Elliot's Impulse waves.(Part-5)
IMPULSE WAVES :- The Basics Waves that move the market in the direction of its main trend either up or down are called Impulse waves. 1....
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5010-5039 supply zone proved a ST resistance. 5002 proved a break down point. 4945 to 4982 proved a corrective rise, monitored with an ...
15 comments:
I am new to this blog, Can you guide me how to read your Trade range given today morning like below..
Aggressive Trade
Trade (5130)5150-5165 to 5200 - 5210
Thanks,
Prasanna
Dear Avinash & Sathesh,
I have explained about my work on Option pain in my blog http://stockpatternz.blogspot.com/
It is a new concept let us test it for some more days and see whether we can use it as a real tool for trading.
Thanks
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Hi Vinod Dhandapani,
I read all ur blog data, ur analysis is good.
But why u r selling option all the time.
When u r selling optiion ur risk is unlimited whereas ur reward is limited. If u stick to only sell, ur loss(may be 1 time out of 3) will be very big.
Option is best profitable when u r with momentum & bought a lower price option.
For example, in current positional long (taken above 5010 at 23rd dec). It was easy as we gap up above 50 ema & 50 dma at early morning, that was support(with 5000) for long@5010.
That day 5100CE was highest traded option in NSE(prof option traders used it), it jumped from Rs 18 to 87 closed at 84.50, next day made a high 116.
That is the power option trading.
1. U hv to predict a sure big move near expiry,
2. Ur stop loss will be minimum like long @5010, crucial support just 20 pt below.
3. U hv to buy lower price option with big volumes.
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Thank u very much for ur excellent effort.
Best Regards.
Hi dear sir ilango
plz update bank nifty TA and EW in yr stock wealth blog
regards
Another disadvantage of selling option is:
u need a very big capital.
Two lots option like
Sell 4900 Put Price - 21
Sell 5200 Call Price – 13
Required all most same capital(that capital will be locked for 7 or more days) as two lots of nifty futures with of maximum gain 34.
Obviously that is not the power of option.
The Power of Option Trading is when u buy
10 lot[500] @Rs 18 = Rs 9000 and sell it @Rs100 [500] = 50,000
That is the power of option trading.
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Best Regards.
Hi Indian,
Im selling Option coz im entering the trade 5 days b4 expiry. im not comfortable buying @themoney option coz of time value, buying out of money option wud have resulted in loss as i've sold outofmoney option and so far profited 145 pts. thx 4 ur input i'll also consider one more position 4 buying.
Moreover i can't track the markets all the time as im working in s/w company. the purpose of my research is if it works out, i can take a position 5 days b4 expiry and earn some money without much effort.
One thing we have to watch closely is in 4 out of 6 months when op pain is 'x' 4 days b4 expiry nifty ended up +/- 100 from 'x'....this is more useful.
thx 4 suggestion and sorr 4 wasting the space.
Hi, Vinod Dhandapani,
u r not wasting the space, ur analysis is very interesting.
I m really very sorry if u think so & Begging for Forgiveness from u.
I m just giving my view as a professional option trader to help readers and friends here.
If we can share our experience & researches (like u) freely here to help others, that will be best tribute to ilango sir's effort.
Pls don't mind & carry on with ur research update.
Best Regards.
Hi, Vinod Dhandapani,
I appriciate ur effort again at
stockpatternz.blogspot.com & here.
Dear Illango,
Can u pls send the updated excel sheet at sunilsehgal2002@yahoo.co.in.
regards,
Sunil
Hi Indian,
Sorry I said 'wasting sapace' bcoz long comments about option pain..I really need a lot of input from you guys to develop a trading system based on options....
Thx
Hi..Prasanna,
Trading the levels: Read thru' "Always start trading with these" at the top of this blog and you will get the idea of using these levels.
Hi..Vinod,
My experience with options:
Basic: Write option at the start of the series.
Buy options towards the end of the
series.
Most basic: Write options in a sideways or a
corrective phase.
Buy & Hold in a trending market.
There are many "combination strategies" for the large money players such as Straddle, strangle, etc.
Finally it all comes down to "Judging the market correctly" and then employing the correct option strategy. So the Major part is "Figuring out the market's next 7-15 days move".
FROM:-http://www.sudarshanonline.com/
Wednesday, December 30, 2009
What is a Leading Indicator
Mario writes:
"how do you derive leading indicators for any chart? I have been reading John Murphy, but whatever he says as leading indicators (like MACD) have now turned out to be laggging indicators. Kindly help"
Interesting question.
