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OCTOBER 2013

CONTENTS

 Letter from the President - Page 3


 Editor’s note - Page 4
 Indicator In Focus: Trend Analysis Using The RSI by Andrew Cardwell – Page 5
 Four Emotional Battles With the Markets by Deepak Shenoy - Page 10
 Option Trading Using Charts by Abhiji Phatak- Page 13
 Book Review by Sumeet Jain- Page 19

 Forthcoming Events - Page 21


 Past Events’ Updates - Page 22
 Past Webinar Updates - Page 23

This newsletter is produced by the Association of Technical Market Analysts. All comments and editorial material do not necessarily reflect the organization's
opinion nor does it constitute an endorsement by the Association of Technical Market Analysts or any of its officers, of any products or services mentioned Sources
are believed to be reliable at time of publication, but not guaranteed. The Association of Technical Market Analysts and its officers, assume no responsibility for
errors or omissions.

2 | ATMASPHERE OCT 2013


LETTER FROM THE PRESIDENT

Dear Colleagues,

Greetings of the Festive Season! Here is a wish for you and your family this Diwali, that you celebrate your achievements and the
unique faculties each of you has been bestowed upon with, to the hilt.

Algorithmic Trading, a disciplined execution of tested rules, is the next logical step to application of study of market action. ATMA has been able to
assemble together an unprecedented learning programme in the tutelage of Manish Jalan, a well known Algo Trader by way of a two day workshop in
Mumbai in the coming month. Given our not for profit nature, we have been able to squeeze down the participation fee for delegates to an unbelievable
0.10 X of the usual pricing of such programmes provided elsewhere, commercially. I look forward to our membership taking full advantage of such
opportunities. In time, we may be able to take forward such programmes in other vibrant chapters too.

Excellent readings continue to be compiled regularly by our Editor and the present issue goes a step forward further in this direction to continue to keep
ATMAsphere an industry leading publication. I earnestly look forward to a thicker participation in this publication process from all stakeholders.

Asia’s biggest currency trader, outside of the banking system, as per Euromoney polls for the last three years, “Thyaguji”, Head of Forex Treasury at Reliance
Industries Ltd. spoke at the recent Mumbai monthly meeting. Members and non member patrons of ATMA will likely benefit much by reviewing the video
recordings of his presentation on our website, if they could not attend this meeting.

The agenda for the ATMA continues to expand and I will likely never be able to over-emphasize the significance of volunteerism. Thus, I continue to solicit a
wider participation from our membership in owning our various initiatives and creating a wider leadership basis.

Sincerely,

Sushil Kedia

OCTOBER 2013 ATMASPHERE | 3


EDITOR’S NOTE

In this issue -

1. Andrew Cardwell - the legend – explains the concept of Divergence and Ranges on RSI with chart illustrations.

2. Deepak Shenoy elaborately describes the four emotional battles that the traders face at marketplace.

3. Abhijit Phatak illustrates how the basic tools of technical analysis can be employed to analyse and trade options’ charts.

Sumeet Jain reviews “Trade Chart Patterns like the Pros” by Suri Duddella.

ATMASphere is only expanding the subscribers’ list each month. We are truly thankful to each of you for the publication’s success. We expect you
to continue writing and at the same, motivate your fellow members in the technical analysis fraternity to do the same.

Please send in your contributions and feedback to editor@atma-india.net. You can also subscribe to ATMASphere completely free by clicking here.

Sincerely,

Meghana V Malkan
identify and monitor the current trend. Of course, the length of the moving
INDICATOR IN FOCUS: TREND ANALYSIS
average selected, or time period assigned to the oscillator used, should be

USING THE RSI predicated on whether it is for shorter term or longer term trading.

