Those following my blog regularly would have noticed that I tend to devide my analysis in two parts:
Price-action
&
Momentum Observation
While for price action, various patterns based on
EW pattern
Harmonic Pattern
Wolfe Wave
Andrew's Pitchfork
Channels
are my guides;
For momentum study
Trendline breach
Divergence in MACD
Overbot/oversold levels with divergence in RSI-14
are my tools.
Trading success, I have observed almost always, is directly proportional to my ability to synchronize the above two. However, even to this day, I feel that price-pattern analysis and the price-levels derived from them get so deeply engraved in my mind that they get over-emphasized in trade-initiation.
And that leads to getting into a trade early or missing it altogether (as mkts. reverse just before reaching that level).
But whenever,I have succeeded in synchronizing the two, more fruitful trades have been generated.
I wish to illustrate the above point by sharing my L & T trades during April Series:
As the level of 1300 was approaching, on 3.4.2013 following charts were drawn to track the stock:
.png)
.png)
+Hourly.png)
Note that on Daily Charts RSI-14 has given divergence from oversold zone,MACD has also given divergence but price-action was showing that a dip below 1327 had to come and in the Hour chart a positive divergence in MACD was awaited and for that a dip upto 1305 was calculated. A mention to developing HnS pattern was made to keep in mind the other aspect also.
Charts on 9.4.2013
In the Chart above,persistent positive divergence in Daily Chart was negating the probability of neck-line break and in the chart below, developing wolfe-wave and Shark pattern are illustrated:
.png)
Chart on 12.4.2013
.png)
Price-action
&
Momentum Observation
While for price action, various patterns based on
EW pattern
Harmonic Pattern
Wolfe Wave
Andrew's Pitchfork
Channels
are my guides;
For momentum study
Trendline breach
Divergence in MACD
Overbot/oversold levels with divergence in RSI-14
are my tools.
Trading success, I have observed almost always, is directly proportional to my ability to synchronize the above two. However, even to this day, I feel that price-pattern analysis and the price-levels derived from them get so deeply engraved in my mind that they get over-emphasized in trade-initiation.
And that leads to getting into a trade early or missing it altogether (as mkts. reverse just before reaching that level).
But whenever,I have succeeded in synchronizing the two, more fruitful trades have been generated.
I wish to illustrate the above point by sharing my L & T trades during April Series:
As the level of 1300 was approaching, on 3.4.2013 following charts were drawn to track the stock:
.png)
.png)
+Hourly.png)
Charts on 9.4.2013
.png)
Chart on 12.4.2013
Chart on 17.4.2013:
.png)
Here came the first target and the point that I wish to illustrate.
As the targetted price of 1440 was reached and a pin-bar candle got formed,I not only squared off my longs but entered shorts guided purely by price-action. And it was only after the stop-loss got triggered that I noticed--- there was no negative divergence on momentum charts.
Chart on 18.4.2013:
And dumb-founded by triggering of stop-loss, failed to ride the upmove again though was quick enough to draw the next price-action.
Chart on 26.04.2013
And this is how we stand today.
1.Reached the price target
2. A rising wedge is developing
3.Negative divergence is visible.
Need I say more??
POST - SCRIPT:
Chart on 30-4-2014:
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