Learning Technical Analysis Q&A

[Des P]

Thanks for the Info Tech/a
Understand, such little time
In the same boat
Cheers

 

[Sir Osisofliver]

Hi Tech,

Just wanted to say you are doing a great job in here. I feel your pain with the task at hand and I encourage you to keep it up...it was something that I was planning on doing with the newbie thread but ran out of time and motivation at the daunting task it presented.

There was something that I wanted to add to your material in relation to pivot points... something that took me a while to learn when I was starting out that I only learned because of my habit of reviewing successful and unsuccessful trades; no one every told me...but this is your show. Are you happy for me to post it here or would you like me to PM the commentary across to you so you can decide whether to include it or not?

Cheers

Sir O

 

[tech/a]

Hi Tech,

Just wanted to say you are doing a great job in here. I feel your pain with the task at hand and I encourage you to keep it up...it was something that I was planning on doing with the newbie thread but ran out of time and motivation at the daunting task it presented.

There was something that I wanted to add to your material in relation to pivot points... something that took me a while to learn when I was starting out that I only learned because of my habit of reviewing successful and unsuccessful trades; no one every told me...but this is your show. Are you happy for me to post it here or would you like me to PM the commentary across to you so you can decide whether to include it or not?

Cheers

Sir O

Sir O
Anything you wish to add just go ahead.It maybe worth PMing
Me the info so I can have it put in the locked section--- that way it won't get lost.
If anyone has anything technical they think worth getting posted and locked just pm it to me and I'll get it organised

I've decided to simply to answer questions as they come up on the boards from posts by myself or questions from others.Or if I feel there is something that people should really be aware of.
It is by no means exhaustive. I'll only put up that which I feel is important
In the analysis. Many would want to add more--- personally I want to add less!

 

[Lone Wolf]

What is a soft pivot point? This is where the closing price in the bar to the right of the pivot closes within the high low range of the pivot bar. This is normally accompanied by a volume indication and is indicative of a consolidation pattern (the stock moves sideways instead of retracing). The stock merely "rests" before continuing the established upward trend and is frequently accompanied by outside and inside bars. I frequently see a lot of traders exiting at this point, depriving themselves of valuable upside potential.

What is a hard pivot? This is where theclosing price in the bar to the right of the pivot closes outside the high low range of the pivot bar. These kinds of bars give a higher quality reference point for a retracement pattern as opposed to a consolidation pattern. I use a bollinger band with only a two day sample size to determine the size of the deviation from the pivot bar. Simply put, the higher the deviation from the pivot bar, the more likely the retracement pattern will emerge.

Sir O,

Did you update that correctly? The bar represents price movement, with the close of the bar representing the closing price. I don't believe your addition in red adds any more info compared to the original.

I don't mean to tell you how to write, just want to make sure it's really what you meant to say. Thanks for your efforts by the way.

 

[tech/a]

Sir O,

Did you update that correctly? The bar represents price movement, with the close of the bar representing the closing price. I don't believe your addition in red adds any more info compared to the original.

I don't mean to tell you how to write, just want to make sure it's really what you meant to say. Thanks for your efforts by the way.

Yes it does.

Defines Soft and Hard Pivots from the Pivot description.

What's a pivot point? A pivot is a minimum three bar structure where the middle bar (the pivot bar) has a higher high and higher low than the bar on either side. (For a high turning pivot - the reverse is true for a low turning pivot).

Sir "O"
Didnt take long eh!

 

[Sir Osisofliver]

@ Tech I was busy and distracted. Perhaps I should change my sign off to Sir "Doh"

@ Lone OHLC (Open High Low Close) It's the close which is arguably the most critical of the four data points, and this is the determinant I use to distinguish hard and soft pivot points. Closes within the HIGH LOW range of the pivot bar = SOFT. Closes outside the HIGH LOW range of the pivot = HARD. The larger the differential between the pivot range and the closing price of the confirming bar = the harder the pivot and the greater the certainty.

This is easily visible in spike reversals or candlestick shooting stars, very high probability involved in those formations. I've got another example to the one I placed in Tech's thread. This is one that was more difficult to read and I took less out of it than I should have....but my rules still kept me in profit. It's and FLT Long - I'll chart it up later if I get time.

