Indicators
Technical indicators :
leading -leading indicators are trying to gauge price momentum from relatively recent price action, these indicators tend to generate frequent buy and sell signals and are therefore normally used in ranging markets.
lagging -Lagging indicators on the other hand are created to give a picture of where the market has been, and therefore where it is likely to continue to go.they generate less trading signals than leading indicators.
The more sensitive the indicator the earlier you will catch the move, however the more false signals that will be given.
Moving Point average:
The simple moving average is the most basic of the moving averages and is calculated by taking the past x number of points averaging them, and then plotting the resulting line on a chart.
Critics of the simple moving average argue that it is too simple in the sense that it gives the same weight to each point in calculating the moving average. The problem with this it is argued is that the more recent data points deserve a greater weighting in the formula as they are more relevant to the future price action of the instrument.
Impatience
To be ambitious is a good thing, but when boundaries between being ambitious and being impatient begin to blur, you know that you are in deep soup.
I guess its a trait which is common to a lot of IITians(i would say around 50%).
I have been in college for around 5 yrs and i enjoyed the relaxed pace of life throughly.I knew there is going to be an end to this beautiful journey, but instead of concentrating on end, i grabbed every available tiny pearl of happiness and gleefully pocketed it in my endless list of sweet memoirs.
Life out here is very different.
Industry don't love IITians as they are impatient.
They assume that they deserve more and go for it.
This results in high attrition rate and less respect.
I guess faithfulness and continuity are more important in an industry setup as compared to a flash of brilliance.
My flatmate epitomizes this thinking.
Sometimes i feel pity on him as he is too focussed on thinking about the water quality available at the next station, instead of enjoying the last remaining water drops at his disposal.In this unending process, i think he has forgotten a valuable lesson in life i.e. "LIVE IN PRESENT".
Reversal Patterns and trading strategies
An Introduction to Chart Patterns - Double Top and Double Bottom
A double bottom is also a reversal pattern in the futures, forex, or stock markets which is the exact opposite of a double top.
First lets look at the a common trading strategy for the double top. For confirmation that a double top has actually formed and that a reversal in the uptrend is at hand, a common strategy is to look for declining volume going into the second peak and rising volume on a break below the bottom of the trough which has formed between the two peaks (support).
Once these things line up a common trading strategy is to enter the trade on the break of support with a target which is equal to the distance between the bottom of the trough and the top of the two peaks projected downward from the bottom of the trough. The stop order is then placed just above the last peak.
Enter-after two troughs are gone, at the level of third trough
target- highest difference
Stop- second top crest
Charting Patterns: The Head and Shoulders Pattern
A Head and Shoulders pattern is defined by one peak, followed by a higher peak, which is then followed by a lower peak, and finally a break below the support level established by the two troughs formed by the pattern
Upon the break of the neckline support level the chart pattern is said to be in place so this is where traders will commonly look to enter a short position. Their target will be calculated by measuring the distance from the head of the pattern down to the neckline and then projecting that distance downward from the breakpoint of the neckline. The stop will then be placed just above the right hand shoulder of the pattern which is considered resistance. The idea here is that once the neckline support has been broken sellers will theoretically remain in control but if this does not happen then you are protected with a stop loss just above the nearest resistance level.
Enter-where neckline intersects the curve
target- highest difference
Stop- lower second shoulder crest
Charting Patterns: wedge pattern
which forms when the market makes lower lows and lower highs with a contracting range
trend wedge tendency result
up rising same reversal
down rising opp continuation
down falling same reversal
up falling opp continuation
Enter-upper line lowest point
target- upper line highest point
Stop- lower line lowest point
Typically seen after a big move in one direction in a particular financial instrument, flags and pennants represent brief consolidations or pauses in the market before a resumption of the trend in which they occurred.
Enter-upper line lowest point
target- upper line highest point
Stop- lower line lowest point
Charts and analysis
Price charts
Line Charts
Bar Charts
Candlestick Charts
The more times that price has touched a support or resistance without breaking through it the more “valid” that level is thought to be.
