"In fact as soon as I see a system developer speaking at a seminar about filtering with the ADX indicator, I start to wonder if this guy really knows what he is doing"
This is from "Trading Systems that work" , Thomas Stridsman.
1) "When comparing Figures 2.12 and 2.13, it is interesting to note that inclusion
of ADX resulted in inferior system performance. Although it is impossible
to draw conclusions from a single example, I offer it to readers
here as a caution flag. Just because data vendors or indicator developers
link two studies together does not necessarily mean their combination will
increase profitability."
Richard Weissaman: Mechanical Trading systems.
"Bollinger Bands with ADX Filter
Although I am certain that there are instances in which ADX improves the
performance of trend-following systems, in general I have found greater
success with this indicator as a filter for mean reversion systems. Here we
take the mean reversion Bollinger band system previously used and replace
the 200-day moving average filter with ADX. This removes the directional or
trend-following bias and replaces it with a filter that is intended to ensure a
nontrending market condition."
Richward weissman Mechanical trading systems
Note: Test your systems before u use them :)
Tuesday, June 26, 2007
Sunday, June 24, 2007
Donchian 20 day breakout Trading system with code
//License agreement for the code:
//You may freely redistribute this code in unmodified form.
//If you do make a profit using this code then you promise to donate the first
//500 rs to a charity for children.
//If you choose to redistribute a modified version of the code code
//then you must remove the license agreement from
//the code.
//The ideas here are not unique, they are simply a merger of Donchian breakouts with
//gann position sizing.
//gann says do NOT risk > 10% on a single position.
//donchian=20Day channel defines the trend.
//Important point: if you bet all your capital on individual breakouts you will go
//broke. Remember : diversification/risk management is important in the markets
//Copyright: Niftytraders
//Email: niftytradersinc@yahoo.com
Buy=C>Ref(HHV(H,20),-1);
Sell=C
SetPositionSize(risk/10*100,spsPercentOfEquity);
Here are the returns for a donchian 20 day breakout system with 10% risk per trade.. tested from 1994 to current.
Statistics
All trades Long trades Short trades
Initial capital 100000.00 100000.00 100000.00
Ending capital 2315906.21 2315906.21 100000.00
Net Profit 2215906.21 2215906.21 0.00
Net Profit % 2215.91 % 2215.91 % 0.00 %
Exposure % 85.30 % 85.30 % 0.00 %
Net Risk Adjusted Return % 2597.82 % 2597.82 % N/A
Annual Return % 28.22 % 28.22 % 0.00 %
Risk Adjusted Return % 33.08 % 33.08 % N/A
This is with brokerage of 0.2% per leg.
You can test with any setting you like up till 0.8% per leg
annual returns should remain > 20%
The testing was done on stocks from the futures segment from 1994-current
(reason for limited testing is that not all my spot data is split adjusted/bonus adjusted but my fno data is clean)
The big issue with donchian breakouts is that drawdowns are huge...
The max drawdown for this system is as high as 50%.
Hence trade at your own risk.
//You may freely redistribute this code in unmodified form.
//If you do make a profit using this code then you promise to donate the first
//500 rs to a charity for children.
//If you choose to redistribute a modified version of the code code
//then you must remove the license agreement from
//the code.
//The ideas here are not unique, they are simply a merger of Donchian breakouts with
//gann position sizing.
//gann says do NOT risk > 10% on a single position.
//donchian=20Day channel defines the trend.
//Important point: if you bet all your capital on individual breakouts you will go
//broke. Remember : diversification/risk management is important in the markets
//Copyright: Niftytraders
//Email: niftytradersinc@yahoo.com
Buy=C>Ref(HHV(H,20),-1);
Sell=C
SetPositionSize(risk/10*100,spsPercentOfEquity);
Here are the returns for a donchian 20 day breakout system with 10% risk per trade.. tested from 1994 to current.
Statistics
All trades Long trades Short trades
Initial capital 100000.00 100000.00 100000.00
Ending capital 2315906.21 2315906.21 100000.00
Net Profit 2215906.21 2215906.21 0.00
Net Profit % 2215.91 % 2215.91 % 0.00 %
Exposure % 85.30 % 85.30 % 0.00 %
Net Risk Adjusted Return % 2597.82 % 2597.82 % N/A
Annual Return % 28.22 % 28.22 % 0.00 %
Risk Adjusted Return % 33.08 % 33.08 % N/A
This is with brokerage of 0.2% per leg.
You can test with any setting you like up till 0.8% per leg
annual returns should remain > 20%
The testing was done on stocks from the futures segment from 1994-current
(reason for limited testing is that not all my spot data is split adjusted/bonus adjusted but my fno data is clean)
The big issue with donchian breakouts is that drawdowns are huge...
The max drawdown for this system is as high as 50%.
Hence trade at your own risk.
Tuesday, June 19, 2007
2:30 factor
Atleast 5 different people have approached me to test out a 2:30 system
(Buy strongest stock at 2:30 use small stops, cover at close)
Refer to old post:
http://fnocharts.blogspot.com/2007/05/ideas-from-wd-gann.html
This system has been working in the past 200 days or so
Historically speaking this technique has not worked.
But lately its been working like magic, Reason??
We are in w5s on some degrees so we are overbought.
Bulls are piling up on anything that breaks out!! There is not much that is breaking out! Too much money chasing too few stocks.
Refer to old post (clash of the titans)
http://fnocharts.blogspot.com/2007/04/clash-of-titans.html
This buy anything that flies mentality is recent. People are ignoring diversification/fundamentals/A group/nifty because there are huge components of Nifty that are underperforming (auto/IT)
If i test the 2:30 system over last 200 days the results are almost as good as some of my other systems.
IF tested over last 2 years the 2:30 system fails, it doesn't even deliver returns matching buy+hold nifty. Use at your own risk :) (minor caveat the 2 year db is someone elses database: possible quality issues/ however keep in mind my emt systems (trend/countertrend) work on both sets of data equally well)
(Buy strongest stock at 2:30 use small stops, cover at close)
Refer to old post:
http://fnocharts.blogspot.com/2007/05/ideas-from-wd-gann.html
This system has been working in the past 200 days or so
Historically speaking this technique has not worked.
But lately its been working like magic, Reason??
We are in w5s on some degrees so we are overbought.
Bulls are piling up on anything that breaks out!! There is not much that is breaking out! Too much money chasing too few stocks.
Refer to old post (clash of the titans)
http://fnocharts.blogspot.com/2007/04/clash-of-titans.html
This buy anything that flies mentality is recent. People are ignoring diversification/fundamentals/A group/nifty because there are huge components of Nifty that are underperforming (auto/IT)
If i test the 2:30 system over last 200 days the results are almost as good as some of my other systems.
IF tested over last 2 years the 2:30 system fails, it doesn't even deliver returns matching buy+hold nifty. Use at your own risk :) (minor caveat the 2 year db is someone elses database: possible quality issues/ however keep in mind my emt systems (trend/countertrend) work on both sets of data equally well)
CNBC commentary
Raja: I want to meet all the cnbc commentators in one room.
