Trying hard to convince my friends with "ridiculous analysis"

Hi,
Taking forward my "ridiculous analysis" and adventures with chart patterns.This post is in relation with the previous post on Suzlon (link below under "Related Post").Check out this new chart ,I have use the same chart ,same stock,and the same chart pattern.The target this time I have given "appears achievable", below are some details of the chart.

Suzlon, as it broke down and made a Symmetrical Triangle Pattern.The measuring move target will be approximately 40 as the width of triangle is 33 and it broke down from 73 level.The target sounds achievable and trade appear quit lucrative.If you check the previous price action it made a low of around 33 during the bear market.Therefore 40 seems all the more convincing.I can very easily build a bear case for the stock with this kind of analysis.


This post is the last one in this "Fun with Chart Patterns" series,if you want to have more entertainment, you need to do the following.
1)Find a stock 50 Rs stock or under
2)Check out it's chart and find a bearish chart pattern
3)Chances are high that all patterns will give negative targets
4)If you are feeling lazy to search then check out TTML,DLF,HDIL,ISPATIND,IDEA ,just to name a few.


Why this failed pattern is so common?
The answer is simple it's because we witnessed a sharp V-Shaped recovery after the bear market and the election result gap, just made the things worst for chart pattern followers.And now when "Time" is finally catching up with "Price" we are getting this pattern. Trend-lines drawn to make this pattern will get violated someday or the other.In these cases it is on the down side,giving unreasonable negative targets 


Now my question.
If the break of trend line was on the upside,would you consider buying this stock?
All the chart patterns if they give bullish targets, will find people lined up to put their hard earned money in that stock idea.The bullish targets will always be possible as a stock can rise to infinity.However the downside targets are limited to zero!!It seems even the ancient mathematicians had "the bullish bias" they never put a ceiling on the numbers but made zero as the base number!! 
Cheers
Suzlon Technical Chart Quote trading Chart pattern study Short term movement important Symmetrical triangle pattern failure not reliable


Related Post
Suzlon : Short with a target of -30 (yeah right minus 30)!!

Suzlon : Short with a target of -30 (yeah right minus 30)!!

Hi,
I have been follow Suzlon for sometime now.Being a follower of technical analysis and chart patterns,I noticed this Symmetrical Triangle Pattern.If a stock breakouts or breakdown from the converging trend lines,it is believed that it will continue to move in the respective direction.A target is generally equal to the width of triangle.This method is popularly known as "the measuring move" with respect to chart patterns analysis

Check the chart given below of Suzlon, as it broke down and made a Symmetrical Triangle Pattern.The measuring move target will be approximately -30 (minus 30) as the width of triangle is 100 and it broke down from 70 level.If it had broken the trend-line on the upside, the the target would have seemed possible,specially as we are in this bull trend.

Now -30 is impossible so we will swiftly do away with this chart pattern.But if we see a similar chart pattern in an intraday chart,we will trade it,and might trade it profitably.That reinforces our belief in chart patterns.
I have got nothing against chart patterns.I just want to highlight the psychological aspect of how we process the information which we get by charts as per our convenience.We bend the rules to prove our point.Just as I have done here!! Uploaded an obvious failed chart pattern out of so many successful chart patterns.But I want you to think about it's effectiveness when logically the target sounds possible......so will it work with some other stock, some other time ?
Suzlon Technical Chart Quote trading Chart pattern study Symmetrical triangle faults failure useless problem never works psychology percent returns measuring move

Related Post
Trying hard to convince my friends with "ridiculous analysis"

Download - Stock Screener based on Narrow Range Seven (NR7) Strategy

Hi,
Continuing with the Narrow Range Seven (NR7) Setup, I have made this simple stock futures screener.


You can download it from here


How to update the data?
You need to follow the steps given under to update the data, to reach the desired results.


