TRADING IDEAS

THE CANDLESTICK COURSE - STEVE NISON

2008-08-24T06:05:00.000-07:00

Candlestick basics taught by the master himself.A must have for a serious trader who would want to trade with candlesticks.Candles will always speak louder than bar charts.Learn how from Steve Nison.At the end of every chapter is a test which one must take sincerely.

LINK ---- www.4shared.com/file/35203232/14974255/Steve_Nison_-_Candlestick_Training_Course_pdf_.html

ANDREWS PITCHFORK

2008-05-30T09:05:00.000-07:00

andrews pitchfork - an unique trendline method of finding future reaction points.this e - book gives u all the information u need to know abt this unique method.
LINK : http://www.4shared.com/file/49522374/8a462f83/ANDREWS_PITCHFORK.html

ADX SYSTEM

2008-05-14T20:42:00.000-07:00

a view of the ADX system i am using.all the parameters , color levels & alerts can be customised as per your needs right from the chart.

ORIGIN OF FUTURES MARKET

2008-04-18T00:29:00.000-07:00

Japanese were the first to use technical analysis to trade one of the
world's first futures markets-rice futures. The Japanese started trading
in this market in the 1600s. Interestingly, the birth of the Japanese rice
futures market was a consequence of the country's military history.
After a century of internal warfare among the daimyo (Japanese feudal
lords), General Tokugawa Ieyasu, who ruled from Edo (the ancient
name of Tokyo), won the famous battle at Sekigahara in 1600. This was
the battle that helped unify Japan. Tokugawa thereafter became Shogun
of all Japan. After his victory over the Daimyo, General Tokugawa cleverly
required that all the feudal lords live in Edo with their families. When
the lords returned to their respective provinces, the entire family stayed
at Edo as hostage. The feudal lord's main source of income was rice that
was collected as tax from the peasants who worked their land. Since this
rice could not be transported from the daimyo's provinces all the way to
Edo, they set up warehouses in the port city of Osaka to store their rice.
Because all these powerful daimyo lived so close to each other in Edo,
they attempted to outdo one another in lavish dress, mansions, and other
luxuries. This was reflected by a popular saying at the time, "The Edoite
will not keep his earnings overnight." This showed that the daimyo in
Edo were seen as spendthrifts with an expensive lifestyle. To maintain
this lifestyle, the daimyo sold rice from their warehouse in Osaka; sometimes
they even sold rice from future harvests.
The warehouse would issue receipts for this future rice. These were called empty rice contracts ("empty rice" since the rice was not in anyone's physical possession) and they were sold in the secondary market. This was the beginning of one of the world's first futures market.
Trading in rice futures engendered much speculation, and it was from
this speculation that Japanese technical analysis was born. The most famous
trader in the rice futures market was Homma. Homma traded in
the rice futures markets in the 1700s. He discovered that although there
was a link between the supply and demand of rice, the markets were
also strongly influenced by the emotions of the traders. Because of this,
there were times when the market perceived a harvest as different from
the actual. He reasoned that studying the emotions of the market could
help in predicting prices. In other words, he understood that there was
a difference between the value and the price of rice. This difference between
price and value is as valid today with stocks, bonds, and currencies,
as it was with rice, centuries ago.
In the book, The Fountain of GoId-The Three Monkey Record of Money,
purportedly written by Homma, the author states: " After 60 years of
working day and night I have gradually acquired a deep understanding of the movements of the rice market."The book goes on to say that when we are all bearish,there is cause for prices to rise.When everyone is bullish there is cause for the price to fall." This phrase echoes what is now called contrarian opinion, a tool important to so many traders. yet,The Fountain of Gold-The Three Monkey Record of Money, was written in 1755.It is amazing that before America was a nation, the Japanese are trading with contrarian opinion! comparing successful trading to being like the three monkeys we all knew as children-see, hear, and speak no evil.

Characteristics of the 3 monkeys
1. "See no evil"- when you see a bullish (bearish) trend, do not get caught up in it. consider it an opportunity to sell (buy).
2. "Hear no evil"- when vou hear bullish or bearish news, don't trade.
3. "Speak no evil"- don't speak to others about what you are going to do in the market.

