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small fry
horse trader
Joined: 03 Jun 2008
Posts: 131
Location: Abu Dhabi
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Posted on Tue 02 Jun 2009 08:52 by small fry
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Hi;
This observation is not intended to criticise any particular member who makes assumptions based on technical analysis or to belittle anyone or intended as a personal attack on anyone merely an attempt to learn.
I myself am not an analyst or related professionally to the field. Like others(I hope) I look for short and long term investments/trades (Stocks and otherwise) that can offer a decent return and sustained growth.
Everytime someone makes a suggestion that something will "breakout" or "fly" or "reach the sky" based on technicals , I become curious and investigate. Some examples like Air Arabia for example SMA20 and SMA 50 have crossed and passed the upper limit of Bollinger bands. This is interpreted as indications of "take-off", but based on what? RSI says it is overbought above 70.
What difference is there to say GNAV which has been languishing around 0.65 +/- 3 fils which has a similar pattern to AA. What about Tabreed that has a totally differnet pattern yet is turning "hot".
I guess my question is why would you use say combination of SMA20,SMA50 and Bollingers and not include RSI's. Or why use MACD's instead with SMA25's and RSI. What is the formula?
All I find based on my simpleton logic from SMA's is that the closer they converge just proves the fact that they are stabilising around a price point. Why should anything breakout?
Just an observation and point for discussion
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klaus
charletan
Joined: 22 Apr 2009
Posts: 17
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Posted on Tue 02 Jun 2009 10:01 by klaus
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| small fry wrote: |
| Everytime someone makes a suggestion that something will "breakout" or "fly" or "reach ... |
Small fry , I am happy that you openned this discussion We could learn a lot from different views and experience of other investors ,I am also not a professional in the field or analyst and have noticed that all those different methods of technical analysis will not converge to the same conclusion at a given time .
However , personnally I use those basic tools to justify and back up investments I plan to make .
Good Investment .. |
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sharewadi
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Joined: 19 Aug 2005
Posts: 13389
Location: up the wadi without a paddle
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Posted on Tue 02 Jun 2009 14:55 by sharewadi
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| small fry wrote: |
| Just an observation and point for discussion |
Good observation and good point for discussion. Seems worth making this a separate topic for future reference  .
I have very limited understanding of technical analysis (TA) but my impression is that TA is a reflection of investor's buying and selling patterns, so by using TA for trading, your buying and selling decisions are based on what everyone else is doing. If everyone followed the same TA indicators, then it would be easy but boring since everyone's profits or losses would just follow the market average (less the broker commissions). In reality, traders use a multitude of different TA indicators and combinations of them.
For a successful strategy, you'd have to develop a system that's better than the average, and that requires a bit of effort. Examine historical price movements based on your system, and start trying it out with small amounts.
And remember that there is no TA system that can be 100% accurate, or even close, since investors and traders buy or sell for many different reasons. For example, there's no TA indicator that measures the likelihood of my selling shares tomorrow to buy a new TV, or pay for an unexpected bill.
That said, many traders do use moving averages, MACD, Bollinger Bands, etc. So if you have some understanding of the basic TA indicators, you could trade on the assumption that most other traders are following the same indicators and their trading decisions will be based on those indicators. For example, if a common TA indicator signals that Air Arabia (AIRARABIA) is likely to jump in price tomorrow, and many traders observe that, then the price will jump because all those traders will buy Air Arabia stock in anticipation of the expected price rise...
... Erm, I think I'm going around in circles now  ...
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OnlineTrader
mercenary
Joined: 10 May 2009
Posts: 627
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Posted on Tue 02 Jun 2009 15:17 by OnlineTrader
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| sharewadi wrote: |
I have very limited understanding of technical analysis (TA) but my impression is that TA is a reflection of investor's buying and selling patterns, so by using TA for trading, your buying and selling decisions are based on what everyone else is doing. If everyone followed the same TA indicators, then it would be easy but boring since everyone's profits or losses would just follow the market average (less the broker commissions). In reality, traders use a multitude of different TA indicators and combinations of them.