Shake their hands one by one
and everytime I meet someone...
I want to repeat the phrase "You seem to have done well for yourself"
I wonder what the look on their faces would be like.
Only those who have cnbc turned on will get this joke.
Raja: why does cnbc use the phrase "has done well for itself"
maybe they don't want to say. Our 'operators' have raised the price to make the stock look attactive, please come and buy it now
P.S : Raja's sense of humour is inversely proportional to time spent trading.
Shake their hands one by one
and everytime I meet someone...
I want to repeat the phrase "You seem to have done well for yourself"
I wonder what the look on their faces would be like.
Only those who have cnbc turned on will get this joke.
Raja: why does cnbc use the phrase "has done well for itself"
maybe they don't want to say. Our 'operators' have raised the price to make the stock look attactive, please come and buy it now
P.S : Raja's sense of humour is inversely proportional to time spent trading.
Sunday, June 17, 2007
Trend followers
I will not be active for next few months.
Few parting comments:
Trend followers might want to read
http://fnocharts.blogspot.com/2007/04/exactly-how-efficient-are-markets.html
A trend is created when there is a big supply/demand imbalance.
Usually helps if market is 'undervalued' or 'overvalued' to create a trend.
In the past few months market has been relatively flat.
We are perfectly balanced in funda terms p.e.g. of 1...
20% growth 20 p.e
Thats just my mathematics. Other more sophisticated funda investors might see things differently.
W5 insanity should take us to p.e.g of 1.3-1.6 p.e of 30-50 etc etc before I will even dare call the end of the bull market.
The trend will resume eventually. Keep in mind it is not uncommon for trend following systems to go flat for 2-5 months and give virtually no rewards to traders. This is the reason why I suggested spicing up one's trading with stuff like wolfe waves
Just be careful with wolfe waves.. A wolfe wave can often show up in places where an inv hns is also showing up and that makes me worry. Only one of the two patterns will succeed :).
Past 50 days : brute force trend following methods like 13 ema or 7/105 etc would be flat or making losses.
Traders will need more sophistication than a simple brute force approach of trend following in a lazy market to make money.
My optimized systems based on realtively efficient markets are actually performing just fine, up 10-15% even with market flat over past 50 days (system drawdown 2-5% intraday drawdown 3-5%). So My 'optimized' systems are still operating well within their expected parameter range.
Note: I always use returns without leverage.
Ex. recent buy call on litl even with market down?? Did not hit sl on closing basis
even srf is struggling but holding levels.
Both calls were sent on yahoo.
Will try to take a position in srf soon..
Still looking for 200-220 in srf from 150-155
Already booked once near 176 earlier.
Few parting comments:
Trend followers might want to read
http://fnocharts.blogspot.com/2007/04/exactly-how-efficient-are-markets.html
A trend is created when there is a big supply/demand imbalance.
Usually helps if market is 'undervalued' or 'overvalued' to create a trend.
In the past few months market has been relatively flat.
We are perfectly balanced in funda terms p.e.g. of 1...
20% growth 20 p.e
Thats just my mathematics. Other more sophisticated funda investors might see things differently.
W5 insanity should take us to p.e.g of 1.3-1.6 p.e of 30-50 etc etc before I will even dare call the end of the bull market.
The trend will resume eventually. Keep in mind it is not uncommon for trend following systems to go flat for 2-5 months and give virtually no rewards to traders. This is the reason why I suggested spicing up one's trading with stuff like wolfe waves
Just be careful with wolfe waves.. A wolfe wave can often show up in places where an inv hns is also showing up and that makes me worry. Only one of the two patterns will succeed :).
Past 50 days : brute force trend following methods like 13 ema or 7/105 etc would be flat or making losses.
Traders will need more sophistication than a simple brute force approach of trend following in a lazy market to make money.
My optimized systems based on realtively efficient markets are actually performing just fine, up 10-15% even with market flat over past 50 days (system drawdown 2-5% intraday drawdown 3-5%). So My 'optimized' systems are still operating well within their expected parameter range.
Note: I always use returns without leverage.
Ex. recent buy call on litl even with market down?? Did not hit sl on closing basis
even srf is struggling but holding levels.
Both calls were sent on yahoo.
Will try to take a position in srf soon..
Still looking for 200-220 in srf from 150-155
Already booked once near 176 earlier.
Friday, June 15, 2007
No major updates for next 3 months
Have to pack up stuff in germany etc.
Will be busy, so no regular updates. Just erratic posts if/when I get time.
Nifty 4100 support 4200-4240 res
can touch 4400-4600-4900 if tech rallies.
otherwise trouble
downside??
4040? 3990/3960/3900.... 3556? i don't know
haven't seen any major downside below 4100 yet.
Go back to old post on risk/reward @ 4100 etc.
elwave might be signalling buy setups now
I don't really care what nifty does, i am investing in my midcaps
Will short fno every day if anything looks weak
but I will keep accumulating in delivery.
prithvi 265.. p.e < 6
same with aftek
thats all i can see right now :).
When I see low p.e with high growth I usually think 100% in 1-2 years.
Maybe I should wait for results to buy more.. perhaps some bad news cooking hence the insane weakness.
Either that or market is just being stupid as usual.
Will be busy, so no regular updates. Just erratic posts if/when I get time.
Nifty 4100 support 4200-4240 res
can touch 4400-4600-4900 if tech rallies.
otherwise trouble
downside??
4040? 3990/3960/3900.... 3556? i don't know
haven't seen any major downside below 4100 yet.
Go back to old post on risk/reward @ 4100 etc.
elwave might be signalling buy setups now
I don't really care what nifty does, i am investing in my midcaps
Will short fno every day if anything looks weak
but I will keep accumulating in delivery.
prithvi 265.. p.e < 6
same with aftek
thats all i can see right now :).
When I see low p.e with high growth I usually think 100% in 1-2 years.
Maybe I should wait for results to buy more.. perhaps some bad news cooking hence the insane weakness.
Either that or market is just being stupid as usual.
Thursday, June 14, 2007
Favorite TF
Raja: dhiraj sood: sir not clear which time frame u feel easy for day trading
dhiraj sood: 10.20 .30 hourly
Raja:
dhiraj sood: ji
Raja: start with weekly divide by 5 into infinity
i get this question a lot....
this is basic elder/fractal market theory
Raja: once again, favorite tf?
start with weekly, divide by 5 into infinity
got it??
Raja: 1 week, 1/5 week=1 day , 1/5th day=65-70 mins, 1/25th day..............13-15 mins....
and u can go as low as u want as long as you RESPECT the higher tf trend
because the higher tf is the 'baap/father/parent' of the smaller tf.
it owns the smaller tf
The child can try to rebel but usually gets disciplined at certain areas :)
Read Alexander Elder...
dhiraj sood: 10.20 .30 hourly
Raja:
dhiraj sood: ji
Raja: start with weekly divide by 5 into infinity
i get this question a lot....
this is basic elder/fractal market theory
Raja: once again, favorite tf?
start with weekly, divide by 5 into infinity
got it??