BY ANDREW CARDWELL DIVERGENCE

The RSI was originally developed by Wells Wider (Trend research,


The ideal indicator would be one which offered the capability to identify and
Hendersonville NC) in the late 1970’s. It was designed as a momentum
monitor the current trend, highlight overbought and oversold extremes
oscillator to help identify divergences (non-confirmations) between price
within that trend, and give early warnings of a trend change. The Relative
movement and momentum. The basic premise was two-fold:
Strength Index (RSI) is such an indicator, offering the best of all worlds.
1. That momentum would peak before price in an uptrend or bottom first
in a downtrend,
The RSI is probably one of the most dynamic and powerful indicators
2. After a correction as price made a new high (or low), momentum would
available to today’s traders. One of the most widely used, it is available on
fail to make a new high (or low), and not confirm the new price
almost every technical analysis software program. It is also one that is most
movements.
often misunderstood, misused and underrated. The RSI can be used as
This non-confirmation is characteristic of most momentum based indicators
either a completely independent trading model or an enhancement of your
and has been duly noted and accepted as divergence. Basic price/momentum
current technical approach. As a completely independent trading program it
divergence can and does help to identify an extreme overbought or oversold
can be used for identifying: Trend, Support and Resistance,
condition in the market’s momentum. However, most traders fall prey to
Overbought/Oversold Levels, Divergence (Bullish/Bearish), Trend Change and
this concept of divergence and see it as the end or reversal of the prevailing
Reversal, and Price Targeting.
trend of the market. When Bearish Divergence develops, the Bears come out
of hibernation and want to sink their claws into what they feel will be the
Most technical indicators employed by traders can, in general, be categorized
next Bear Market. As Bullish Divergence develops, the Bulls are ready for a
as either trading or trending technical studies. Momentum oscillators are
reversal of trend and the start of a Bullish stampede to the upside.
usually considered to be trading indicators, as they use market volatility to
identify overbought or oversold valuation levels. Moving average systems
would be considered trending studies, as they smooth volatility to help
OCTOBER 2013 ATMASPHERE | 5
All would be right with the world if markets were to reverse from simple
divergence. But there are times when sentiment and momentum are so
strong that the market continues to make new highs (lows), which will keep
the RSI at overbought (oversold) levels for extended periods of time.
Momentum and price corrections, when they do materialize, are usually
sharp and swift. After these brief respites the market is then ready to
resume its normal upward (downward) trend. With each successive new
high (low) and divergence formed, anxious traders are ready to call for a top
(bottom) and reversal of trend. However, in strongly trending markets,
multiple divergences can and do develop, which only lead to corrections of
the overbought (oversold) condition of the market. If a trader attempted to
take positions based solely on divergences, he or she would need deep
pockets and eventually exhaust his or her trading capital.

IMPORTANCE OF TREND
Most traders and analysts use RSI as an oscillator to identify
overbought/oversold levels and divergences, but those are just two of its
analytical applications. The RSI’s more dynamic and significant contributions
as a tool are its ability to:
1. Identify the current trend and keep the trader positioned property in
the direction of that trend; and,
2. When market conditions develop, give early warning of a possible
impending trend change, whereby the trader can reverse the position.

Since markets generally trend approximately 60-70% of the time, trend


analysis, identification and change should be foremost in the mind of the
trader. The ability to recognize a trend change quickly, reverse a position, The parameters for the RSI values are 0-100. Extremes for overbought and
and trade in the direction of that next trend is the skill which traders must oversold levels vary slightly, depending on the period value selected by the
develop to be successful. trader’s perspective. Day traders or shorter-term traders will generally
employ values such 3, 5, 7, or 9, and longer term traders usually use either 9,
By having a position in tune with the trend, the trader will have the 14, or 21. The original value of the period established by Welles Wilder was
opportunity to participate in the bigger market moves which generate larger 14, which was based on being the half-cycle length of the 28 day or lunar
profits. When positioned properly with the trend there are also fewer cycle. Using the 14 period value on close as the standard for most of the
trading decision that have to be made. Since markets trend, any surprises markets we follow, we use the following as guidelines:
which may develop in market activity are usually in the direction of the RANGES OF RSI:
intermediate and longer term trends. 1. “Normal” Range: 30 – 70
2. “Uptrend (Bull Market): 40 – 80
3. Downtrend (Bear Market): 20 – 60
4. Trading Range: 40 – 50 points