Investopedia defines this as: "A leading indicator precedes price movements, giving them a predictive quality, while a lagging indicator is a confirmation tool because it follows price movement. A leading indicator is thought to be the strongest during periods of sideways or non-trending trading ranges, while the lagging indicators are still useful during trending periods. "
Therefore, a leading indicator is useful during trading ranges. Now, how do we know that we are in a range? This information is available only after some time has elapsed. So, we start using leading indicators after we perceive that prices are in a trading range. It is possible that the range may be getting over by the time we decide to use leading indicators. Therefore, a leading indicator may finally result in a whipsaw. All in all, there is confusion.
Since most indicators are derived from price, they cannot step ahead of price and predict it. Predicitve indicators must be non-price methods, like Fibonacci, Cycles, Waves. These tools use price as one of their inputs, while MACD, RSI and so on use price as their ONLY input.
For this reason, Fibonacci, waves, cycles are much in demand because they have this quality of telling us what future prices will be (If they are correct!). It follows that most of the time, these tools are not correct.
With indicators, leading indicators identify turning points, essentially acting as cycles.
How about this: If you perceive a trend has started, use lagging indicators like Moving Averages, MACD. If you assume we are in a trading range, use leading indicators like RSI, Stochastics, MACD. Yes, MACD can be used both as trend following and as a method to identify 'overbought' and 'oversold' levels. At turning points, you will get chopped, but there will be many trades where you will make money. Finally, your profits should exceed your losses. Think about it.
Posted by Sudarshan Sukhani at 7:22 PM 0 comments
Labels: Futures Trading Strategy, Online Day Trading
Reply to Manoj Isaac G,
Which are best momentum indicator according to TA?
Best indicators for momentum are
1. ADX(Avg directional index)
An indicator used in technical analysis as an objective value for the strength of trend. ADX is non-directional so it will quantify a trend's strength regardless of whether it is up or down. ADX is usually plotted in a chart window along with two lines known as the DMI (Directional Movement Indicators). ADX is derived from the relationship of the DMI lines.
Analysis of ADX is a method of evaluating trend and can help traders to choose the strongest trends and also how to let profits run when the trend is strong.
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2. TRIN (TRIN stands for TRaders' INdex)
A ratio of 1 means the market is in balance; above 1 indicates that more volume is moving into declining stocks; and below 1 indicates that more volume is moving into advancing stocks. This indicator was developed by Richard Arms.
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3. Commodity Channel Index (CCI)
The Commodity Channel Index (also known as CCI) is a momentum indicator that was first introduced by Donald Lambert in 1980. It can be used either as an oscillator showing overbought and oversold levels, or as a trend indicator showing the beginning and end of trends. The CCI is calculated using the price, a simple moving average of the price, and a standard deviation around the price. The CCI displays the difference between the price and the simple moving average as a momentum line oscillating around a 0 (zero) line. A scaling factor is also used (0.015 by default), so that most of the values are between 100 and -100.
The CCI is used in several popular trading systems, and therefore has many different ways that it can be used in trading. It can be used as an oscillator, to identify an overbought level when the CCI is above 100, and an oversold level when the CCI is below the -100 line. The CCI can also be used to identify the beginning of a trend when the CCI crosses above the 100 line or below the -100 line, and the end of a trend when it crosses back over the line. The CCI is also used as a pattern indicator, where trades are entered and exited based upon the patterns created by the momentum line, and trend lines are drawn on the CCI instead of the prices.
4. Aroon
Aroon is a technical analysis indicator that was developed by Tushar Chande in 1995. Aroon is a sanskrit word meaning dawn's early light, and the Aroon indicator is so named because it it is designed to signal the beginning of a new trend. Aroon consists of two lines (known as Aroon up and down) which oscillate between 0 and 100 (usually in opposite directions).
This indicator is not available in all trading softwares so I m giving the calculation behind it (if anyone wish to develop a system using it)
Calculation
Description: Aroon up (AU) is calculated as the number of bars that have elapsed since the most recent highest high (HB), and Aroon down (AD) is calculated as the number of bars that have elapsed since the most recent lowest low (LB), as a reverse percentage of the total number of bars (X).
Calculation:
AU = ((X - HB) / X) x 100
AD = ((X - LB) / X) x 100
Example:
If the total number of bars is 10, and the most recent bar is the highest high, Aroon up would be calculated as follows:
AU = ((10 - 0) / 10) x 100 = 100
Trading Use
Aroon is most often used to indicate the start of a new trend (i.e. a change of direction), and as an indication of the strength of the current trend. A new trend is indicated by the Aroon up and down lines crossing over each other. The strength of the current trend is indicated by the Aroon up and/or down lines being at or near 100 (which shows that the most recent bars have made new highs or lows).
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5. ilango sir's,
HIGH EMA 5 & LOW EMA 5.
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And last the only one advance momentum indicator: Boillenear band.
Best Regards.
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