Raja: 1 week, 1/5 week=1 day , 1/5th day=65-70 mins, 1/25th day..............13-15 mins....
and u can go as low as u want as long as you RESPECT the higher tf trend
because the higher tf is the 'baap/father/parent' of the smaller tf.
it owns the smaller tf
The child can try to rebel but usually gets disciplined at certain areas :)
Read Alexander Elder...
Wednesday, June 13, 2007
Totally random blurb :)
When you use ewt too much
you start seeing 5-7-9 everywhere
:)
The ability of an ewt expert drops significantly when he/she is not able to see the simpler 5-7-9/3 structures
so I suggest studying elder for ema following
and neely for a more elaborate list of structures/rules .
http://scientificamerican.com/print_version.cfm?articleID=00010347-101C-14C1-8F9E83414B7F4945
Chunking Theory
In the 1960s Herbert A. Simon and William Chase, both at Carnegie Mellon University, tried to get a better understand-ing of expert memory by studying its limitations. Picking up where de Groot left off, they asked players of various strengths to reconstruct chess positions that had been artificially devised--that is, with the pieces placed randomly on the board--rather than reached as the result of master play. The correlation between game-playing strength and the accuracy of the players' recall was much weak-er with the random positions than with the authentic ones.
Chess memory was thus shown to be even more specific than it had seemed, being tuned not merely to the game itself but to typical chess positions. These experiments corroborated earlier studies that had demonstrated convincingly that ability in one area tends not to transfer to another. American psychologist Edward Thorndike first noted this lack of transference over a century ago, when he showed that the study of Latin, for instance, did not improve command of English and that geometric proofs do not teach the use of logic in daily life.
Simon explained the masters' relative weakness in reconstructing artificial chess positions with a model based on meaningful patterns called chunks. He invoked the concept to explain how chess masters can manipulate vast amounts of stored information, a task that would seem to strain the working memory. Psychologist George Miller of Princeton University famously estimated the limits of working memory--the scratch pad of the mind--in a 1956 paper entitled "The Magical Number Seven, Plus or Minus Two." Miller showed that people can contemplate only five to nine items at a time. By packing hierarchies of information into chunks, Simon argued, chess masters could get around this limitation, because by using this method, they could access five to nine chunks rather than the same number of smaller details.
you start seeing 5-7-9 everywhere
:)
The ability of an ewt expert drops significantly when he/she is not able to see the simpler 5-7-9/3 structures
so I suggest studying elder for ema following
and neely for a more elaborate list of structures/rules .
http://scientificamerican.com/print_version.cfm?articleID=00010347-101C-14C1-8F9E83414B7F4945
Chunking Theory
In the 1960s Herbert A. Simon and William Chase, both at Carnegie Mellon University, tried to get a better understand-ing of expert memory by studying its limitations. Picking up where de Groot left off, they asked players of various strengths to reconstruct chess positions that had been artificially devised--that is, with the pieces placed randomly on the board--rather than reached as the result of master play. The correlation between game-playing strength and the accuracy of the players' recall was much weak-er with the random positions than with the authentic ones.
Chess memory was thus shown to be even more specific than it had seemed, being tuned not merely to the game itself but to typical chess positions. These experiments corroborated earlier studies that had demonstrated convincingly that ability in one area tends not to transfer to another. American psychologist Edward Thorndike first noted this lack of transference over a century ago, when he showed that the study of Latin, for instance, did not improve command of English and that geometric proofs do not teach the use of logic in daily life.
Simon explained the masters' relative weakness in reconstructing artificial chess positions with a model based on meaningful patterns called chunks. He invoked the concept to explain how chess masters can manipulate vast amounts of stored information, a task that would seem to strain the working memory. Psychologist George Miller of Princeton University famously estimated the limits of working memory--the scratch pad of the mind--in a 1956 paper entitled "The Magical Number Seven, Plus or Minus Two." Miller showed that people can contemplate only five to nine items at a time. By packing hierarchies of information into chunks, Simon argued, chess masters could get around this limitation, because by using this method, they could access five to nine chunks rather than the same number of smaller details.
Tisco wolfe wave
Another wise quote which i like by balaji.
The trend is your friend until it 'bends'
The wolfe wave is a flexible pattern that can be used in both trend continuation/reversal scenarios (wolfe just reverses the ultra short term trend could either be with or against various trends of various degrees in various timeframes :)).
Go talk to a good trader.
First and foremost a good trader is an independent thinker.
A trader should be able to act in uncertain times. 50:50 or even worse.. hence a trader focuses on techniques like reward/risk to enhance returns.
Today's wolfe wave trade given short under 608 futures sl 614
target 596/590
subsequently targets were readjusted to account for risk management rules
1x risk at 602 cover half 2x risk at 596 cover full.
Raja: market is expected to stay range bound for god knows how long
i suggest everyone study some counter trend systems/patterns
http://www.traderji.com/technical-analysis/13372-wolfe-wave-rajas-knowledgebase.html
sent early morning
Raja: tisco sort of wolfe wave
3 day high 614.7 sl in futures res 608 target 600-595 area. lets see
Raja: gaya tisco
shorted on way up
Raja: now cover on way down 600-595 zone
Informed investing
everyone on yahoo at some point of time
will give wisecracks like
intelligent investing
pitfalls of emotional investing
someone will go quote buffet or soros or seykota and what not.
i have a query:
how many people have invested anything in this current decline?
even as nifty is declining , surely the fundamental value of a stock doesn't change?
its easy to talk big
tough to act when the market is getting trashed daily :)
90% of people on yahoo? trend followers/crowd following members of the herd.
I've been buying tcs, aftek, prithvi, gokex, litl.
Planning to buy srf soon, maybe jstainless.
and shorting in fno
suzie yesterday
tisco today
Won't short nifty because i don't like the idea of shorting a discount.
I have a whole list of funda stocks that needs to be sorted thru.....
GVK Power Infra
United phosphorous
WWil
GDL
Amtek India
Opto circuits
Jaiprakash associates
Mindtree
Nagarjuna Construction
Kalptaru power transmission
Elecon engineering
Moser Baer
Birla Corp
Kesoram industries
Prithvi information solution-----5.61
Gujrat Apollo industries- 8.82
Esab India –13.93
Subex azure
Hotel leela venture
Cesc
Marico
Jain irrigation
Jindal saw
Hikal –17.26
Electrosteel casting
Great offshore
Sintex India
will give wisecracks like
intelligent investing
pitfalls of emotional investing
someone will go quote buffet or soros or seykota and what not.
i have a query:
how many people have invested anything in this current decline?
even as nifty is declining , surely the fundamental value of a stock doesn't change?
its easy to talk big
tough to act when the market is getting trashed daily :)
90% of people on yahoo? trend followers/crowd following members of the herd.
I've been buying tcs, aftek, prithvi, gokex, litl.
Planning to buy srf soon, maybe jstainless.
and shorting in fno
suzie yesterday
tisco today
Won't short nifty because i don't like the idea of shorting a discount.
I have a whole list of funda stocks that needs to be sorted thru.....