RSI RANGES

OCTOBER 2013 ATMASPHERE | 7


bullish, momentum takes prices to higher levels. We adjust the range of RSI
to account for these higher levels. Using the same 40 point range based on
the 30 and 70 point values, Uptrends show 80 as overbought and 40 as
oversold. As long as the market stays within the 80/40 range (uptrends), we
should see prices make higher highs and higher lows. When sentiment is
extremely bearish, momentum normally takes prices to lower levels due to
liquidation and the absence of buying. Applying the same 40 point ranges for
downtrends, 60 shows as overbought and 20 as oversold. As long as the
range of 60/20 remains intact, we should continue to see lower lows and
lower highs. Taking note that the range has shifted from 80/40 to 60/20
should be a strong indication that the trend has shifted from being in an
uptrend to being in a downtrend. By employing range analysis to RSI, not
only can a trader identify uptrends from downtrends, but he will also stay
with the trend longer than he normally would have and hold a position for
maximum capital appreciation.
We consider the “normal” range to be the levels between 30 and 70, which is
where 60 – 70% of trading activity takes place. When a market is in a gradual
uptrend (or downtrend) the RSI will normally ebb and flow within this range
as the market trends higher (or lower). The levels for an overbought market
can range from 70 up to 80 or 90, depending on the time period selected.
For an oversold market the range may be from 30 down to 20 or 10. Taking
the average of the overbought and oversold values we established 80 and 20
as better values for consideration of overbought and oversold levels. The
standard 14-period RSI normally stays within a range of80 and 20.
People are bullish by nature, so when markets start to move we must adjust
for this shift in sentiment and psychology. When sentiment is extremely
the “3 Keys to Success,” Trading Program, Patience and Discipline. Follow
your trading program, have the patience to wait for the signal and the
discipline to stay within the parameters of your program and stay within
yourself.

Andrew Cardwell, president of Cardwell RSI EDGE, Inc.,


(www.cardwellrsiedge.com) provides consultation and
commentary for his RSI course students and his
Cardwell Private Client Group. He has taught his

proprietary RSI Basic and RSI EDGE courses to individual to students in 27


countries. As a very respected and sought-after lecturer, he has presented at
some of the most prestigious worldwide financial conferences. You can reach
him at cardwellrsi@gmail.com.
As an exercise to further educate yourself, take the time to go back and
review your trades over the last 6-12 months and apply the 80/40 and 60/20
range rules. You will probably realize that you were positioned properly in a
trend, and even though you made money on the trade you offset the
position much too soon. If you lost money on a trade, you were probably
short in an uptrend (80/40) or long in a downtrend (60/20).

THE “3 KEYS TO SUCCESS”


If you include the guidelines which I have presented here for RSI range
analysis, I believe you will find that they will help you make better trading
decisions and stay in tune with the trend. As a final note, always remember

OCTOBER 2013 ATMASPHERE | 9


Brett Steenbarger, in “Accepting the Obvious” gives an example of a victim of
FOUR EMOTIONAL BATTLES WITH THE childhood abuse:

MARKETS “A victim of abuse in childhood insists that her father was caring and
minimizes the pain of her childhood, despite clear evidence that she was
By Deepak Shenoy sexually molested, physically beaten, and frequently humiliated. She insists
that she must have done something wrong to upset him, and will not use the
This article was originally published in the MarketVision Chronicle at
term "abuse" to describe what she went through. She undergoes periods of
http://www.marketvision.in and is republished here with the permission of
depression when, even now, she reaches out to him, only to be rejected”
the Author.