Holy Grail Pattern

2008-04-17T01:35:00.000-07:00

LINDA BRADFORD RASCHKE

how simple can "simple" be????ask linda.this interview contains setting for her "Holy Grail Pattern",wolfe waves & gap strategies.it shud excite any ADX & Moving Average fan.

LINK :http://www.4shared.com/file/44393654/c6595b43/1_online.html

INDIA VOLATILITY INDEX ( VIX )

2008-04-16T20:34:00.000-07:00

Volatility Index
Volatility Index is a measure of market’s expectation of volatility over the near term.Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlyingIndex is expected to fluctuate, in the near term, (calculated as annualised volatility, denotedin percentage e.g. 20%) based on the order book of the underlying index options.
Volatility Index is a good indicator of the investors’ perception on how volatile markets are expected to be in the near term. Usually, during periods of market volatility, market moves steeply up or down and the volatility index tends to rise. As volatility subsides, option prices tend to decline, which in turn causes volatility index to decline.

India VIX
India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid ask prices of Nifty 50 Options contracts (which are traded on the F&O segment of NSE), a volatility figure (%) is calculated (detailed calculation methodology enclosed) which indicates the expected market volatility over the next 30 calendar days. Higher the implied volatility higher the India VIX value and vice versa.There are some differences between a price index, such as the Nifty 50 and India VIX. Nifty50 is calculated based on the price movement of the underlying 50 stocks which comprises the index. India VIX is calculated based on the bid-offer prices of the near and mid month Nifty 50 Index Options. Nifty 50 Index is an absolute number, e.g. 4500, 5000 etc., whereas India VIX is a percentage value (eg. 20%, 30% etc.). Whereas Nifty 50 signifies how the markets have moved directionally, India VIX indicates the expected near term volatility and how the volatility is changing from time to time.The implied volatility as captured by the volatility index is not about the size of the price swings, but rather the implied risks associated with the stock markets. When the market is range bound or has a mild upside bias, volatility is globally observed to be typically low. On such days, call option buying (a position taken on the view that the market will move higher) generally outnumbers put options buying (a position taken on the view that the market will move lower). This kind of market may indicate lower risk. Conversely, when the selling activity increases significantly, anxiety among investors tends to rise. Investors rush to buy puts, which in turn pushes the price of these options higher. This increased amount investors are willing to pay for put options shows up in higher readings on the volatility index. High readings indicate a higher risk market place. Volatility index can also be used as a contrarian indicator. Various tradable products, such as futures and options contracts are available on the volatility index internationally. The derivative contracts on Volatility Indices allow investors to trade ‘volatility’. Volatility is one among the various factors that affect the option prices.Volatility index isolates expected volatility from other factors affecting option prices, such as changes in the underlying price, dividends, interest rates, time to expiration. As such the volatility index offers a way for investors to buy and sell option volatility directly, without having to deal with other risk factors that would have an impact on the value of an index option position.

Uses of Volatility Index
Volatility Index offers great advantages in terms of trading, hedging and introducing derivative products on this index. Investors can use volatility index for various purposes as mentioned below:
• Investors’ portfolios are exposed to the market volatility. Investors could hedge their portfolios against volatility with an off-setting position in India VIX futures or options contracts.
• Volatility index depicts the collective consensus of the market on the expected volatility and being contrarian in nature helps in predicting the direction. Investors therefore could appropriately use this information for taking trading positions.
• Investors could also use the implied volatility information given by the index, in identifying mis-priced options.
• Short sale positions could expose investors to directional risk. Derivatives on volatility index could help investors in safeguarding their positions and thus avoid systemic risk for the market.
• Based on the experience gained with the benchmark broad based index, sector specific volatility indices could be constructed to enable hedging by investors in those specific sectors.
Find out the daily VIX from the above mentioned site
LINK : http://www.nse-india.com/

Online Pivot Point Calculator

2008-04-15T20:26:00.000-07:00

calculate daily pivots,support & resistance levels in 5 different methods using this handy online tool.
LINK : http://www.stepneyfutures.com/tools/pivotcalc.html