Multi time frame analysis
The same concept applies when looking at support and resistance. In general the more time frames and the longer the time frame is that a support or resistance level shows up on the more “valid” that level is considered.
DOW THEORY
There are two basic methods that traders use in determining when to enter the market when trading the stock, forex, and futures markets, which are
Fundamental analysis
Technical analysis
Dow Theory.
The Markets Have 3 Trends
Trends Have 3 Phases
The Markets Discount All News
The Averages Must Confirm Each Other
Trends Are Confirmed by Volume
Trends Exist Until Definitive Signals Prove That They Have Ended
Finance Fundamentals
Hi
I have been in the firm for past 8 months.
It has been a unique learning experience.
I have got lot of new things in life, both
on personal and professional front.
Latest news in that i am preparing for CFA june,2008.
I am also reading a lot of finance.
So some of the posts from now onwards, will be on a topic.
I am also trying to learn trading fundamentals.
http://www.informedtrades.com/trades.php?page=freetradingcourses
this is a very good resource.
I will be copying and pasting some of his stuff in my next posts :).
LIfe changing speech
Speech made by Pulitzer Prize-winning author, Anna Quindlen at the commencement ceremony of an American university where she was awarded an Honorary PhD.
"I'm a novelist. My work is human nature. Real life is all I know. Don't ever confuse the two, your life and your work. You will walk out of here this afternoon with only one thing that no one else has. There will be hundreds of people out there with your same degree: there will be thousands of people doing what you want to do for a living. But you will be the only person alive who has sole custody of your life. Your particular life. Your entire life. Not just your life at a desk, or your life on a bus, or in a car, or at the computer. Not just the life of your mind, but the life of your heart. Not just your bank accounts but also your soul.
People don't talk about the soul very much anymore. It's so much easier to write a resume than to craft a spirit. But a resume is cold comfort on a winter's night, or when you're sad, or broke, or lonely, or when you've received your test results and they're not so good. Here is my resume: I am a good mother to three children. I have tried never to let my work stand in the way of being a good parent. I no longer consider myself the centre of the universe. I show up. I listen. I try to laugh. I am a good friend to my husband. I have tried to make marriage vows mean what they say. I am a good friend to my friends and they to me. Without them, there would be nothing to say to you today, because I would be a cardboard cut-out. But I call them on the phone, and I meet them for lunch. I would be rotten, at best mediocre at my job if those other things were not true. You cannot be really first rate at your work if your work is all you are.
So here's what I wanted to tell you today: Get a life. A real life, not a manic pursuit of the next promotion, the bigger pay cheque, the larger house. Do you think you'd care so very much about those things if you blew an aneurysm one afternoon, or found a lump in your breast? Get a life in which you notice the smell of salt water pushing itself on a breeze at the seaside, a life in which you stop and watch how a red-tailed hawk circles over the water, or the way a baby scowls with concentration when she tries to pick up a sweet with her thumb and first finger.Get a life in which you are not alone. Find people you love, and who love you. And remember that love is not leisure, it is work.
Pick up the phone. Send an email. Write a letter. Get a life in which you are generous. And realize that life is the best thing ever, and that you have no business taking it for granted. Care so deeply about its goodness that you want to spread it around. Take money you would have spent on beer and give it to charity. Work in a soup kitchen. Be a big brother or sister. All of you want to do well. But if you do not do good too, then doing well will never be enough.
It is so easy to waste our lives, our days, our hours, and our minutes. It is so easy to take for granted the colour of our kids' eyes, the way the melody in a symphony rises and falls and disappears and rises again. It is so easy to exist instead of to live. I learned to live many years ago. I learned to love the journey, not the destination. I learned that it is not a dress rehearsal, and that today is the only guarantee you get. I learned to look at all the good in the world and try to give some of it back because I believed in it, completely and utterly. And I tried to do that, in part, by telling others what I had learned. By telling them this: Consider the lilies of the field. Look at the fuzz on a baby's ear. Read in the back yard with the sun on your face. Learn to be happy. And think of life as a terminal illness, because if you do, you will live it with joy and passion as it ought to be lived".