Traders face psychological battles every day – here’s four of them that you We tend to do this all the time, ignoring reality in the face of something more
might identify with. attractive. Among startups recently, there is a tendency to focus on being
entrepreneurs and gathering brownie points from the mere status, than from
The Disastrous Denial
the actual startup itself. I heard one of those in the startup “ecosystem”
To any market player, most market moves are astounding. They surprise
mention that we shouldn’t talk about how low past and recent exit
both in the direction and magnitude of the move. Stocks move against your
valuations have been, because it will discourage new entrants. The denial of
careful analysis, and the first reaction that we get is one of denial. It’s easier,
the great startup non-story is simply another concept where we will ignore
for our brains, to pretend that what we need to happen, is what should
the facts to enhance our needs. (I’m not against great startup ecosystems;
happen eventually, so everything against our view seems just fleeting and
I’m concerned we are kidding ourselves if we ignore the horribly low
temporary.
numbers that exits have seen)
When a stock starts to fall, you hear voices of support that the markets are
The startup market is a market with real money being made – the statement
full of manipulators who are keeping prices low. (Note: there is much more
that the best is yet to come is as good as saying that India is just emerging
incentive for manipulators to keep prices high, and there are far more
and the best is ahead of us. In general that is true, and has been true of every
instances of market players manipulating to the upside) Even at a broad
great story – Europe, America, Japan and China. But even there, there were
level, we tend to blame a market fall on FIIs exiting, the crisis in Europe etc.
and then, refuse to sell because the India story is still strong.
people that denied there ever was a problem, and in the process, set With the drop in volatility, option premiums fell, and time decay ate a
themselves up for massive failure. substantial portion of option premium. A pure option buy based strategy
would have failed miserably in these years, and it was apparent that at least
The lesson is to question ourselves. In the face of facts, to admit we were
on the Nifty (where options are the most liquid) there were long periods of
wrong, and move on. And more importantly, to focus on the next step ahead,
no-trades-available for someone only interested in buying options. Even for
instead of living in the past. It’s not what you did that’s as important as what
option sellers (like those who wrote straddles) premiums fell so much they
you learn from it and what you intend to do. In life you don’t often stand at
would have to take many more positions to get the same absolute return,
crossroads – in the markets, you will do it every other day. You can’t afford
leveraging themselves hugely in the process – a recipe for eventual disaster
the denial.
when the index moves by a larger amount than expected. They took trades
Why trade when there is no trade because they had to get the absolute return, and in the bargain, got absolute
Traders get addicted to the adrenaline of trading, where success is a sell risk.
point away and adds both to profits and to self-esteem. A trader once told
If there wasn’t an entry point anywhere, there is no reason to take a trade.
me, during a lull in the markets, that he couldn’t sleep properly if he didn’t
Like a friend says: I have a position. Cash is a position.
have a trade on – so he’d take on a Nifty trade just for the heck of it.
Putting on too little money, or too much
I get a lot of mail asking me which stocks to buy. Sometimes there are just no
It’s said that one of the most successful funds at any time once had more
stocks out there to buy. Sure, there may be some stocks somewhere that
than 1,000 stocks in its portfolio. Maybe that works for some people, but
went MACD positive or something, but they don’t fit my qualification criteria.
honestly, having that many positions means, even if you average weight your
At this time, there is no trade – should I dilute my criteria just because I want
stocks, that you will have positions worth 0.1%. Dialogues go like this:
to trade? Should I choose stocks, when there is booming market in
commodities instead, only because I want to trade stocks? Investor: My stock went up 5x!

There are sometimes months when the markets don’t move. The number of You: Wow. You must have made a killing!
big move weeks – when, in a period of a week, the Nifty had moved over
Investor: well, since I have 1,000 stocks, I had only 0.1% of my portfolio in it,
10% - had peaked in 2008 and 2009 (with over 19 such rolling periods each).
so it’s now 0.5%, so I made 0.4%.
2010, 2011 and 2012 saw less than 10 such weeks each!