THE DAY TRADERS BIBLE - RICHARD WYCKOFF

2008-04-12T20:56:00.001-07:00

LINK : http://www.4shared.com/file/43922790/c713f1fd/The_Day_Traders_Bible.html

THE TRUTH ABOUT FIBONACCI TRADING

2008-04-11T22:17:00.000-07:00

The truth about Fibonacci levels is that they are useful (like all trading indicators). They do not work as a standalone system of trading and they are certainly not the “HOLY GRAIL”, but can be a very effective component of your trading strategy.
But who is Fibonacci and how can he help you with your trading?
A very important E-book to have.This book is an eye opener & also will teach u how to practically apply the Fibonacci extensions & retracement levels.the markets follow these levels most of the time.so practically it makes sense to actually study these & apply it to your trading strategy.i have read lot of books & articles about Fibonacci but this ebook is short,precise,concise & to the point.u can read it & immediately apply it to your trading.
LINK :http://www.4shared.com/file/43836926/be44cd4b/TRUTH_ABT_FIB_TRADING.html

PIVOT POINT TRADING

2008-04-08T22:32:00.000-07:00

The pivot point is the level at which the market direction changes. Using some simple arithmetic and the previous days high, low and close, a series of points are derived. These points can be critical support and resistance levels.
All that is needed is the previous day's high, low and closing price and voila, we have an entire range of supports and resistances that can be found invaluable in day trading. The USP of pivot point trading is that it is predictive in nature i.e. it can forecast the range for the trading day ahead.
The reason pivot points are so popular is that they are predictive as opposed to lagging. You use the information of the previous day to calculate potential turning points for the day you are about to trade (present day).
Because so many traders follow pivot points you will often find that the market reacts at these levels. This give you an opportunity to trade.

FORMULA
Resistance 3 = High + 2*(Pivot - Low)
Resistance 2 = Pivot + (R1 - S1)
Resistance 1 = (2 * Pivot) - Low
Pivot Point = ( High + Close + Low )/3
Support 1 = (2 * Pivot) - High
Support 2 = Pivot - (R1 - S1)
Support 3 = Low - 2*(High - Pivot)
High stands for the previous day's high.
Low stands for the previous day's low
Close represents the previous day's close.
As you can see from the above formula, just by having the previous days high, low and close you eventually finish up with 7 points, 3 resistance levels, 3 support levels and the actual pivot point.

If the market opens above the pivot point then the bias for the day is for long trades as long as price remains above the pivot point. If the market opens below the pivot point then the bias for the day is for short trades as long as the market remains below the pivot point

The three most important pivot points are R1, S1 and the actual pivot point.

The general idea behind trading pivot points is to look for a reversal or break of R1 or S1. By the time the market reaches R2,R3 or S2,S3 the market will already be overbought or oversold and these levels should be used for exits rather than entries.

A perfect set up would be for the market to open above the pivot level and then stall slightly at R1 then go on to R2. You would enter on a break of R1 with a target of R2 and if the market was really strong close half at R2 and target R3 with the remainder of your position.

PRICE OPENING ABOVE THE PIVOT
If the price opens above the pivot point and starts moving upward, then a long position can be initiated with a stop just below the pivot point and with the R1 as the target. If the price crosses above R1, that can also be an entry level with a stop just below R1 and R2 as the target. Generally, no buy is initiated near R2, as it is the upper limit of the trading range for the day. In case the price reverses from R1 or R2, it can be the right place to short the stock with a stop just above R1 or R2 with the target being the support just below.

PRICE OPENING BELOW THE PIVOT
In the similar way, if the price opens below the pivot point, it is a bearish signal and a short position can be initiated with a stop just above the pivot point and the target being S1. Price moving below S1 and moving towards S2 would also be a selling level. Selling is generally not done near the S2 as it is the lower boundary of the day's trading range. Price reversing from S1 or S2 can be used for initiating buy calls with the target being the level just above. Traders who peruse charts can use pivot points in association with other technical tools to decide whether to play long or short.

CONCLUSION
Pivot points are yet another useful tool that can be added to any trader's toolbox. It enables anyone to quickly calculate levels that are likely to cause price movement. The success of a pivot-point system, however, lies squarely on the shoulders of the trader, on his or her ability to effectively use the pivot-point systems in conjunction with other forms of technical analysis.
PIVOT POINT CALCULATOR :
LINK: http://www.4shared.com/file/43512779/102ede7c/PIVOT_POINT_CALC.html