GVK Power Infra
United phosphorous
WWil
GDL
Amtek India
Opto circuits
Jaiprakash associates
Mindtree
Nagarjuna Construction
Kalptaru power transmission
Elecon engineering
Moser Baer
Birla Corp
Kesoram industries
Prithvi information solution-----5.61
Gujrat Apollo industries- 8.82
Esab India –13.93
Subex azure
Hotel leela venture
Cesc
Marico
Jain irrigation
Jindal saw
Hikal –17.26
Electrosteel casting
Great offshore
Sintex India
Thursday, June 07, 2007
Strong stocks
Aban today up 2.7%
srf and litl holding 166-168 so far
srf/litl/aban/hindlever
beauty of buying @ support
support becomes res
u get break even exits..
reason is most declines in a bull market are of corrective nature and have significant overlap
Nifty : can't think of any gr8 reasons to be long unless
I was a bottom fisher buying the discount.
IT is also gaining in strength
Satyam/infy strongest
bank/autos still quite weak.
maybe lower inflation can help.
Here is the bigger problem with nifty.
Broken trendline
Broken swing low
Can take a while before the uptrend returns.
srf and litl holding 166-168 so far
srf/litl/aban/hindlever
beauty of buying @ support
support becomes res
u get break even exits..
reason is most declines in a bull market are of corrective nature and have significant overlap
Nifty : can't think of any gr8 reasons to be long unless
I was a bottom fisher buying the discount.
IT is also gaining in strength
Satyam/infy strongest
bank/autos still quite weak.
maybe lower inflation can help.
Here is the bigger problem with nifty.
Broken trendline
Broken swing low
Can take a while before the uptrend returns.
Questions with regard to brokerage
Question:
Why is the brokerage higher for delivery than for fno??
Are the costs of moving stocks in delivery around higher than for moving the futures around??
What is the cost to brokers/nse/sebi??
How much does an institution pay to nse/sebi for fno/spot?
What is the actual base rate??
Leave a comment if you have an answer.
I'm gonna go spam on traderji etc as well :)
Why is the brokerage higher for delivery than for fno??
Are the costs of moving stocks in delivery around higher than for moving the futures around??
What is the cost to brokers/nse/sebi??
How much does an institution pay to nse/sebi for fno/spot?
What is the actual base rate??
Leave a comment if you have an answer.
I'm gonna go spam on traderji etc as well :)
Brokerage rates
i am going to write a small paper on the benefits of lower brokerage for both traders and brokers
its basically about symbiosis.
instead of leeching and sucking a trader dry if a broker gives very very low rates and a trader has a system that can compound money. The brokerage will grow at an insane pace along with account equity
I sent the following msg to my rm who is working with indiabulls
I am going to work the example with rm/indiabulls structures
Raja: if i start with
0.5% delivery brokerage
my account equity = 10 lakhs
becomes 40 lakhs over say x years
net brokerage u get
based on average equity during those x years
15 lakhs * 1000 trades * 0.5%* 2 = 150 lakhs
if you charge me 0.1%
my account equity goes from 10 lakhs
to 12164 lakhs
your net brokerage
600 lakhs * 1000 trades * 0.1% * 2 = 1200 lakhs
the equation becomes twisted if there is a bare min that indiabulls will keep
and then it will share the remainder between rm and the
lets say the bare min that indiabulls wants is 0.1% delivery in that case
the rm will only earn in the first scenario , in the second scenario the rm is not making money
if indiabulls keeps lets say 0.05%
and the remaining brokerage it gives 1/10th to the rm as incentive
then in the first case
the rm gets 10% of 90% of 150 lakhs =13.5 lakhs
in the second case the rm gets 10% of 50% of 1200 lakhs = 60 lakhs..
Anyway i don't have exact ratios cutoffs incentives etc
but i am sure the numbers can be crunched to find exactly how much everyone will make.
I will post a detailed backtest report with diff brokerage rates on 2 systems
and illustrate net brokerage earned etc. later
its basically about symbiosis.
instead of leeching and sucking a trader dry if a broker gives very very low rates and a trader has a system that can compound money. The brokerage will grow at an insane pace along with account equity
I sent the following msg to my rm who is working with indiabulls
I am going to work the example with rm/indiabulls structures
Raja: if i start with
0.5% delivery brokerage
my account equity = 10 lakhs
becomes 40 lakhs over say x years
net brokerage u get
based on average equity during those x years
15 lakhs * 1000 trades * 0.5%* 2 = 150 lakhs
if you charge me 0.1%
my account equity goes from 10 lakhs
to 12164 lakhs
your net brokerage
600 lakhs * 1000 trades * 0.1% * 2 = 1200 lakhs
the equation becomes twisted if there is a bare min that indiabulls will keep
and then it will share the remainder between rm and the
lets say the bare min that indiabulls wants is 0.1% delivery in that case
the rm will only earn in the first scenario , in the second scenario the rm is not making money
if indiabulls keeps lets say 0.05%
and the remaining brokerage it gives 1/10th to the rm as incentive
then in the first case
the rm gets 10% of 90% of 150 lakhs =13.5 lakhs
in the second case the rm gets 10% of 50% of 1200 lakhs = 60 lakhs..
Anyway i don't have exact ratios cutoffs incentives etc
but i am sure the numbers can be crunched to find exactly how much everyone will make.
I will post a detailed backtest report with diff brokerage rates on 2 systems
and illustrate net brokerage earned etc. later
Worst picks in my investing career
Tvs motor 100 exit 90 odd
Dr.red
650/700/750
Cmp 650
Arvind 120(140 exit)/120 100 exit/70 (55 loss)/43(48 exit, 2x quantity) cmp 44 odd
book value 60-70 maybe?
If arvind splits into retail/textiles will result in value unlocking 70-100 rs per share
holding still. waiting for 70-80-100 in 1-2 years.
Up next?
Prithvi?
330/300/277/280/290 , still holding
cmp 280
aftek info 56/66/72 , still holding
cmp 71
gardensilk many years ago (this was not funda i made the mistake of following icicidirect call on this one without proper planning)
reco price 80, cmp 56 (2 years!!! thats massive underperformance and i am still holding book value is 88 i will only exit At or above book value)
If i am missing any of my other horrible trading or investment calls do leave a message.
We learn 10% from our successses and 90% from our failiures.
Making a mistake is what prevents us from making the same mistake again.
The mistake leaves you with a solid memory usually one involving pain and when confronted with a similar scenario your mind will make you imagine that pain before u even act to make that same mistake.
If you keep reducing your mistakes you will ultimately get better.
Just a matter of sticking with the game long enough.
While I seem like an impatient guy when I talk.
When I make up my mind I can have near infinite patience....
I have lots of other investing picks where I have suffered massive drawdowns
But I held on because the fundamentals were intact.
So prithvi/gokex/aftekinfo/litl planning to hold for one year unless fundas turn sour
Lets see where the market takes them.
Dr.red
650/700/750
Cmp 650
Arvind 120(140 exit)/120 100 exit/70 (55 loss)/43(48 exit, 2x quantity) cmp 44 odd
book value 60-70 maybe?
