OCTOBER 2013
CONTENTS
Letter from the President - Page 3
Editor’s note - Page 4
Indicator In Focus: Trend Analysis Using The RSI by Andrew Cardwell – Page 5
Four Emotional Battles With the Markets by Deepak Shenoy - Page 10
Option Trading Using Charts by Abhiji Phatak- Page 13
Book Review by Sumeet Jain - Page 19
Forthcoming Events - Page 21
Past Events’ Update s - Page 22
Past Webinar Updates - Page 23
This newsletter is produced by the Association of Technical Market Analysts. All comments and editorial material do not necessarily reflect the organization's opinion nor does it constitute an endorsement by the Association of Technical Market Analysts or any of its officers, of any products or services mentioned Sources are believed to be reliable at time of publication, but not guaranteed. The Association of Technical Market Analysts and its officers, assume no responsibility for errors or omissions.
2 | ATMASPHERE
OCT 2013
LETTER FROM THE PRESIDENT
Dear Colleagues, Greetings of the Festive Season! Here is a wish for you and your family this Diwali, that you celebrate your achievements and the unique faculties each of you has been bestowed upon with, to the hilt. Algorithmic Trading, a disciplined execution of tested rules, is the next logical step to application of study of market action. ATMA has been able to assemble together an unprecedented learning programme in the tutelage of Manish Jalan, a well known Algo Trader by way of a two day workshop in Mumbai in the coming month. Given our not for profit nature, we have been able to squeeze down the participation fee for delegates to an unbelievable 0.10 X of the usual pricing of such programmes provided elsewhere, commercially. I look forward to our membership taking full advantage of such opportunities. In time, we may be able to take forward such programmes in other vibrant chapters too. Excellent readings continue to be compiled regularly by our Editor and the present issue goes a step forward further in this direction to continue to keep ATMAsphere an industry leading publication. I earnestly look forward to a thicker participation in this publication process from all stakeholders. Asia’s biggest currency trader, outside of the banking system, as per Euromoney polls for the last three years, “Thyaguji”, Head of Forex Treasury at Reliance
Industries Ltd. spoke at the recent Mumbai monthly meeting. Members and non member patrons of ATMA will likely benefit much by reviewing the video recordings of his presentation on our website, if they could not attend this meeting. The agenda for the ATMA continues to expand and I will likely never be able to over-emphasize the significance of volunteerism. Thus, I continue to solicit a wider participation from our membership in owning our various initiatives and creating a wider leadership basis. Sincerely,
Sushil Kedia
OCTOBER 2013
ATMASPHERE
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EDITOR’S NOTE
In this issue 1. Andrew Cardwell - the legend – explains the concept of Divergence and Ranges on RSI with chart illustrations. 2. Deepak Shenoy elaborately describes the four emotional battles that the traders face at marketplace. 3. Abhijit Phatak illustrates how the basic tools of technical analysis can be employed to analyse and trade options’ charts. Sumeet Jain reviews “Trade Chart Patterns like the Pros” by Suri Duddella. ATMASphere is only expanding the subscribers’ list each month. We are truly thankful to each of you for the publication’s success. We expect you
to continue writing and at the same, motivate your fellow members in the technical analysis fraternity to do the same. Please send in your contributions and feedback to
[email protected]. You can also subscribe to ATMASphere completely free by clicking here. Sincerely,
Meghana V Malkan
INDICATOR IN FOCUS: TREND ANALYSIS
identify and monitor the current trend. Of course, the length of the moving
USING THE RSI
predicated on whether it is for shorter term or longer term trading.
BY ANDREW CARDWELL
average selected, or time period assigned to the oscillator used, should be
DIVERGENCE
The ideal indicator would be one which offered the capability to identify and monitor the current trend, highlight overbought and oversold extremes within that trend, and give early warnings of a trend change. The Relative Strength Index (RSI) is such an indicator, offering the best of all worlds.
The RSI was originally developed by Wells Wider (Trend research, Hendersonville NC) in the late 1970’s. It was designed as a momentum
oscillator to help identify divergences (non-confirmations) between price movement and momentum. The basic premise was two-fold: 1.
in a downtrend,
The RSI is probably one of the most dynamic and powerful indicators available to today’s traders. One of the most widely used, it is available on almost every technical analysis software program. It is also one that is most often misunderstood, misused and underrated. The RSI can be used as either a completely independent trading model or an enhancement of your current technical approach. As a completely independent trading program it can
be
used
for
identifying:
Trend,
Support
and
Resistance,
Overbought/Oversold Levels, Divergence (Bullish/Bearish), Trend Change and Reversal, and Price Targeting.
That momentum would peak before price in an uptrend or bottom first
2.
After a correction as price made a new high (or low), momentum would fail to make a new high (or low), and not confirm the new price movements.
