Short term - knowledge library 1.0 (This thread is READ ONLY.... No unauthorised Posts), page-65

STT - Technical Analysis (TA) - I​

mitta
Date: 25/03/16
Time: 15:15:58
Post #: 17361551

Market Wizard Linda Raschke’s Technical Trading Rules

1. Buy the first pullback after a new high. Sell the first rally after a new low.
2. Afternoon strength or weakness should have follow through the next day.
3. The best trading reversals occur in the morning, not the afternoon.
4. The larger the market gaps, the greater the odds of continuation and a trend.
5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.
6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.
7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.
8. High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.
9. The first hour’s range establishes the framework for the rest of the trading day.
10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.
11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings.Principle One: A Trend Has a Higher Probability of Continuation than Reversal
    Principle Two: Momentum Precedes Price
    Principle Three: Trends End in a Climax
    Principle Four: The Market Alternates between Range Expansion and Range Contraction!
12. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

Zandaya
Date: 01/05/16
Time: 20:15:05
Post #: 17646511

Just cleaning up some trading files and came across this Volume Spread Analysis Bars definitions sheet if anyone's interested?




Zandaya
Date: 06/05/16
Time: 19:48:08
Post #: 17699765

What is an UPTHRUST BAR ?

An Upthrust Bar is a wide range bar, with a high volume and closing down. It indicates that the prices were marked up during the day, the Trading activity was High as indicated by the High volume and the prices dropped to near the low (or to the low) towards the closing hours.

Prices will go up during the day on a wide spread and come back to close on or near the low of the day on high volume. All up-thrusts are usually signs of weakness as long as you have an up move behind you or signs o distribution in the background. They arrive in varying degrees of intensities at market tops and are moneymaking manoeuvres that are designed to catch out traders.

What are the Things to Look for in a Uptrust?

1. High Volume and How high?
2. Wide Spread?
3. Close, near or on the Low?
4. What was the previous bar action?
5. Did the bar enter new territory?
6. Is the stock in an up trend?

Be aware on positive news announcements, usually most often than not a stock will be in an accumulation phase or uptrend and this is the perfect time for professional's to unload and take massive profits on unsuspecting retail investors buying in on the hype (mark Up phase) usually trapping traders that have bought in on the highs and ultimately having to sell for a loss or park their shares for a while until next uptrend hopefully comes!! in which case they unload as quick as they can happy to get out at what they paid and hence the makings of our resistance levels..