If arvind splits into retail/textiles will result in value unlocking 70-100 rs per share
holding still. waiting for 70-80-100 in 1-2 years.
Up next?
Prithvi?
330/300/277/280/290 , still holding
cmp 280
aftek info 56/66/72 , still holding
cmp 71
gardensilk many years ago (this was not funda i made the mistake of following icicidirect call on this one without proper planning)
reco price 80, cmp 56 (2 years!!! thats massive underperformance and i am still holding book value is 88 i will only exit At or above book value)
If i am missing any of my other horrible trading or investment calls do leave a message.
We learn 10% from our successses and 90% from our failiures.
Making a mistake is what prevents us from making the same mistake again.
The mistake leaves you with a solid memory usually one involving pain and when confronted with a similar scenario your mind will make you imagine that pain before u even act to make that same mistake.
If you keep reducing your mistakes you will ultimately get better.
Just a matter of sticking with the game long enough.
While I seem like an impatient guy when I talk.
When I make up my mind I can have near infinite patience....
I have lots of other investing picks where I have suffered massive drawdowns
But I held on because the fundamentals were intact.
So prithvi/gokex/aftekinfo/litl planning to hold for one year unless fundas turn sour
Lets see where the market takes them.
Technical analaysis
"Aquarius
January 20 - February 17
Surprising new developments in close friendships or love relationships could come your way today, dear Aquarius. Someone might move away, or perhaps move closer to you. This could prove to be a little unsettling at first, but once you get used to the idea you'll be happy. Social events and group activities could also bring unexpected events your way. Be prepared for some bombshells! On the downside: Expect some trouble with machines! "
Lets see. relationships: yes on a borderline relationship which needs to be cemented or broken in the next few days. (1 pt)
Social events hmm nothing there. (0 so far but the day is not over yet)
Be prepared for bombshells , thats easy in the stock market u always have bombshells... (1+ pt but cheesy comment easy to prove right )
Trouble with machines ?? Nope no trouble so far all systems working beautifully *touchwood* (nothing here, well my system hdd has been overactive past few days still haven't figured out which application is causing it.. yahoo 8 always crashes but thats a yahoo 8 specific issue which has plagued my system for months now: 7.5 was just fine.)
So score??
2 out of 4
50:50
Even with all this double talk accuracy only 50%
Also if you take the skeptic view then you would see that this general description could fit a lot of people..
Notice anything similar to the way technical analysts talk????
You say both up and down.
Here is my view about technicals. The money comes from the fundamental filter, its actually the fundamental part of technicals that makes money. The ones who don't see this are the ones constantly trying to turn gold into lead and lead into gold.
Nissan copper was probably a technical buy on listing... just kept breaking up
But people who chase lead and take it above and beyond the value of gold pay a price.. nissan copper listing day 40-120 then back to offer price 33 then lower 25!!!
Target is 50-80 in 2-3 years. (ipo will be used to fund capacity expansions, as and when capacity comes online it would be relfected in earnings and stock price. meaning we would hope that this reflection would be complete by the time the earnings are there even though it could very well happen much sooner or it could even take longer???? is it possible that the stock price might NEVER REFLECT THE ACTUAL VALUE OF THE STOCK?? DOES ANY TECHNICAL MASTER KNOW WHY FUNDAS WORK?? IF THE STOCK PRICE DOES NOT REFLECT THE IDEAL VALUE OF THE STOCK then IT IS A PRIME TAKEOVER CANDIDATE FROM OTHER COMPANIES IN THE SAME SECTOR!! or its a candidate for hedgefunds who can come in rip it to shreds and extract book value.)
Today's commentary:
Market opened gap down mind you I am roughly 3.5 hours behind Indian time.
Raja (6/7/2007 6:49:23 AM): index is maintaining 4170 area in spot until that is intact there is hope 4180 is the rising channel 10 pts width allowed. for stoplosses
Raja (6/7/2007 7:29:21 AM): 4240 sl for bears 4170 sl for bulls
Raja (6/7/2007 7:30:40 AM): 4220 profit booking for bulls if u went aggro long and 4180 profit booking for shorts market needs to prove strength by going above 4240 before the positional players will come back u have too many brokern trendlines right now i suspect shorts building 4213-4222 sl 4245
Raja (6/7/2007 7:38:16 AM): my suggestion is short now : 4210-4220 sl 4240 target 4180-4100 but i am not good at shorting nifty so make sure to get a second opinion
Nifty future = 4210 at this time.... (nifty future formed double top and started heading lower...
Raja (6/7/2007 8:05:40 AM): aban strength in a weak market can touch 2850-3000-3100 and what not, targets sent yesterday
Note:(aban was a bullish pick of yesterday @ 2750 , entry basis = 2700+ target 2850-3000-3100, today closed @ 2844 in futures even with a weak market)
Raja (6/7/2007 8:06:52 AM): a lone bull stock like aban is like a lighthouse in the storm lost bulls are attracted towards it every bull wants aban. since bulls are only good at buying a die hard bull will just not short he'll look harder for that bullish opportunity and if u look hard enough there is always a bear with a loss in a bull market even if nifty is down
Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 77/76/75 stil holding dunno what hll is doing support @ 192
Note:(aban was suggested as a buy 2700++ (also suggested as a buy 2300 area in a pullback or something)
Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 76/75 stil holding dunno what hll is doing
Raja (6/7/2007 8:24:54 AM): nifty sl @ 4213 nf break even for bears u don't want to lose extra pts in any discount reducing short covering rallies
Raja (6/7/2007 8:25:12 AM): litl will touch 167 leave limit order to reenter long in delivery
Note:At this time litl was at 174..
Raja (6/7/2007 8:25:43 AM): also 165 srf = reentry
Raja (6/7/2007 8:28:00 AM): Retracements :154.55-185.7 0.236:178.349 0.382:173.801 0.5 :170.125 0.618:166.449 0.764:161.901 i have my limit order 167 but no guarantees maybe 170 can hold?? dunno
Raja (6/7/2007 8:36:22 AM): trailing stop 4205 for bears. don't give away money to this market if we go up discount reduction will kill u if we go down your targets are 4180-4140-4100
Raja (6/7/2007 8:41:00 AM): litl few days ago good news top u want to see how selling good news works?? watch suzlon next 3 days sometimes good news tops can take 1-2 days for distribution depending on how big the news is and how crazy the public is 9:1 the news is already discounted and in the price and any excess rallies are speculative
Raja (6/7/2007 8:43:58 AM): lichsgfin another strong stock in a weak market these should be your picks for next nifty leg up they will fly up the most
Raja (6/7/2007 8:55:38 AM): nifty we will also buy but only after all weak hands are out weak hands have sl 4180/4140 nifty which is the obvious level. i want to buy 4100 sl 4090
Raja (6/7/2007 8:56:58 AM): 167 litl milega??
