famous Chinese Proverb goes that, “Give a man a fish; you feed him for a
day. Teach a man to fish and you feed him for a lifetime.”
article is for the newcomers to the stock market trading who have a great
desires to learn the charts and the
skill of trading. So, it’ll be of no
help for those people who make the trading decisions based on some
fundamentals. Something that distinguished a flourishing trader from the rest
is his judgment on when to get in, when to stay out and when to accept a
mistake He has his charts and the knowledge of using it.
us start trading lesson with the Basics of Trends:
per time frames, we can classify Trends into following types:
SHORT TERM TRENDS
short term trend has within it one to several intraday uptrend and downtrends.
Every intermediate trend has within it one to several short term uptrend and
downtrends. Every primary trend has within it one to several intermediate
uptrend and downtrends. So too, every secular trend has within it one to
several primary uptrend and downtrends.
we mean by Bull market is a market in a primary uptrend. What we mean by a Bear
Market is a market in a primary downtrend.
SECULAR BULL MARKET has primary uptrend (Bull mkts) higher in magnitude and
duration as compared to its primary downtrends (Bear mkts). Expect the bull
markets to unfold longer than the bear markets in a secular bull move. Vice
versa for the SECULAR BEAR MKT.A secular bear market has primary downtrends
greater in magnitude and duration as compared to its primary uptrend. Expect
the bear markets to take longer to unfold than the bull markets in a secular
bear move. A Secular trend usually lasts about 10-25 years.
now know what a secular, primary trends and intermed trends are. We know that
each larger time frame has within it smaller time frames of trends. We have an
intermed uptrend followed by an intermed downtrend followed by an intermed
uptrend, so on so forth.
After an intermediate uptrend, the correction should be only 33-66% of that
cycle (One intermed cycle = one intermed uptrend and one intermed downtrend).
Greater the retracement, the increased likelihood that the primary trend has
reversed to the down.
substantive increase in volume during the price decline.
above are some basics if you are playing with indicators as well, then all
the negative divergences, moving average crossovers puts you on Caution Mode.
Most important thing that we all have to remember is that Trading is very
simple. Our mind being complicated is the reason why we try to over complicate
a simple thing. So as in anything simple, we try to leave it as simple as we