1) Download the end of day (EOD) data from National Stock Exchange site (http://www.nse-india.com/)
2)Copy the Stock Symbol, High,Low, and Close data from the downloaded file to the stock screener file, under the respective columns at the end of the file (select the appropriate cell the press Ctrl and Down Arrow to reach the end of file)
3)Then update the Date for current data
4)Once you have copied all the data with date at the end of screener file.You need to use the Filter at the top to sort the data
5)First sort the "Date" column, by using the drop down arrow and select "Sort Newest to Oldest"
6)Then sort the "Symbol" column by selecting "Sort A to Z" option
7)That will complete the process, the screener will show the stock futures which made the NR7 price bar today


To further arrange the data for your convenience you can uncheck  previous dates now and select only today's date
Similarly you can uncheck the "Blanks" option, withing NR7 column filter to get specific screened stocks only


Updating this stock screener is a little tricky, at least for someone who is new to Microsoft Excel.People familiar with Microsoft Excel will find it very easy.Once you get used to updating the data, it will not take more than 2 minutes to find stocks that are making NR7 price bar today.


A Few things to take care of :
1)Make sure that you always have at least 10 days data in this scanner because the scanner needs that much data to work properly.As you get the new data you can remove the old data so that the file size remains small.
2)Be very careful that date and stocks are arranged as per above steps
3)To check whether you have done all the things correctly.Always refer the stocks range for today it should be the least as compared to past seven days (including today).This should be done with the help of a chart.
4)As always ensure that the high, low data is not erroneous.Ignore the first minute data if you are updating the data manually.
5)The screener currently contains stock futures data as I follow futures only.You can make you own stock price database or track your watchlist only for NR7 Setup


If you face any problems using this screener you can send me a mail or put your query below in the comments section.Hope that you find it useful in your trading.Good luck
Cheers


Related Posts
Narrow Range Calculator
Narrow Range Seven (NR7) Setup Calculator based on Welles Wilder's True Range

Download - Narrow Range Seven (NR7) Setup Calculator based on Welles Wilder's True Range

Hi 
A few days ago I had uploaded Narrow Range Seven(NR7) Calculator.While the original strategy of NR7 is based on daily range calculation(calculated by deducting low from high price) and comparing it with the past seven days range(including today).I feel that using true range instead of daily range will lead to better screening of this setup.


I am uploading Narrow Range Seven (NR7) Setup Calculator based on Welles Wilder's True Range.You can download it from here


Apart from the above calculations you will also find an Inside Day and Outside Day Calculator attached.If the day has formed an Inside Day as well as NR7 or NR4 bar, it is considered to be a high probablity setup


As always the "Grey cells" in the Excel File can be changed as you get new data everyday.If you want a modifiable version of this calculator you can download the link under "related file" section at the end of this post.


I will upload a stock screener based on this setup shortly.However that will be a little difficult for people who are new to Excel.
Hope you find it useful in your trading.If there are any problems related to this calculator you can mention that in the comments section or mail me.
Cheers


Related File
Download - Narrow Range Seven (NR7) Setup Calculator based on Welles Wilder's True Range Modifiable (Research Version)
Related Post
Narrow Range Calculator
Download - Stock Screener based on Narrow Range Seven (NR7) Strategy

Download - Average True Range (ATR) Indicator Calculator In Microsoft Excel

Hi,
The concept of Average True Range was developed by J. Welles Wilder Jr and introduced in his book, New Concepts in Technical Trading Systems (1978), the Average True Range (ATR) indicator measures the volatility of a stock or index.

I am uploading the Average True Range (ATR) indicator calculator.You can download it from here.
It's fairly simple to use, all you need to do is update the data in "Grey Cells" Just be careful when you copy the high, low,close data for the day,quite often due to "freak quotes" you get incorrect opening values (happens mostly with illiquid stocks).So I would say ignore a few initial ticks, if that is cumbersome ignore the first minute data.

True Range is defined as the greatest of the following:
1)Today's High less Today's Low (D1)
2)Today's High less Yesterday's Close (D2)
3)Yesterday's Close less Today's Low (D3)

The calculator will be of help if you have a trading system based on a range.Using Average True Range (ATR) indicator or True Range instead of just high and low for the day gives a better feel of the markets.This is specially useful to calculate volatility in a stock or a commodity making limit moves

A few days back I had posted Narrow Range Calculator,this calculator can be combined with NR7 calculator to give a better overall system.I will post a new NR7 calculator based on true range shortly
Cheers

Related File
Download - Average True Range (ATR) Indicator  Calculator In Microsoft Excel Modifiable (Research Version)


Other Posts of Interest
Free Online Forex Futures Trading Strategy
Free Gold And Crude Oil Futures Tend Update