Raja (6/7/2007 9:00:54 AM): System: Trend follower Stock Name: LITL-I BuyStrategy: Buy between s1-s2 S1:167.10 S2:169.00 R1:179.44 R2:187.05 Target1:172.327 Target2:176.135 Target3:180.705 SL1:165.473 SL2:160.903
Raja (6/7/2007 9:27:35 AM): litl surgical strike 167-169 buy zone day low 168 area now 173
LITL dropped to support zone 167-169 in futures. and gave T1 as an intraday scalp trade. maybe in 2-3 days it will give 176+
Raja (6/7/2007 9:41:47 AM): 4180 target reached cover half??? rest 4140-4110?? or be greedy?
Nifty closed @ 4179.5
THAT MY DEAR FRIENDS IS THE ONLY REALITY (addressed to mr. sarvesh :))
THE LTP
THE CLOSE
LIVE WITH IT
Below 4170 4140/4100/4054 etc allowed.
but even in this weak market I can find bullish picks that will make money to the upside
technicals are an illusion; the driving force is fundamental in nature.
technicals only tell you what is happening.
fundamentals tell you why it is happening and how long it can continue.
litl 2010-2011; Will be worth 300-600 rs.
Write it down and remember me then..
Prithvi short term weakness?? It will be at 400-500 next year unless some fundamental disasters happen :)
Prithvi Heading to eod trendline, spotted by dhiraj , he finally gave me a picture that fits his name , the patient support is 275 , i'll buy 100 more there to complete my 1000.
(again notice the if/then else, the stock market is about probabilities and risk management)
Drawdowns are part of the game of investing
No risk, no reward.
That is the other reality of the markets.
People who are afraid to risk only talk talk talk.
They don't trade.
I bought prithvi
bought gokex
without any regard for index technicals.
prithvi is pure p.e/p.e.g pick
gokex is also p.e/p.e.g/leading exporter of garments
I can't always be right prithvi is one of those stocks
that just keeeeeps oooonnn stagnating.
you want a stoploss for investments??? stoploss 200 rs :)
if you bought at 300
target 400/500 in one year, sl 200
risk is 100 rs reward is 100/200 rs..
from a technical perspective i can justify just about any trade!!
In fact if i remember correctly even last time i reccomended prithvi @ 330+
IT has severely underperformed the markets. It only hit 410-420 area and not 448 as I had targetted.
Every stock has cycles of short/medium/long term under performance and out performance.
Contrary to popular belief stock prices do not go to + infinity and -infinity
Which is what the basic theory of trend following suggests..
Warren buffet, peter lynch, soros
Some of the biggest names in investing are all fundamental analysts+contrarians.
If you know what a stock is worth you can buy on the way down with a lot more confidence and still sleep easily
Star another good news short 2 days ago trashed today by 5%
after 5-10 hours of distribution.
Keep an eye on suzlon will also face profit booking within 5 hours (5 trading hours)
Litl faced profit booking @ 186... few days ago after good news and retested the support level I had given on the way up itself: 167
January 20 - February 17
Surprising new developments in close friendships or love relationships could come your way today, dear Aquarius. Someone might move away, or perhaps move closer to you. This could prove to be a little unsettling at first, but once you get used to the idea you'll be happy. Social events and group activities could also bring unexpected events your way. Be prepared for some bombshells! On the downside: Expect some trouble with machines! "
Lets see. relationships: yes on a borderline relationship which needs to be cemented or broken in the next few days. (1 pt)
Social events hmm nothing there. (0 so far but the day is not over yet)
Be prepared for bombshells , thats easy in the stock market u always have bombshells... (1+ pt but cheesy comment easy to prove right )
Trouble with machines ?? Nope no trouble so far all systems working beautifully *touchwood* (nothing here, well my system hdd has been overactive past few days still haven't figured out which application is causing it.. yahoo 8 always crashes but thats a yahoo 8 specific issue which has plagued my system for months now: 7.5 was just fine.)
So score??
2 out of 4
50:50
Even with all this double talk accuracy only 50%
Also if you take the skeptic view then you would see that this general description could fit a lot of people..
Notice anything similar to the way technical analysts talk????
You say both up and down.
Here is my view about technicals. The money comes from the fundamental filter, its actually the fundamental part of technicals that makes money. The ones who don't see this are the ones constantly trying to turn gold into lead and lead into gold.
Nissan copper was probably a technical buy on listing... just kept breaking up
But people who chase lead and take it above and beyond the value of gold pay a price.. nissan copper listing day 40-120 then back to offer price 33 then lower 25!!!
Target is 50-80 in 2-3 years. (ipo will be used to fund capacity expansions, as and when capacity comes online it would be relfected in earnings and stock price. meaning we would hope that this reflection would be complete by the time the earnings are there even though it could very well happen much sooner or it could even take longer???? is it possible that the stock price might NEVER REFLECT THE ACTUAL VALUE OF THE STOCK?? DOES ANY TECHNICAL MASTER KNOW WHY FUNDAS WORK?? IF THE STOCK PRICE DOES NOT REFLECT THE IDEAL VALUE OF THE STOCK then IT IS A PRIME TAKEOVER CANDIDATE FROM OTHER COMPANIES IN THE SAME SECTOR!! or its a candidate for hedgefunds who can come in rip it to shreds and extract book value.)
Today's commentary:
Market opened gap down mind you I am roughly 3.5 hours behind Indian time.
Raja (6/7/2007 6:49:23 AM): index is maintaining 4170 area in spot until that is intact there is hope 4180 is the rising channel 10 pts width allowed. for stoplosses
Raja (6/7/2007 7:29:21 AM): 4240 sl for bears 4170 sl for bulls
Raja (6/7/2007 7:30:40 AM): 4220 profit booking for bulls if u went aggro long and 4180 profit booking for shorts market needs to prove strength by going above 4240 before the positional players will come back u have too many brokern trendlines right now i suspect shorts building 4213-4222 sl 4245
Raja (6/7/2007 7:38:16 AM): my suggestion is short now : 4210-4220 sl 4240 target 4180-4100 but i am not good at shorting nifty so make sure to get a second opinion
Nifty future = 4210 at this time.... (nifty future formed double top and started heading lower...
Raja (6/7/2007 8:05:40 AM): aban strength in a weak market can touch 2850-3000-3100 and what not, targets sent yesterday
Note:(aban was a bullish pick of yesterday @ 2750 , entry basis = 2700+ target 2850-3000-3100, today closed @ 2844 in futures even with a weak market)
Raja (6/7/2007 8:06:52 AM): a lone bull stock like aban is like a lighthouse in the storm lost bulls are attracted towards it every bull wants aban. since bulls are only good at buying a die hard bull will just not short he'll look harder for that bullish opportunity and if u look hard enough there is always a bear with a loss in a bull market even if nifty is down
Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 77/76/75 stil holding dunno what hll is doing support @ 192
Note:(aban was suggested as a buy 2700++ (also suggested as a buy 2300 area in a pullback or something)
Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 76/75 stil holding dunno what hll is doing
Raja (6/7/2007 8:24:54 AM): nifty sl @ 4213 nf break even for bears u don't want to lose extra pts in any discount reducing short covering rallies
Raja (6/7/2007 8:25:12 AM): litl will touch 167 leave limit order to reenter long in delivery
Note:At this time litl was at 174..