... |
Sharewadi, you might be write if we only assume that TA is a mathematical tools, which is absolutely wrong.
TA is referred to be a judgment tools/a distinction art , rather than absolute formula like mathematic.
So what makes TAs to act differently is there understanding of the patterns and indicators (also using mixed indicators).
You hear during last three days that market have to take a reversal (including me and SAM and Thaj) which not happened so far.
I believe we made this thought based on some TA tools, so we might lost some profits!, it seems there are many other TAs who enjoyed last three days rallies.
This is the different between TAs.
To put it in a nutshell, TA is only one tool and you need other skills like money management , strategy , and most important emotion control. |
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investor
speculator
Joined: 07 Nov 2006
Posts: 294
Location: Dubai
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Posted on Wed 03 Jun 2009 08:23 by investor
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Good topic of discussion
I am a strong believer in TA, u'll notice this from all my posts in this forum. When I started off in the stock market I bought based on word of mouth  , lost 60% of my capital. This led me to rethink of my failure in the Stock market and thats when I started on TA. At first it was MACD SMA's RSI and stuff then u develop an intuition about READING the CHARTS. All these indicators are helpful as long as u know how to read them and act on it in a timely manner. U need to overcome your emotions and look at TA from an unbiased point and believe in it.
TA helped me recover that 60% loss in capital and survive the recent dramatic fall [Although I haven't made that much IF I stuck to my TA].
Bottom line - TA Works.
Investor.
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small fry
horse trader
Joined: 03 Jun 2008
Posts: 131
Location: Abu Dhabi
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Posted on Wed 03 Jun 2009 09:18 by small fry
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| investor wrote: |
| I am a strong believer in TA, u'll notice this from all my posts in this forum. When I started off in ... |
Could we indulge upon you to share 
My understanding is:
RSI is an indication of volumes bought and relative price rise
MACD is an indicator of how fast something is rising or falling
Comparing SMA's simply shows the general price trend with crossovers indicating strong or poor support.
Candlesticks show prices and range during the trading day with patterns (doji's, dark clouds and harami's) indicating a direction (although this is revealed too late to benefit)
A combination of these is supposed to tell which way sentiment for the share is going. However the trick must lie in what the signs are, where can I find something like that, an online tutorial or similar 
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sharewadi
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Joined: 19 Aug 2005
Posts: 13389
Location: up the wadi without a paddle
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Posted on Wed 03 Jun 2009 15:42 by sharewadi
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| OnlineTrader wrote: |
| Sharewadi, you might be write if we only assume that TA is a mathematical tools, which is absolutely wrong ... |
The only thing I know I'm right about is that I don't know very much about about TA .
Yes, my previous comment was based on looking at TA from a purely mathematical perspective. As you rightly say, there's more to trading successfully than just reading spreadsheets and charts.
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Sher
profiteer
Joined: 13 Dec 2007
Posts: 81
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Posted on Wed 03 Jun 2009 21:09 by Sher
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What I have heard and believe is that the TA is fine to get some indication of the general trend but the market can always be controlled by Market movers or controllers. This could be institutional or private investors with enough volume to change the direction. Some might disagree because overall sentiments can be more powerful in times of bad news or good news and these big boys may not be in control.
I too am not an expert in TA but what I do is use some simple mathmatics combined with some excel skills. I do make some profits sometimes but I have found that even though I cannot control the market, I am able to move the price of shares without much difficulty . If I have to bring the price of any share down , all I need to do is to buy some and next day the price falls  . Similarly if I sell some, the next day the share price will rises up. |
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Dreamer
charletan
Joined: 02 Jun 2009
Posts: 21
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Posted on Thu 04 Jun 2009 04:07 by Dreamer
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| TA is the fundemental of share trading. The trading without TA is known as gambling. May be I'm wrong. I have a simple million dollar question. will the market retest its low please Guys give some suggestions. |
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sharewadi
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Posted on Thu 04 Jun 2009 15:04 by sharewadi
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| Sher wrote: |
| ... all I need to do is to buy some and next day the price falls . Similarly if I sell some, the next day the share price will rises up. |
Yes, I find I have the same effect on the market .