OCTOBER 2013 ATMASPHERE | 11


You, thinking: Damn. Now I’ll have to pay for his coffee also. patch; his capital had dwindled. Now, buying 1000 shares was too much
exposure, but he couldn’t get himself to trade lesser than that amount.
The point is that if you put in meaningless amounts into a stock, the results
will be meaningless. If you have a portfolio of Rs. 10 lakhs, and you buy Rs. Revenge is for the Movies
10,000 worth of a stock, you are wasting the money – the returns do nothing Jackie Chan often inspires the early trader. You bought a stock; it hits your
for you, and the losses will hurt emotionally (not so much financially). stop loss. Then it reversed and went up. You bought it again. It turned back
and hit your stop. Now you want to do the karate chop and fight back again.
We put in such amounts because we receive a tip from a friend, or buy into
Revenge trading can be absolutely horrible for your pocket; I have made that
stocks because they look good, to give us the satisfaction that we got in, but
mistake many times, and each time I die a little.
with so little money in that a loss won’t look too bad. It’s an ego battle to
desire the upside (the stock went up 50%!) but to have a very small downside You might have gone short one day, and the market opened down. The profit
at the same time. was great but as the day progressed you saw the markets turn around and
eat all your paper profits away, and even gave you a loss as your stop was hit.
Look even at generic asset allocation. To most people under the age of 50, a
Now you eagerly await even a small sign of weakness so you can short the
house is the biggest investment, bank deposits come second and equities a
dirty fellow again.
distant third. This is how they list their investments.
My strategy to deal with this is to go back to the plan. I say to myself that if I
But the house is not an investment, it’s only a place to stay, and unless you
follow the plan, profits will come. There are times to question the plan, but in
are in deep doo-doo you won’t sell it for money (you’ll sell to buy another
an emotionally distressed state (“Revenge!”) it is important to first find the
house, usually a bigger one so you have no cash left). The bank deposit grows
easiest way to calm down. The next trade is a different trade, tomorrow is a
at less than inflation. The only real investment you have is in equities, and
different day.
that’s already a disproportionately small amount. If you change the
perspective that bank deposits and a house are not investments, allocation Deepak Shenoy is the founder of Capital Mind(http://capitalmind.in) which
metrics will change. focuses on in-depth analysis on markets, macroeconomic, and trading. He
lives in Bangalore and tweets as @deepakshenoy .
Another emotional nuance is the embracing of size. A friend told me he
would trade 1000 shares of a stock at a time, but had gone through a rough
OPTION TRADING USING CHARTS
BY ABHIJIT PHATAK
Until a few years back, Options trading in India was restricted to those
following the Options Greeks, which includes various parameters such as
Delta, Vega, Theta, Gamma. There were (still are) Options calculators to find
out the scientific value of Options.

Investopedia goes further and says - Trading options without an


understanding of the Greeks - the essential risk measures and profit/loss
guideposts in options strategies - is synonymous to flying a plane without the
ability to read instruments. You can find it here

http://www.investopedia.com/university/option-greeks/

However, since the past few years, traders in India are now able to get Over the past few years, I have made quite a few observations as regards
continuous charts of individual Options for all stocks and indices that are interpreting these Options charts, and if done correctly, one can get good
traded in Options. This is how a typical Options chart looks like (an hourly trades with a very low risk set-up (which is what every trader looks for). It is
chart of Nifty 5800 Sep CE). still a highly debated topic and many are not yet ready to believe that such
trades are possible. If one has the additional quality of identifying chart
patterns it is very helpful in getting good trades in Options.

The easiest way of trading options based on charts is by following the basics
of Technical Analysis (higher tops, higher bottoms etc.) Most strategies that
are used to trade based on cash or futures charts can be used for Options too
(e.g. Trend lines, Moving average crossovers etc.)

OCTOBER 2013 ATMASPHERE | 13


I have tried to present how one can use Options charts to identify good
trades.

Following is an example of how Tata Steel could have been traded in Options
based on a Trend line breakout in the cash / futures as well as Options
charts):

The August futures contract gave a breakout from a trend line above 207.5.

Rather than using a margin of Rs. 60,000-70,000 required for a futures


contact, it makes sense to buy a CE here, in which one requires only Rs. 2500
per lot, and that can be the full risk for the trade.

Another very commonly used strategy in Options is for hedging. Just to give
an example – if one was long in Nifty futures on 19th September, a day before
the credit policy was announced, and if the trade is to be reversed only on a
trigger as per the trading system, the longs would have been carried till the
morning of 20th September. It is very essential that a trade in futures needs
At around the same time, the 230 CE gave a breakout from a trend line above
to be hedged ahead of an important event.
2.5.
Nifty futures (September):

Studying Open interest in Options:

Based on the chart of the 6100 Sep CE given below, one could have gone The data for Open interest in various Options can also be studied on charts,
short in the CE anywhere between 95 and 105, just before the policy was due and if interpreted well, can be used to get very good trades.
to be announced. The stop loss for this hedge could have been the previous
Following example highlights how the trend in the Open interest could have
day high which was near 125. One would have lost just Rs. 20 in the CE short,
been used to get a good trade in August:
but this helps in holding the long in futures till the impact of the policy on the
market is clear. The 6100 CE expired at 0, thus giving full profit of that Rs 100
premium which was used to go short.
Nifty was in a downtrend till a day before the August expiry and made a low
of 5108.25 on 28th August at around 10.25 am after which it was showing
signs of a recovery.
Nifty 6100 Sept CE:
OCTOBER 2013 ATMASPHERE | 15
The Open interest in these kept falling all the way till expiry the next day, and
the expiry was at 5409. One can imagine the profits in the CEs – 5200 from
30 to 209, or 5300 CE from 10 to 109.

