An analysis of Technical Analysis by a road side technical stock trader.

Markets are nobody’s servant they do whatever they would like to do

Q.) How do we know which bottom and which high will sustain??

A.) We don’t know the chart is telling you.

Traders never go for reasons, just follow the market action, and try to see what it’s telling you. Can you see the bars at high levels? When bars are not able to stay above high for almost an hour tried to hold it. It means market did not sustain there.

Does it mean anything that market open at upward gap and then print a low lower then previous day’s low? It means selling. Not weakness .It’s profit booking

As a trader our first objective is to protect our capital. It is our weapon, gun powder, trading is a battle and if you’re alive then only you can fight.

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First identify a trend and then plan your trade, in a strong bull market you always buy dips.

How do we know which is a bottom??
One has to take the plunge to test the water.

You all know that support becomes resistance and vice – verse. And whenever there is a breakout from a particular resistance level it becomes support and often the prices come to test these levels.

It’s trading using of the technical analysis of info about support. Now apply very basic thing. Even we had a gap down opening what levels would be tested or where index /stock will find support? So we planned our trade at previous resistance that the moment market gaps down, we will buy index / stock.We were prepared. The moment market opened gap down we went long and we covered our longs at resistance. This is also known as opening reversal. Where would we have exited if it slides further? We would have waited for the breakdown of support and could have gone short.

Traders don’t have ego.

Trend is Friend. Just follow trends.If we are wrong we have to reverse or keep quite by getting out of trade.

Traders never go for reasons, instead of why it’s what.

You should never try to see what market will do, just see what its doing.

Now in nifty 5 min divergence buy and sell set up .As you all know, stochastic can be used
to define market momentum. It’s for intraday traders who trade the five-minute time frame, but it can be used to time entries by longer time frames as well.Price follows momentum in general, but whenever the two diverge, you get buy and sell signals.In ABC move and wave first you get a move A in one direction then a reaction, correction or consolidation in other direction and then again the move in the original direction of A called C.Now oscillator has come down: i.e. your indicators are down but prices are up it means strength. And it’s a divergence. You have a finished B wave. By now you will have move C in the direction of A so it was an intraday buy set up.This 5 min chart is used for making intraday trade and for making entry and exits. We don’t use this for determine the trend.