Speculator :I will show some trend identification techniques using Nifty

Speculator: let's keet it very simple. One timeframe, one !" and one momentum
indicator, let's use #$%min, &' ema and (SI)$*
Speculator: let's +egin with the recent swing which started on ,ec -- wait for the price
to cross the &' ema and rsi )$* to get over+ought i.e move a+ove ./ that's a preliminary
indication that a trend change may have started no guarantees at this stage.
Now wait for the price to tag the &' ema and reverse +ack you need to see at least one
green candle a+ove the &' ema that's around '012 now put a stop +elow the prior swing
low '0&. and pray % mean it seriously. "t this point we have no confirmation that a trend
change has occurred we are 3ust speculating +y taking a position after some sideways
move the price takes off, until price moves a+ove a prior swing pivot the trend change is
not confirmed in this case the prior swing pivot is $/'1. 4here are various ways to
esta+lish swing pivots. Some use pure price to do that some use momentum indicators
some use moving avg, momentum +enchmarking of pivots is comple5 and I won't go
there.
Speculator: I will show how to use ema6s to esta+lish swing pivots I will e5plain how i
arrived at the $/'1 pivot in a minute, +efore that i will e5plain how to identify after
reaching $#.0 high on dec -' we pull+ack to the &' ema and reverse from there. 4his
reversal make a new recovery high at $-/1 on dec a re3ection from a ema and a new
recovery high constitutes a swing pivot in this case the low was $#&2 where the re3ection
occured from the &' so $#&2 +ecomes your swing pivot. note we don't have to touch the
&' ema going close enough to it is good also remem+er after the re3ection from the &'
ema, you need to make a new recover high. in order to call it a swing pivot7
Sandew: !eanwhile one more question. 8hart is open in front of me. Seeing today
closing and (SI +eing neutral, price a+ove &' ema, we remain in uptrend 9 :hat are
current trade ;ivot point.
;ommy: # min after initial position what a+out rsi should we watch9
Speculator: let me finish the +asics and then you can ask questions. I will tell you why rsi
will +e used later, ok now for the uptrend to remain intact we have to keep trading a+ove
the swing pivot of $#&2, on dec -0, we pull+ack again towards the &' ema. in fact we
+reak +elow that we go +ack up and retest the &' ema and fail again. that's a setup for
intraday short.
<O=<O=#02#Spec: why only intraday9
Speculator: now if this setup had +roken $#&2 that would +e a setup for swing short and
the uptrend is considered +roken +ut as you see we didn't +reak our swing pivot . rather
went ahead and made another recovery high the low at $#$. +ecomes our new swing
pivot re3ection at &' and new dec &# : another pull+ack to $#0- and a new high so $#0-
+ecomes our new swing pivot on 3an ' another pull+ack to $--1 and re3ection and new
high $-#1 sorry so $-#1 +ecomes our new swing so on a #$%min chart a swing trader has
got no e5its so far from his long position
;hukad: so currently you would say $-2/ is the new swing pivot
Speculator: a +reak of $-#1 will +e indication for him to close his longs
(vgandhi: any particular reason for #$ min tf 9
Speculator you can use any 4> you want, &/%min 2/%min daily +ut you need to tune the
indicators to that 4> for instance &' ema is not suita+le for 2/%min to identify swing
pivots.
;hukad has a point. why $-2/ is not the new latest wing pivot,
Speculator: Identify a suita+le ema and (SI or Stoch or 88I for that given i 3ust showed
an e5ample of what works +est on #$%min Ok now if i look at the charts, there is nothing
for me to do other than 3ust ride the
Speculator tomorrow we might hit the &' ema and reverse
;ommy: you never mentioned rsi
;hukad: so where does the (SI fit9
Speculator: In that case esta+lish another pivot and ride let's say we we move +elow &'
ema.
Sandew: 8urrent swing pivot is $-#1 or $-2/ % why one and why not the other9 Spec,
please reply.