Nifty Aug 5200 CE:

If one was observing the Open Interest in the 5200 Aug and 5300 Aug Calls, it
was quite apparent that the Open interest in these options started dropping
soon after. The 5200 CE was available for less than Rs 30 (a risk of just Rs.
1500 per lot) and the 5300 CE for Rs. 10 (a risk of just Rs. 500 per lot).

A drop in Open interest here means that those who had gone short in these
CEs, were now covering them, which also gave an indication that Nifty is
likely to recover the losses.
The chart is for the combined premium of the 5900 CE and the 5900 PE. This
straddle gave a sell signal at around 350 on 5th September and expired on
26th September near 16.

Nifty Aug 5300 CE:

The above was an attempt to highlight the different ways of identifying


trades in Options based on extremely low risk set-ups. There are many more
such trade setups that a trader can employ and use Options charts for good
gains.

Abhijit Phatak is a Chemical Engineer based in Pune. He has been studying


Options charts for the last 7-8 years and have come up with some
Another good strategy to use Options charts is to get good Straddle shorts. interesting strategies to trade options with ‘low risk setups’. He can be
Following is an example of a September 5900 straddle plotted with a Moving reached on ap1963@gmail.com or you can follow him @ ap_pune.
average crossover to identify trades to go short.

OCTOBER 2013 ATMASPHERE | 17


Now, the more important point:

Those amongst the ATMA membership who have a vision, a strategic string
Most important priority: Career Development of thoughts in place, who have had their brush with changing several jobs
and who would know how the inner world of HRM might be working, please
of ATMA Members polish your shoes and step forward your best foot!

I have to build on an EMERGENCY basis a POWERFUL, INDEPENDENT &


Why are we after all part of this grand FUNCTIONAL Career Development Committee
exercise called the ATMA, the Association
Why can’t we host some webinars inviting Social Media Gurus who can teach
of Technical Market Analysts? ATMA members how to promote themselves in a dignified way on Twitter,
Facebook, LinkedIn, Klout, Google Plus? Why can’t we bring in some Partner of
To be excellent, to be renowned for our pedigree embellished with great a global recruitment firm to teach our younger ATMA members how to write
knowledge and ethical conduct, to be sound in our approach at what we do good CVs and cover letters and how to network to be on the frontline for
in our profession, to be trusted, to be reliable, to be empowered with an all discovering the best jobs?
encompassing feeling of being organized together as a big team?
Go take a look at the Career Development Centre on the website of our parent
Yes, perhaps all of this is true! Yet, all of this is aimed at one key goal and all organization the http://www.mta.org
of these goals will be fulfilled ONLY if each and every ATMA’ite is
empowered with the abilities, skills and attitudes to succeed at the career I need a team of strong-willed, independent minded mad men and women
each has chosen! who have a solitary goal: beat Sushil Kedia & his early team & create an
admirable Career Development Centre which is at least at par with the MTA
and perhaps way more!!

Right at the inception this vision was incorporated into the design of our Get going ATMA! Long way to go and yes the world must yield the place to us
website. A powerful JOBS-BOARD exists where not only our members can the Technical Analysts that we deserve!
build their fully visible CVs they can also build additional CVs with
Does ATMA belong to you? If not, who does it belong to?!
anonymous values in key fields such as name of current employer etc. etc.
All of us must TORTURE TEST this tool, now and as many problems or Then within the Job-board is a feature for incorporating the profiles of your
errors or deficiencies are found must be noted and written to companies with a nice write up and logo you can make yourself a featured
webmaster@atma-india.net. Have patience while you critique the employer on this powerful tool that this mad 43 year old man could envision
deficiencies! Don’t stop at just pointing out what is lacking, but have the even at inception when he had no ideas of how a website is built. If I can
tenacity to stretch your thinking into proposing a solution. Difference stretch my brain and body so far, what stops you mightier younger, energetic
between criticism and leadership is that leaders identify what is missing smarter folks to beat me blue and black?
and figure out how to fix it! Own ATMA now! Some few of us at the fight
are getting bored of being its solitary owners.
small attention to detail changes the overall look and feel. All in all if you are
BOOK REVIEW: TRADE CHART PATTERNS
looking for something based purely on price action then this is the book for

LIKE THE PROS you.

