Category Archives: TA Concepts

Articles on Technical Analysis, and Stock Markets, which can help reader to understand the research work in depth

Buy on Dips, Sell on Rallies

I know many readers, who understand the meaning of Buy on Dips, but they don’t know how exactly that means. Generally, any analyst after doing its research comes to a point where he/she had a view that broadly market is going to rise or going fall, based on that it gives a suggestion to their clients.

When we say Buy on Dips means, analyst has a Bullish View and stock has potential go much higher from current levels. In that case, whenever market falls or correct, that particular downfall should be utilized to accumulate the stock which were talked about. For example, Nifty is trading near 5800 levels and it has a fare chance to move higher in coming future, but there could be a chance that in nearest future Nifty may correct towards 5700-5600 levels. Now, in above scenario if you are not pure swing trader than you should utilize this correction to accumulate Nifty and Hold for higher levels to achieve. May be Nifty might test 6000+ levels again, in that case Buy on Dips gives you superior returns.

buy on dips, sell on rise by way2profits

 

When we say Sell on Rallies means, analyst has a Bearish View and stock has potential go lower from current levels. In that case, wherever market rises to some extent, that particular rise should be utilized to Sell or Book Profit in that Stock or Index. For example, Nifty is trading near 5800 levels and it has a fare chance to correct or witness downfall in coming future, but there could be a chance that in nearest future Nifty may move higher towards 5900-6000 levels and analyst believes that now there is limited upside and downside potential is higher. Now, in that case, trader can utilize any rise as a selling opportunity in Nifty and hold for the lower target

Above concept should be utilized with proper game plan, because if you don’t know where the turnaround point is, than there is a chance that you may go bust. So, it is always advisable that don’t hear and trust any media news, unless and until you closely follow them. Because, it is their duty to give you advice based on current market scenario and development, and which may be good for day, but once turnaround points come, they are not going to come again on News channel and going to give you advise that please exit from your position. So rely, only where you get consistent view, like we give at Way2Profits.

 

Gann Square of Nine Currency Calculator

After developing Gann Square of Nine calculator, few of my readers who were trading in currency markets as well, has send me request to develop the calculator for currency trading as well. Initially, i thought the same calculator can be used for currency trading, but when i saw the result, i get to know that, no it is not possible to trade with same calculator, so i developed Gann Square of Nine Calculator for currency trading as well, which is available absolutely free to my readers. Since, I am not currency buff, so I had not used much. But, I can tell you broadly output and methodology will be the same.

Gann Square of nine Currency Calculator

Gann Square of nine Currency Calculator

Now, it is up to my readers, to tell their views on this calculator, how it works, and any area of improvement needed.

To download Gann Square9 Currency Calculator

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What is the right way to Trade with Pivots?

When you say Buy above this level, and Sell Below this level; it means actually you don’t have any direction about the market or instrument. Basically this is a mechanical way of trading, without using any of your intellectuals. Here I don’t want to hurt feeling of any of the Trader who is already following some pivot rules very seriously and earning out of it. I respect them, but trying to make few points clear to novice traders.

When you apply any mechanical trading system, you should know what nitty-gritty’s are involved in developing system, back testing it, understanding its limitations, in which market condition there is high probability that your system will succeed or fail. But when any novice trader or even analyst exposed to some pivotal rule, generally he/she just check few past trades and directly jump into conclusion that is best or worse. Who cares to back-test method with thoroughly? Without back-testing any method in different market condition, how can you conclude whether it is good or bad?

I think many a times market stands at crucial junctures where there will be an equal probabilities develop to turn bullish or bearish, like according to my analysis few days back Nifty was standing at such point. But, every now and then if I am saying that market has equal chance to turn Bullish or Bearish, than either there is something wrong with my analysis or I am using such pivotal trading method, which gives me some mechanical answers about direction.

Some Do’s and Don’ts of Pivotal way of Trading

Do’s

  • Understand formula behind your pivot trading.
  • After understanding, just back test your formulae on your preferred instrument, with various possibilities, like in an End of Day basis, intraday basis, Hourly, Weekly and so on.
  • Just don’t back test recent data, check in all market conditions, and understand what is pros & cons of the system.

Don’t

  • If you are a part time trader, like if you are doing trading for earning some extra income and not seating live in the market, than I would suggest not entering in a market with such way of trading. It is not at all meant for you, although it sounds very attractive to you, because you don’t have to apply brains here. Please Avoid.
  • Without Back testing method, don’t enter into market with open knife, which can hurt you more.
  • If you are subscribed to a services and service provider sends you this type of recommendations than I think you should look for something else, because you are best client, to whom they provide service without any effort. Look for something else.

There are number of pivotal trading method, which are quite successful and used by many traders (mind it full time traders), some of them are.

  • Gann Square of Nine
  • Camarilla Pivot Trading.
  • Fibonacci Pivot Trading Method
  • Pivot trading based on Moving Averages

And there are number of other methods which are used according to convenience of traders.

bollinger bands

Trading Strategy based on Bollinger Bands

I know many of you are already using Bollinger Band in your analysis and trading, but I am also sure that most of you really don’t understand, strength hidden in Bollinger Bands. Honestly, I was also using Bollinger Band from last couple of years, but only in recent past I realized true magic of Bollinger Bands. Trust me, BB has a potential to give you excellent returns (don’t expect 100%…please) if used in right way, and right sense.