Speculator: and then wait for a move +ack up to &' ema and re3ection to take an intraday
trade. if +elow $-#1 swing pivot stop thinking long ride your shorts for a swing .
Speculator: sandew $-#1
Speculator: ok now to the (SI or 88I or Stoch or whatever is your fav indicator, let's take
(SI which is simple
sandew: I read $-#1 +ut chart shows $-2/ of today also. what is wrong with $-2/
Speculator: sandew nothing wrong with that I told in the +egining. there are #// ways to
esat+lish swing pivots
?anna: $-2/ has not come close enough to &' !". i feel
Speculator: Its 3ust a methodology to esta+lish the pivots everyone has their own
techniques. one has to +e consistent with those techniques. that's all
;ommy: after initial position at $/// whether to watch rsi indicator9
Speculator: ok now +ack to (SI, amateur mistake with momentum indicators is that they
think over+ougt is a sell and oversold is a +uy, if it was that simple, the +ig hedge fund
guys would have automated that asked the computers to make infinite amount of money,
momentum indicators are a great clue as to whether we are in a trending market or a
sideways, firstly don't trade the momentum crossovers, you will go +ankrupt I wil
gaurantee you that
Speculator: use momentum indicators to assess trend, let's look at the #$%min chart with
(SI)$*. I am using (SI)$,&/,./* I am using (SI)$* +ecause it is more sensitive than
(SI)#'* i.e faster
<ust learn how to intrepret it i am 3ust giving an e5ample, let's continue with the e5ample
ok on dec -- rsi crossed a+ove ./ then we pulled +ack +elow ./ and the price went
siedeways then the market took off and the (SI got O@ again.
Speculator: :hen the (SI moves from a neutral)$/* or OS )&/* to a over+ought position
and the price makes a new recovery high it means a trending move in case of sideways
market, the (SI gets over+ought, while the price fails to make a new high, that's a +ig
clue that we are in sideways range, I will show you some e5amples first let's look at the
trending moves, on dec -', the (SI)$* moved from over+ought to oversold.
coincidentally when the (SI was oversold, the price was near the &' now the (SI moves
+ack to over+ought and the price makes a new high. :hat does that tell you 9
Smsmss: trending market
;hukad: uptrend
Speculator: yes we are trending higher and the oversold &' ems where re3ection happened
is the swing pivot, on dec -0, we again pull+ack and move from (SI O@ to (SI gets O@
again dec &# +ut we fail to make a new high, high A$--# and (SI +reaks +elow that says
we are in sideway move possi+ly and then the (SI gets O@ again on the same day and the
price makes new high so trending +ehavior again
(ahulsud: spec is it $--0
Speculator: rahul, yes $--0, after $--0 again we move +ack to OS. +ut the price remains
a+ove the prior swing pivot. on dec ', (SI O@ again and new highs at $-&' again
trending +ehavior again. on and on and on... so that's a strong trending market there.
Nlokwani: spec, on &#st, when price +reaks ema for a while, what should +e pivot value
% first time when it touched ema9
Speculator I don't use emas for esta+lishig pivots, I use momentum for esat+lishing
pivots somewhat proprietary
Speculator: ok now some e5amples on range +ound market
;ommy: means not to use indiactor to take decision for sell or +uy once in a trend
Speculator: pommy e5actly. one more thing we didn6t discuss downtrend, go +ack to ##
,ec #$%min N>, dec #- market moves down and +reaks the prior swing pivot at $/1-
what does that say 9
Speculator: esta+lish swing short positons
;hukad: down swing
Speculator: we wait for a price re3ection from &' ema and go short we keep moving down
into dec #2, on dec #. we move to &' ema and have a re3ection at $/.#, so $/.# +ecome
your swing pivot
(ahulsud: +ut spec this time many candles closed a+ove &' ema
Speculator: yes N> chart on ,c #2
(ahulsud: it could have +een change of trend, when do we take entry99
NO(@=#0$1: yes and the SB
Speculatr: rahul yes, +ut you don't take the first move a+ove the &' you wait for the price
to come +ack to the &' ema have a re3ection there and move up to consider long.