Author: Suri Duddella Believers of “Random Walk Hypothesis” say that if you change the Aspect
Ratio of the charts these patterns might change and the studies may become
ISBN-10: 1604027215
erroneous. Rather, the right approach would be to plot a chart, look out for
(ISBN-13: 978-1604027211) patterns and try to trade. You will be overwhelmed by the magic. They just
work beautifully. This book is a must have in a trader’s library and I most
This book is clearly “By a Trader, for a Trader”.
certainly recommend it to the readers.
Trust me this phrase sums it all.

A very crisp book which in the first few pages answers most of the questions
Mr. Sumeet Jain CMT is a Senior Manager, Institutional
practioners of Technical Analysis have. Why patterns? Why not indicators?
Research Desk, Asit C Mehta Investment Intermediates
What is the statistics? What is the success ratio or percentage? How do I
Ltd., Mumbai. The author may be reached at
trade using patterns? Will they suit my time frame? What will be the targets?
sumeetsj@gmail.com.
Where will I place stops? All these questions are answered in the first 20
pages. And then the book starts. All the doubts which should arise after
acquiring the knowledge are answered first!!

The thirteen chapters sum it all up. Right from the basics like charts
construction to start with, dwelling into Fibonacci, then into Harmonics,
Channels, Bands, Elliott Waves and then Exotics. Event based patterns is
something that is covered in the end and deserves a separate mention.

All the patterns are clearly depicted on charts with proper explanation. Rules
of entry, stops and exits are mentioned separately in point-wise manner. This

OCTOBER 2013 ATMASPHERE | 19


We've have instituted a separate committee
altogether titled, "Women in Technical
Women in Technical Analysis Analysis". If you can think of a better name that
may be turned easily into a good &
RESPECTABLE acronym using the first letters of
each word, please do suggest.
A Necessary Initiative: Are markets a man’s world? Is Technical
Analysis a man’s domain? Answer is clearly no, ATMA will fund an extra monthly meeting on any good educational topic
since markets as the final masters are the EACH Month for AT LEAST the next 12 months under the Women in Technical
ultimate level playing field. Yet, for various Analysis series where the speaker, the delegates and the volunteers will all be
legacy reasons markets have continued to be women. A well appointed 80 seater conference hall with all modern business
dominated by men, so far. amenities in perhaps one of the most secure & safe buildings of Mumbai –
Increasingly a larger and larger percentage of women are excelling at markets right at a well known Commodity Exchange is being worked out as a
and we do know many good Technicians such as Connie Brown, Louise permanent venue!
Yamada, Katie Stockton to just name a few have made their mark on the
This would make Mumbai the only city in the world of Technical Analysis
globe! It’s time for India to discover its own Ms. Browne, Ms. Yamada & Ms.
where there would now regularly be TWO monthly meetings; it would also be
Stockton!
a first of its kind anywhere in the world, Educational Monthly Meetings only
The goal clearly is also to include any number of women Technical Analysts for women!
you know and who are not yet ATMA members, to bring to the main-stream.
So here is a special committee to be comprised
Speak to them, let them know the exceptional work ATMA has been
ONLY of women, FOR the women and BY the
producing and get them to become members so that there are at least a 100
Women at the ATMA. Your mandate as a
women members of ATMA in the very near future to take your representation
Committee is way larger: To represent, ascertain,
to at least 20% and hopefully as numbers grow the spiral effect will someday
decipher and then achieve the goals for Women in
take you closer to 35% or even more than 50%!
Technical Analysis.
Of the 500+ members of ATMA active at this point, only 24 are women. That's
"I am surprised & IMPRESSED that you have Soliciting Women
an abysmal number. The truth is a far bigger percentage of women are
critical mass to hold a women-only meeting! It’s Volunteers:
technical analysts than the percentage women members in ATMA! Why? I
a wonderful thing if you can pull it off. I’d love
don’t have any good answer, but would guess that networking, professional While a formal new fully
to speak to the group someday"
link building and such other extracurricular activities haven’t been easier for empowered Committee
- Katie Stockton , Vice President, MTA
women. is being built as “Women
Oh the Women Technical Analysts of India, write in Technical Analysis”
Here is a special initiative for You - the women Technical Analysts of India, to us for membership enquiries on: you are welcome to join
way more organized, crisper and resourceful than what has been done so far membership@atma-india.net and for all other Committees
for the general membership, at large. volunteering on volunteer@atma-india.net! too!
FORTHCOMING EVENTS