Till date you must be using Bollinger Band as your target or stop loss. If market is falling than your lower band is your target and, if rising than middle and upper band is your stop loss…right???  But, give me one genuine answer you are satisfied by the performance of your analysis?

You know Technical Analysis is like a car show room, where every cars are same only difference is their price and engine.  Now for a novice, whether salesman shows any high class engine car or any third class engine car, for them everything is same, because car looks same.  Exactly is the situation with new kiddos, Technical analysis for newbie is full of tools without understanding its basic nature and construction. For them one tool a day is the concept, today it works, tomorrow if it doesn’t than just throw It.

Bollinger Band strategy is the part of my course on Technical Analysis, if you are serious to learn than please do get in touch with me and understand the market with better perspective.

Gann Square of Nine Calculator

Dear Friends,

I had developed Gann Square of nine calculator for your desktop.  Its very simple to use, you just have to enter either last closing price or if you are a day trader than just enter weighted average price of the first half an hour.

Gann Square of 9, Gann Square of nine

Gann Square of 9, Gann Square of nine

Gann square of nine is good tool for intraday trading and consistently used by many traders across the world. The methodology is extremely simple is understood properly. Trader has to note that intraday trading has its nuances, and one has to understand that in better perspective. I would say that it is nothing less than a business and to venture into a business one should know all the nitty-gritty of the business. Here, I had developed a excel calculator based on Gann square of nine method and you just need to enter the price into it and you’ll get output in form of Buy and Sell signal. Let’s clarify one thing that Gann squre of nine is something similar to Pivot method of trading, wherein one does not take into consideration other aspect of the market, it only focuses on the existing price of the market, no matter in which instrument you trade. Coming on to Gann square of Nine is method recommended by legendary W.D. Gann and it is one of the simplest methods to apply, among others.

With my understanding I tried to clarify things developed calculator, which you may use upon downloading. From last four years thousands of traders has downloaded the calculator file and they are using very satisfactorily.  To download the calculator you need to pay just Rs. 250/- in below mentioned account and subsequently inform us on this email id – info@way2profits.com , once I receive the payment confirmation and your email I will send you the excel file and with that you’ll also receive one small note for the calculator wherein I tried to explain what you should not do while using the Gann calculator. I am sure after reading this PDF you’ll be benefited. (To know payment details please click below) 

FAQ’S (Frequently Asked Questions)

  • Gann square of Nine calculator useful in Intraday trading?

Ans :- Yes, absolutely. The whole of idea of Gann square of Nine calculator is to use for intraday trading also.

  • Gann square of Nine calculator useful in positional/delivery trading?

Ans :- Yes, experience trader with fare understanding of the market can use Gann square of Nine for position trading as well, but before that one has to understand and take grip on it.

  • Can we make significant profit by using this calculator?

Ans :- Straight answer is NO. Profit/Loss from any trading strategy totally depends upon individual trader. It is very much possible that with given same strategy one trader can earn handsome profit and another may end up in loss. Key here is to understand things in better perspective and apply accordingly.

  • Is this holy grail of stock market trading?

Ans :- Kindly understand there is No Black Box system in the world which can be called as Holy Grail of stock market trading, so keep your expectations real.

  • What is success rate of calculator?

Ans :- Since Gann square of Nine trading is not totally automatic trading or algo based trading it is difficult to measure the success rate based on this method. But it is highly recommended that before applying this method one should try to do paper trade ahead of taking actual trade.

  • Why to pay for calculator?

Ans :- I have taken lot of efforts to build this calculator and tried to make things simpler. Also with this I tried to explain few things very clearly which will help you to minimize your loss and maximize the profits.  And whether you agree or not there is no free lunch, whether you pay directly from your pocket whether you pay indirectly. And friend, here you pay just meager Rs. 250/- only.

  • Is there any update available in future?

Ans :- No. Its static excel file and there is no requirement for future update.  So don’t expect any update in future as well.

  • Refund policy.

Ans :- Kindly note that, in any case whatsoever maybe, money once receive will not be refunded back, so request you to kindly make sure before making a payment.

Lastly, we don’t take any credit, this methodology is developed by legendary trader W.D. Gann and if you want to learn more about his unique methods than please refer his classic books.

 

What is Pullback and Throwback?

If you are often confused with this terminology, than read it further, your confusion will get clear.

According to classical book – Technical Analysis of Stock Trends By Edward, Magee.

PULLBACK

PULLBACK

Pullback is refereed as return of prices to the boundary of the pattern after a breakout to the downside.  Which means after any breakdown from price pattern, prices again come up to retest the boundary line or neckline of pattern, as shown in below attached figure.

 

 

 

 

 

THROWBACK

THROWBACK

 

Throwback is referred as return of prices to the boundary line of the pattern after a breakout to the upside.  Which means after any upside breakout from price pattern, prices again come back to retest the support or neck line of pattern, as you can see in below attached figure.

 

 

 

Over and above, John Bollinger in his book Bollinger on Bollinger Bands mentioned and depicted exactly opposite to what we said above.  According to him, Pullback is referred to price movement against the primary trend that does not interrupt that trend.  And in all shown example he has mentioned accordingly.  We respect author and his work, but we like to go with native definition and application.