Raja (6/7/2007 8:25:43 AM): also 165 srf = reentry
Raja (6/7/2007 8:28:00 AM): Retracements :154.55-185.7 0.236:178.349 0.382:173.801 0.5 :170.125 0.618:166.449 0.764:161.901 i have my limit order 167 but no guarantees maybe 170 can hold?? dunno
Raja (6/7/2007 8:36:22 AM): trailing stop 4205 for bears. don't give away money to this market if we go up discount reduction will kill u if we go down your targets are 4180-4140-4100
Raja (6/7/2007 8:41:00 AM): litl few days ago good news top u want to see how selling good news works?? watch suzlon next 3 days sometimes good news tops can take 1-2 days for distribution depending on how big the news is and how crazy the public is 9:1 the news is already discounted and in the price and any excess rallies are speculative
Raja (6/7/2007 8:43:58 AM): lichsgfin another strong stock in a weak market these should be your picks for next nifty leg up they will fly up the most
Raja (6/7/2007 8:55:38 AM): nifty we will also buy but only after all weak hands are out weak hands have sl 4180/4140 nifty which is the obvious level. i want to buy 4100 sl 4090
Raja (6/7/2007 8:56:58 AM): 167 litl milega??
Raja (6/7/2007 9:00:54 AM): System: Trend follower Stock Name: LITL-I BuyStrategy: Buy between s1-s2 S1:167.10 S2:169.00 R1:179.44 R2:187.05 Target1:172.327 Target2:176.135 Target3:180.705 SL1:165.473 SL2:160.903
Raja (6/7/2007 9:27:35 AM): litl surgical strike 167-169 buy zone day low 168 area now 173
LITL dropped to support zone 167-169 in futures. and gave T1 as an intraday scalp trade. maybe in 2-3 days it will give 176+
Raja (6/7/2007 9:41:47 AM): 4180 target reached cover half??? rest 4140-4110?? or be greedy?
Nifty closed @ 4179.5
THAT MY DEAR FRIENDS IS THE ONLY REALITY (addressed to mr. sarvesh :))
THE LTP
THE CLOSE
LIVE WITH IT
Below 4170 4140/4100/4054 etc allowed.
but even in this weak market I can find bullish picks that will make money to the upside
technicals are an illusion; the driving force is fundamental in nature.
technicals only tell you what is happening.
fundamentals tell you why it is happening and how long it can continue.
litl 2010-2011; Will be worth 300-600 rs.
Write it down and remember me then..
Prithvi short term weakness?? It will be at 400-500 next year unless some fundamental disasters happen :)
Prithvi Heading to eod trendline, spotted by dhiraj , he finally gave me a picture that fits his name , the patient support is 275 , i'll buy 100 more there to complete my 1000.
(again notice the if/then else, the stock market is about probabilities and risk management)
Drawdowns are part of the game of investing
No risk, no reward.
That is the other reality of the markets.
People who are afraid to risk only talk talk talk.
They don't trade.
I bought prithvi
bought gokex
without any regard for index technicals.
prithvi is pure p.e/p.e.g pick
gokex is also p.e/p.e.g/leading exporter of garments
I can't always be right prithvi is one of those stocks
that just keeeeeps oooonnn stagnating.
you want a stoploss for investments??? stoploss 200 rs :)
if you bought at 300
target 400/500 in one year, sl 200
risk is 100 rs reward is 100/200 rs..
from a technical perspective i can justify just about any trade!!
In fact if i remember correctly even last time i reccomended prithvi @ 330+
IT has severely underperformed the markets. It only hit 410-420 area and not 448 as I had targetted.
Every stock has cycles of short/medium/long term under performance and out performance.
Contrary to popular belief stock prices do not go to + infinity and -infinity
Which is what the basic theory of trend following suggests..
Warren buffet, peter lynch, soros
Some of the biggest names in investing are all fundamental analysts+contrarians.
If you know what a stock is worth you can buy on the way down with a lot more confidence and still sleep easily
Star another good news short 2 days ago trashed today by 5%
after 5-10 hours of distribution.
Keep an eye on suzlon will also face profit booking within 5 hours (5 trading hours)
Litl faced profit booking @ 186... few days ago after good news and retested the support level I had given on the way up itself: 167
Wednesday, June 06, 2007
Gokex analysis
As I was saying earlier i believe, this market can offer value if one looks around hard enough.
So Lets start with gokex: a stock pick with p.e.g of <1
( it seems common theme in my picks lately is $ worries, exporters)
How i analyze stocks...
If you can think in this fashion.
Then drop me a line. We can split up work and find good picks both on technicals and fundamentals.
News: Fy07 results are out
Valuations:
fy07 actual 20 rs
cmp = roughly 10x trailing
fy08e 9.4 x earnings
book value of stock fy06 was 200
growth rate 15% annual
last 2-3 years
sustainable trend
capacity expansions comissioned
india's largest garment exporter
valuations compelling
growth momentum intact
fy08e = 24.99
fy09e = 31.46
by icicidirect
tad high estimates
worst case looking at 15% returns in one year
fair value suggests a target p.e of 15, 15*20 fair value target of 300??
Icicidirect suggests 320 p.e/peer valuations
best case looking for 20-40%
if stock moves up to 10-15x 25 next year
in line with peers like bombay fashion and keval kiran
debt/equity is very very low
0.22
hence the higher p.e multiple vs other textile midcaps like vtl and alok
this company is mostly debt free
looks like a bargain to me considering its leadership position
margins are a bit on lower side only 7-10%
ronw is 20%
acceptable.
Technicals
has broken a downtrendline
is forming a pole and flag
GOKEX, Analysis Date:5/31/2007
Close/cmp:217.05
Swing : Up=Buy ( 3.900% sensitivity)
T1:238.962 T2:255.12
T3:281.482 1xR:255.4
ImpulseTargetZone:297.64-324.002
SwingHigh:234.0 CMP:217.1
SwingLow:195.0 SLPivot:212.6
2xAtr14Stop:20.9104
Narrowsl:212.60
WideSl:199.33
TrailingSL:213.40
Lower Chan:218.813 Upper Chan:248.371
ResLine:240.206
Look to buy around 212 possible flat correction lows
with sl 195 and target 238/255/281 if you are a technician
If you are an investor then just buy and play for the upper targets 255-281-300
all levels on weekly closing basis
Note icicidirect 1 year target is 312
my technical target zone coincides with the funda
target proposed by icicidirect
297-324 if we get a full 5 wave rally
w3/wc which is minimum anticipation after a sharp pole/flag
target is 255
within 2 months.
commit 5% of equity
risk involved is
17 pts, round up to complete 10% 20 pt risk
reward is
26/43 pts
Trading rules
buy @ 212
use 2x atr chandelier stop.
So Lets start with gokex: a stock pick with p.e.g of <1
( it seems common theme in my picks lately is $ worries, exporters)
How i analyze stocks...
If you can think in this fashion.
Then drop me a line. We can split up work and find good picks both on technicals and fundamentals.