CERTIFIED ALGORITHMIC TRADER PROGRAM {ATMA – CAT}

Date – 7th and 8th December, 2013 (from 9.30 am to 5.30 pm)

Venue - PVM Gymkhana & Gymnasium, Maharashi Karve Road, Churchgate, Mumbai - 400021,Maharashtra

Speaker - Mr. Manish Jalan, a B Tech and M Tech in Mechanical Engineering from IIT, Bombay, he is the

Managing Director and Co-Founder of Samssara Capital Technologies LLP. He has over 9 years of expertise in the areas of profitable
systematic quantitative trading strategy development. Manish is a seasoned speaker in the areas of algo trading and quant trading with
investors and traders globally. He is also a consultant with Dun and Bradstreet, The NSE, Bank of America, ATMA and KPOs like
SGAnalytics on building models for hedge funds globally.

Topics to be Covered on Day 1 - Topics to be Covered on Day 2 -

1. Introduction to Algorithmic Trading (AT) 1. Jargons used in AT

2. Mathematical Elements of AT 2. Business Aspects of AT

3. Lifecycle in Development of AT 3. Global Trends in AT

4. Introduction to Risks in AT 4. Where India stands in AT

Registration Fees:
Non-Members - Rs. 15,000/- for two days (inclusive taxes)
Members - 50% Discount - the amount would be Rs. 7,500 for 2 days.
Directors / Owners of Member Firms of BSE - 33% Discount - the amount would be Rs.10,050 for 2 days.

OCTOBER 2013 ATMASPHERE | 21


PAST EVENTS’ UPDATES
CHAPTER DATE SPEAKER TOPIC

Indore 14/09/2013 Vivek Gupta Rationality to


Irrationality CHAPTER DATE SPEAKER TOPIC

Bengaluru 29/09/2013 Vishwanath Pivot point


Gangavati Trading using
Technical Analysis

Kolkata 21/09/2013 Kaushik Sen Following Market


Trends with the
Help of Options

Kolkata 19/10/2013 Manish Pareek Integrating


Macroeconomic
Principles with
Mumbai 28/09/2013 Rajeev Darji Insight on Chart
Technical Analysis
Pattern Analysis

Ahmedabad 20/10/2013 Mukul Pal The New Passive

Delhi 28/09/2013 Mukul Pal The Active Money


Management
System

New Delhi 26/10/2013 Ajay Aggarwal High leverage,


Low Risk , High
return and Low
Stress

OCTOBER 2013 ATMASPHERE | 23


PAST EVENTS’ UPDATES (CONTD…) PAST WEBINAR UPDATES
CHAPTER DATE SPEAKER TOPIC DATE SPEAKER TOPIC

Mumbai 26/10/2013 Venkat USD/INR - 21/09/2013 Vikrant Goyal Trading using Japanese Candlesticks
Thiagarajan Outlook

Bengaluru 27/10/2013 Dr. Musa R Kaiser Technical Analysis 28/09/2013 Subhadip Nandy Using Bollinger Bands to Day trade
OF Fundamental
Analysis of Nifty

05/10/2013 Siddhali Desai Training for CMT Examinations –


Levels I, II and III.
13/10/2013
OCTOBER 2013 ATMASPHERE | 25
Benefits of Membership with the ATMA

Apply for your ATMA Membership Today!


OCTOBER 2013 ATMASPHERE | 27