Cheers

Sir O

 

[Sir Osisofliver]

Here's how the AWE trade played out...



Held it since Late January, out in Late March, back on the watchlist it goes.

Cheers

Sir O

 

[kid hustlr]

Sir O,

Obviously I'm late to the party here so apologies for re-hashing.

With regards to the AWE trade, after your initial entry there were several 'high' hard pivots which occurred. I note that you used these to form your trendlines.

Why did these pivot points not generate sell signals? Why did you choose to enter the trade on a hard pivot low but these hard pivot highs did not cause you to sell?

Does the hard pivot low hold more weighting??!

 

[Newt]

More please?!

There were some great posts in both threads. Really short term trades has always scared the heck out of me, but the price action posts in here ring true. Loved the inside bar post for example.

Realise it take time to post. Can anyone recommend good sites or books for VSA/Price action education?

 

[tech/a]

More please?!

There were some great posts in both threads. Really short term trades has always scared the heck out of me, but the price action posts in here ring true. Loved the inside bar post for example.

Realise it take time to post. Can anyone recommend good sites or books for VSA/Price action education?

http://www.tradeguider.com/mtm_251058.pdf

Plenty here
Worth finding a color printer and printing it off and binding it up.

 

[Newt]

http://www.tradeguider.com/mtm_251058.pdf

Plenty here
Worth finding a color printer and printing it off and binding it up.

Thanks Tech - will check it out

 

[Craton]

Thank you tech/a and Sir O for both taking the time and having the want to enlighten and educate.

I've always been amused at the Fundamental v Technical argument and more so as to why one would follow/adhere to one over the other. Of greater interest to me is seeing the way that a stock with what appears to have decent fundamentals, how it can be so brutally punished by the market for no apparent reason. The T/A threads have proven invaluable in understanding the mechanics behind this move when logic would dictate otherwise.

That being so, I've come to appreciate even more so the work that tech/a and Sir O have done here within ASF. The posts, the links, the PDF's, the replies et al, have sparked a great interest in learning more about what the chart is telling me. Of course I understand that the chart, any chart on it's own isn't the be all, end all (thinking black swan events here) but gee, what a picture it paints!

Thanks again for the info, the chance to learn at my own pace and best of all, the free impartation of knowledge. Now that's brilliant!

Cheers.

 

[BossMan.]

I recieve a number of emails from people who are looking for guidence and specific information with regard to T/A.

Most are at entry level.
Many seem to want to be able to use T/A but have no idea how to apply it.

The subject is infinately variable and not something I want to try and plough through over months if not years.

BUT
My view is most people turn a very simple methodology into a more complex one under the guise that the more complex must be the more successful.

Thats plain wrong in my view. Very valuable and indeed profitable T/A can be applied very simply.

Im wondering if there is an intrest in some introductory level T/A being posted by myself based upon the practical application of T/A in a discretionary sence which could lead people into investigation of ideas in a Systematic type level.

I will obviously have a bent towards what I think is the most benificial and wont be wasting time on superfluous Oscillators/Indicators which Ill leave to the reader to investigate.
I will touch on those I think are helpful in situations and happy to discuss and have input from others who use their favorites.

I would ask Joe for this to be a sticky thread much like Sir O's fundamental type thread.
It would be something that I would launch as time allows.

Interest??

As I know it will take lots of time (Which I dont have spare).
If there is enough interest then Ill take the time over a few sessions to knock it up and get started. If not then will just post snippets here and there as per usual.

I think Charts and notations are best for visualizing practical application.
We could also run some test analysis live.

I will also touch on Position sizing and risk---if wanted.

Hey Tech, found your thread really interesting even though I came across it 10 years late. i am sure it is all still extremely relevant, I am wondering what software you tend to use for analysing charts? Do you use the web based trading tool most banks offer on your trading accounts? Or have you installed/purchased some software for analysing the charts?

Curious to know apologies if you mentioned this on your thread.

 

[tech/a]

Amibroker for Charts,Searches and basic stuff
Interactive brokers for Realtime
Python based proprietary software for system design.