version from the net and start building indicators that will predict the price with 100% accuracy which will help them to be a billionaire in no time. Of course,