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rafaelopes
pauper
Joined: 05 Jun 2009
Posts: 8
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Posted on Mon 08 Jun 2009 23:20 by rafaelopes
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TA it's realy important to do a good trade.
I use SMA, EMA, DMI, Bollinger Bands, and my favorite and the most efficient: Didi Index. It's made by a brazilian analyst and he is a millionair, worked in a lot of investment banks of US and Brazil, he name is Didi Aguiar. It's a complex strategy, but it's very good.
Investing using candlestick's figure, helps a lot too. Candlestick Charting Explained by Greg Morris it's the best book of candlestick Japanese analysis. I'm realy impress how this analysis work so often! A perfect example that works: In 25/05/2008, PETR4 (Petrobras) made a Bear Abandoned Baby, since this figure, this stock went from R$ 50,09 to R$ 15,94 in 21/11/2008. All investors that use this candlestick analysis, had a great profit!
But, if you invest for your retirement or to your kids school for example, you don't need TA, just look to good companies, with great results and if you belive that this company will still growing, you buy it. |
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OnlineTrader
mercenary
Joined: 10 May 2009
Posts: 627
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Posted on Tue 09 Jun 2009 08:29 by OnlineTrader
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| rafaelopes wrote: |
I use SMA, EMA, DMI, Bollinger Bands, and my favorite and the most efficient: Didi Index. It's made by a brazilian analyst and he is a millionair, worked in a lot of investment banks of US and Brazil, he name is Didi Aguiar. It's a complex strategy, but it's very good.
... |
I am using Amibroker for my TA, I did some searches to find out if there is any AFL (Amibroker Function Library) for above index and I could not find any.
Do you have any developed for this purpose? |
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rafaelopes
pauper
Joined: 05 Jun 2009
Posts: 8
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Posted on Tue 09 Jun 2009 17:55 by rafaelopes
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| OnlineTrader wrote: |
I am using Amibroker for my TA, I did some searches to find out if there is any AFL (Amibroker Function Library) for above index and I could not find any.
Do you have any developed for this purpose?
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Just software form Brazil and US (bloomberg) have this index...
http://img190.imageshack.us/img190/1046/agulhada1.jpg
This is picture of perfect moment to trade, Didi Index is marked in pink, when the green and yellow line crossed on the white, you have a moment for buy or sell, if the GREEN go UP you buy, if the YELLOW go up you SELL.
The picture is from my Broadcast, a brazilian software. And it's a stock option of Petrobras. |
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small fry
horse trader
Joined: 03 Jun 2008
Posts: 131
Location: Abu Dhabi
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Posted on Wed 10 Jun 2009 09:01 by small fry
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Hi rafaelopes;
Does your software track anything outside Brazil, like DFM or ADX for example  ?
If it does you will open a big door for yourself. Perhaps you could show us charts for a couple of stocks from DFM and ADX (ARTC.Air Arabia and GNAV are popular on DFM and AGTHIA,ALDAR,AABAR on ADX) for demonstration purposes only.
If the software is programmable , I found on a forum that the METASTOCk language for DIDI INDEX is:
"Mov(C,3,E) - Mov(C,8,E);
0;
Mov(C,20,E) - Mov(C,8,E);
where MOV is moving average, C -> close, E-> exponential, but actually DIDI index uses Aritmetic Averages."
I don't know how to program that, sharewadi could/can you include it ?
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rafaelopes
pauper
Joined: 05 Jun 2009
Posts: 8
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Posted on Wed 10 Jun 2009 18:09 by rafaelopes
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small fry@
Unfortunately my software is just for brazilian stocks, DJI, NASDAQ and SP 500.
I download two TA Softwares: Aptistock, Amibroker. But I couldn't find anything about DFM and ADX, do you know any free software, so I can program and show you the analysis.
Didi index, is very simple you use three SMA, 3 - 8 - 20. And the best moment to trade it's the moment that the three lines, pass through the candle, and if the SMA 3 stay on the top of them you buy, if the SMA 20 stay in the top you sell. I will show you the two examples.