(ahulsud: ok got it. In this case price moved +elow &'. "m i right9
Speculator: in this case we have a re3ection and we move +elow &' again.
(ahulsud: so can we go short now9
Speculator: then you move +ack a+ove &'. +ut look at your (SI)$*
(ahulsud: it is over +ought again
Speculator: the candle close at $/'/ a+ove &'. +ut your (SI is already over+ought, so it
says a potential sideway move. @ut if you are agreesive, you can try a long. the ne5t day
we gap down i.e re3ection from &' again, now $/.# is our swing pivot, we move +ack up
to $/21 and the (SI gets O@ and we get a re3ection again, so the downtrend is still intact
$/21 is the new pivot
(ahulsud: spec: +ut u said for a trending makt rsi should turn from the middle
Speculator: ne5t day we have another attempt at &' and re3ection
Nlokwani: in this case (SI should +e OS and newer lows..
Speculator: no I said for a trending move (SI should move from to over+ought and create
new highs in downtrend, we need to get OS and make new, so sorry $/21 cannot +e
swing pivot +ecause we did not make new lows
(ahulsud it should +e $/.# and we would +e praying till now.
Speculator: re3ection at $/'1 caused new lows with (SI OS, rahul, e5actly.
and those prayers usually gets answered so $/'1 is new swing, you know the rest of the
story. when the uspswing from ,ec -- +reaks a+ove $/'1, it's a +ig @CD that's why the
markets go nuts after the $/'1. see the range e5pansion
rahulsud: any other technique to make early entry spec as SBs are quite +ig
Speculator: that's it guys. i 3ust showed a trend identification technique. you can create
your own,, fine tune it to your timefrmaes. good luck
?anna: spec % so we will e5it the short trade only at $/'1. right9
(ahulsud: like u take long at $/'1 with SB '0&.
Speculator: usually SB are a+out &/%$/ points with this technique +ut the profits are
-//%$// points. think a+out it
Speculatorno you didn't go long at $/'1, that was the confirmation, you are not
following me, dec -- we moved a+ove &' ema, we had re3ection at &' ema and the first
green candle a+ove that closed at '01$.
(ahulsud: +ut same thing happened on dec #. also spec
Speculator: rahul, yes, if i take long there that will +e a loss trade, no technique is
perfect and losses are part of this game. if you have a system with ./E accuracy you will
+e rich , +ut the key is always riding the trends fully and not a+ruptly quitting for reasons
other than the what is called +y the technique
any technique for entering a esta+lished trend like today +ut sometimes, you may
perceive some ma3or risk and in that case +uy puts for or calls in a downtrend.
Speculator: re3ection from &' ema and one solid green candle
@haisaa+ : spec do u rely on fi+ retracement or e5tensions
Speculator: +ut your profit potentail is very limited if you enter in the midrange or the
toprrange.
<O=<O=#02#: in ur e5ample, it seesm u suggest entering the trade in one shot.
Speculator: +ahisaa+: no
<O=<O=#02#: how do we add positions to a winning trade9
Speculator: <O=<O, you may enter partial and keep adding at higher swing pivots, I do
that, that's money management and totally different thing
<O=<O=#02#: fine tks. anyother signal u rely for adding positions +oss9
Speculatorthat's around '012 now put a stop +elow the prior swing low '0&. and pray I
mean it seriously.
Nlokwani: Speculator at this point we have no confirmation that a trend change has
occurred
Speculator: we are 3ust speculating +y taking a position after some sideways move the
price takes off. until price moves a+ove a prior swing pivot the trend change is not
confirmed in this case the prior swing pivot is $/'1./$