News: Fy07 results are out
Valuations:
fy07 actual 20 rs
cmp = roughly 10x trailing
fy08e 9.4 x earnings
book value of stock fy06 was 200
growth rate 15% annual
last 2-3 years
sustainable trend
capacity expansions comissioned
india's largest garment exporter
valuations compelling
growth momentum intact
fy08e = 24.99
fy09e = 31.46
by icicidirect
tad high estimates
worst case looking at 15% returns in one year
fair value suggests a target p.e of 15, 15*20 fair value target of 300??
Icicidirect suggests 320 p.e/peer valuations
best case looking for 20-40%
if stock moves up to 10-15x 25 next year
in line with peers like bombay fashion and keval kiran
debt/equity is very very low
0.22
hence the higher p.e multiple vs other textile midcaps like vtl and alok
this company is mostly debt free
looks like a bargain to me considering its leadership position
margins are a bit on lower side only 7-10%
ronw is 20%
acceptable.
Technicals
has broken a downtrendline
is forming a pole and flag
GOKEX, Analysis Date:5/31/2007
Close/cmp:217.05
Swing : Up=Buy ( 3.900% sensitivity)
T1:238.962 T2:255.12
T3:281.482 1xR:255.4
ImpulseTargetZone:297.64-324.002
SwingHigh:234.0 CMP:217.1
SwingLow:195.0 SLPivot:212.6
2xAtr14Stop:20.9104
Narrowsl:212.60
WideSl:199.33
TrailingSL:213.40
Lower Chan:218.813 Upper Chan:248.371
ResLine:240.206
Look to buy around 212 possible flat correction lows
with sl 195 and target 238/255/281 if you are a technician
If you are an investor then just buy and play for the upper targets 255-281-300
all levels on weekly closing basis
Note icicidirect 1 year target is 312
my technical target zone coincides with the funda
target proposed by icicidirect
297-324 if we get a full 5 wave rally
w3/wc which is minimum anticipation after a sharp pole/flag
target is 255
within 2 months.
commit 5% of equity
risk involved is
17 pts, round up to complete 10% 20 pt risk
reward is
26/43 pts
Trading rules
buy @ 212
use 2x atr chandelier stop.
Wolfe wave
Friend wanted example
So i give u 2 examples in one picture
Google for details.
Currently wolfe wave target is 4100 or so
I have never tested wolfe wave in isolation, no idea how accurate or useful it is.
i usually use wolfe wave whipsaw along with an elliot wave count.
For every one wolfe wave that works i am sure i can find 2-3 that don't
The key is that the risk is insanely tiny .
its usually <=1x atr
target is usually 2-4x atr
You could also try filtering by reward/risk to decide which ones to take
I'm going to do a very thorough test of all wave patterns on all timeframes
once i arrive in delhi.
Goal is to run something that can scan entire nse for any pattern on any timeframe of any size in real time and provide a reward/risk/probability estimate..
If there is any such thing as a useful pattern in the stock market for trading.
I'll find it :) within seconds of the pattern forming.
imagine entering every 1-2-3-4-5/a/b/c (zigzag/flat with reward=10 times risk :)
even with 20% accuracy thats a money making system
For now i continue to filter my technical patterns with an underlying fundamental view.
Vision: nifty 4600 before end of year. sl for view. 3556
"problem with nifty is
i know the following levels will be touched
4100-4400-4600-4900
this year
I just don't know in which order :))"
One possible order that makes a bit of sense given recent weakness.
4100-4400-4640-4400-4900
S&P CNX Nifty, Analysis Date:6/5/2007
Close/cmp:4284.65
Swing : Up=Buy ( 4.100% sensitivity)
T1:4391.22 T2:4642.55
T3:5052.61 1xR:4454.65
ImpulseTargetZone:5303.94-5714.01
SwingHigh:4,217.9 CMP:4,284.6
SwingLow:3,617.0 SLPivot:3,981.1
Narrowsl:3,981.15
WideSl:3,834.36
The power of dreams...
Lets work backwards
3556 is the ultimate swing low for nifty's current move.
At what price point does it make sense to even try buying nifty if we have a longer term horizon?
(considering odds 50:50 we want reward=risk)
Lets look at my first target which is logical above 3556 (not just me, elwave agrees!!)
x-3556 = 4640-x
2x=4640+3556
x=4098
the second target should be a 2x risk target
2*(x-3556)=5052-x
3x=12164
x=4054
Hence my level 4100 is derived, using the massively power processing power of the right brain while i slept.
Without actually working forward through the steps. But this is the way i usually work my reward/risk when I am awake.
Thats called intuition.
I just did the same thing while i slept a few weeks ago.
The steps have to be verified after the answer has already been computed.
Of course acting on hope is the easiest way to get butchered in the market :)
So either use options with a view to hold till expiry with predetermined risk or follow a trading system.
max risk on option trades is 2/6/10% of equity, and since entire option amount bought is usually at risk if you follow my levels , work out the risk before you start dreaming about the rewards.
I checked elwave, It has the same view
Check out the screenshot.
Currently the reward/risk is not favorable for buying at all on nifty.
The elwave analysis will become favorable once we get a bit more of a dip.
So final analysis
for investors
buy 4098-4054
sl 3950 (exit below 3950, reenter above or use options) narrow
wide sl for delivery investors? 3556
target 4600-4900. (4640-5052)
Done.
Levels will not change for next 3 months
Regardless of what market does
Another area which allow entry based on pure reward/risk
2x=4400+3556
x=3978
Just in case you are a mega bear.
Nifty 4240-4180-4140-4100, hll hedge for bears.
Negative beta, safe bet in a weak market
close to support
consider 192 critical.
sl 190 should suffice.
Levels given in an old post.
Strength is above 198-199-200 etc.
should touch 210-220
if 192 continues to hold.
As for nifty the angle of attack on the lower channel is damn sharp
if t2 4180 breaks
t3 4094 opens with interference from 4140 old low.
Go short on something that is doomed and hedge with hll long.
Should be a profitable strategy in theory in a down market.
Its starting to look like 4100 will be visited before 4400-4600-4900
So it might be prudent to lay off the nifty buying for a while.
If you are already long? as i know some people are near 4180. Cut and run below 4170 spot
close to support
consider 192 critical.
sl 190 should suffice.
Levels given in an old post.
Strength is above 198-199-200 etc.
should touch 210-220
if 192 continues to hold.
As for nifty the angle of attack on the lower channel is damn sharp
if t2 4180 breaks
t3 4094 opens with interference from 4140 old low.
Go short on something that is doomed and hedge with hll long.
Should be a profitable strategy in theory in a down market.
Its starting to look like 4100 will be visited before 4400-4600-4900
So it might be prudent to lay off the nifty buying for a while.
If you are already long? as i know some people are near 4180. Cut and run below 4170 spot
Nifty Diagnosis
4180 rising channel
4140 old low
check picture for details
If you are short these are your targets
4240 is the stoploss.
If you are a bull you might look to buy near supports
but sl has to be under 4140 old low
If you are a mega bear then you are probably already dreaming 3990 and 3750 and 3650 and 3556 :)
right?
So levels won't matter there.
Just keep in mind above 4240 nifty we are in breakout mode on the monthly charts.
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