But you don't depend only on Didi Index, you need to use DMI/ADX to see if have good tendency.
http://img40.imageshack.us/img40/8402/didiindex.jpg
(DJI, 3 SMA)
http://img199.imageshack.us/img199/8242/didiindex2.jpg
(one of the most beaultiful images, Petrobras abandoned baby, and Didi selling to times. PETR down from 50,00 to 15,00. |
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small fry
horse trader
Joined: 03 Jun 2008
Posts: 131
Location: Abu Dhabi
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Posted on Thu 11 Jun 2009 09:23 by small fry
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Rafaelopes;
There is no short selling in DFM/ADX.
FYI
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investor
speculator
Joined: 07 Nov 2006
Posts: 294
Location: Dubai
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Posted on Thu 11 Jun 2009 09:32 by investor
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I have the MetaStock code for this (DidiIndex) but want to get the VB equivalent. Any VB programmers on this forum !
Cheers
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X-MAN
charletan
Joined: 02 Jun 2009
Posts: 23
Location: dubai
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Posted on Thu 11 Jun 2009 18:28 by X-MAN
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| Can someone suggest A book for beginners to understand TA(English), That more suites UAE stocks. |
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moor
opportunist
Joined: 04 May 2009
Posts: 37
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Posted on Thu 11 Jun 2009 20:37 by moor
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| rafaelopes wrote: |
| Didi index, is very simple you use three SMA, 3 - 8 - 20. And the best moment to trade it's the moment ... |
hi rafaelopes u please try btflive.com there u can get uae & other gulf market data.if ok u please explain to us. |
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rafaelopes
pauper
Joined: 05 Jun 2009
Posts: 8
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Posted on Fri 12 Jun 2009 18:25 by rafaelopes
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| moor wrote: |
| hi rafaelopes u please try btflive.com there u can get uae & other gulf market data.if ok u please ... |
Thanks! I will try here.
I think the best way to learn TA, is making a course for beginners and then trying to use some SMA EMA, and prepare your strategy.
Using daily graphics. you can use with EMA 10 and SMA 44. It's very simple and work just in daily graphic.
A book that it's very good for people who use Candlestick strategy, you can download on the internet the e-book: Candlestick Charting Explained - Greg Morris. It's very complete! |
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asatya72
pauper
Joined: 31 May 2009
Posts: 3
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Posted on Sun 14 Jun 2009 12:14 by asatya72
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| sharewadi wrote: |
| Yes, I find I have the same effect on the market . |
Its the same with me, wen ever i buy a scrip immediately it goes down, wen ever i sell that, next reaction is it goes up.
 |
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aqibraza
charletan
Joined: 15 Jun 2010
Posts: 16
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Posted on Thu 24 Jun 2010 14:47 by aqibraza
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I found this discussion very useful
As I am new and just started, I am thinking of candlestick pattern and will try to learn other also. I found one site for the same www.middleeastbulls.com
is there any software for the same that i will download and work
Senior please guide |
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trendpower
pauper
Joined: 27 Aug 2010
Posts: 1
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Posted on Fri 27 Aug 2010 12:25 by trendpower
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In stock market technical analysis, there are various techniques used.
Indicators useful for trending stocks are different from indicators useful for trading stocks.
RSI, and other moving averages are used for trading stocks.
ADX( average directional index) is only indicator useful for trending stocks.
for beginners this is quite confusing but once u learn what is trend, trending stocks, trading stock, you will know the power of technical analysis. |
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khan007
opportunist
Joined: 14 Jan 2010
Posts: 46
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Posted on Sat 28 Aug 2010 10:22 by khan007
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| trendpower wrote: |
| for beginners this is quite confusing but once u learn what is trend, trending stocks, trading stock, ... |
Dear All
can any one provide guide for a good website / software who is providing information for support and resistance |
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newride
profiteer
Joined: 30 Sep 2009
Posts: 56
Location: Sharjah
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Posted on Sat 28 Aug 2010 13:08 by newride
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I think you can visit bftlive.com..No softwares though!
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