This non-confirmation is characteristic of most momentum based indicators and has been duly noted and accepted as divergence. Basic price/momentum divergence can and does help to identify an extreme overbought or oversold condition in the market’s momentum. However, most traders fall prey to
this concept of divergence and see it as the end or reversal of the prevailing trend of the market. When Bearish Divergence develops, the Bears come out
Most technical indicators employed by traders can, in general, be categorized as either trading or trending technical studies. Momentum oscillators are usually considered to be trading indicators, as they use market volatility to
of hibernation and want to sink their claws into what they feel will be the next Bear Market. As Bullish Divergence develops, the Bulls are ready for a reversal of trend and the start of a Bullish stampede to the upside.
identify overbought or oversold valuation levels. Moving average systems would be considered trending studies, as they smooth volatility to help OCTOBER 2013
ATMASPHERE
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All would be right with the world if markets were to reverse from simple divergence. But there are times when sentiment and momentum are so strong that the market continues to make new highs (lows), which will keep the RSI at overbought (oversold) levels for extended periods of time. Momentum and price corrections, when they do materialize, are usually sharp and swift. After these brief respites the market is then ready to resume its normal upward (downward) trend. With each successive new high (low) and divergence formed, anxious traders are ready to call for a top (bottom) and reversal of trend. However, in strongly trending markets, multiple divergences can and do develop, which only lead to corrections of the overbought (oversold) condition of the market. If a trader attempted to take positions based solely on divergences, he or she would need deep pockets and eventually exhaust his or her trading capital. IMPORTANCE OF TREND Most
traders
and
analysts
use
RSI
as
an
oscillator
to
identify
overbought/oversold levels and divergences, but those are just two of its analytical applications. The RSI’s more dynamic and significant contributions as a tool are its ability to: 1.
Identify the current trend and keep the trader positioned property in the direction of that trend; and,
2.
When market conditions develop, give early warning of a possible impending trend change, whereby the trader can reverse the position.
Since markets generally trend approximately 60-70% of the time, trend analysis, identification and change should be foremost in the mind of the
trader. The ability to recognize a trend change quickly, reverse a position,
The parameters for the RSI values are 0-100. Extremes for overbought and
and trade in the direction of that next trend is the skill which traders must
oversold levels vary slightly, depending on the period value selected by the
develop to be successful.
trader’s perspective.
Day traders or shorter-term traders will generally
employ values such 3, 5, 7, or 9 , and longer term traders usually use either 9, By having a position in tune with the trend, the trader will have the
14, or 21. The original value of the period established by Welles Wilder was
opportunity to participate in the bigger market moves which generate larger
14, which was based on being the half-cycle length of the 28 day or lunar
profits. When positioned properly with the trend there are also fewer
cycle. Using the 14 period value on close as the standard for most of the
trading decision that have to be made. Since markets trend, any surprises
markets we follow, we use the following as guidelines:
which may develop in market activity are usually in the direction of the
RANGES OF RSI:
intermediate and longer term trends.
1.
“Normal” Range: 30 – 70
2.
“Uptrend (Bull Market): 40 – 80
3.
Downtrend (Bear Market): 20 – 60
4.
Trading Range: 40 – 50 points
RSI RANGES OCTOBER 2013
ATMASPHERE
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bullish, momentum takes prices to higher levels. We adjust the range of RSI to account for these higher levels. Using the same 40 point range based on the 30 and 70 point values, Uptrends show 80 as overbought and 40 as oversold. As long as the market stays within the 80/40 range (uptrends), we should see prices make higher highs and higher lows. When sentiment is extremely bearish, momentum normally takes prices to lower levels due to liquidation and the absence of buying. Applying the same 40 point ranges for downtrends, 60 shows as overbought and 20 as oversold. As long as the range of 60/20 remains intact, we should continue to see lower lows and lower highs. Taking note that the range has shifted from 80/40 to 60/20 should be a strong indication that the trend has shifted from being in an uptrend to being in a downtrend. By employing range analysis to RSI, not only can a trader identify uptrends from downtrends, but he will also stay with the trend longer than he normally would have and hold a position for We consider the “normal” range to be the levels between 30 and 70, which is
where 60 – 70% of trading activity takes place. When a market is in a gradual uptrend (or downtrend) the RSI will normally ebb and flow within this range as the market trends higher (or lower). The levels for an overbought market can range from 70 up to 80 or 90, depending on the time period selected. For an oversold market the range may be from 30 down to 20 or 10. Taking the average of the overbought and oversold values we established 80 and 20 as better values for consideration of overbought and oversold levels. The standard 14-period RSI normally stays within a range of80 and 20 . People are bullish by nature, so when markets start to move we must adjust for this shift in sentiment and psychology. When sentiment is extremely
maximum capital appreciation.
the “3 Keys to Success,” Trading Program, Patience and Discipline. Follow
your trading program, have the patience to wait for the signal and the discipline to stay within the parameters of your program and stay within yourself.
Andrew Cardwell, president of Cardwell RSI EDGE, Inc., (www.cardwellrsiedge.com) provides consultation and commentary for his RSI course
students and his
Cardwell Private Client Group. He has taught his proprietary RSI Basic and RSI EDGE courses to individual to students in 27 countries. As a very respected and sought-after lecturer, he has presented at some of the most prestigious worldwide financial conferences. You can reach him at
[email protected]. As an exercise to further educate yourself, take the time to go back and review your trades over the last 6-12 months and apply the 80/40 and 60/20 range rules. You will probably realize that you were positioned properly in a trend, and even though you made money on the trade you offset the position much too soon. If you lost money on a trade, you were probably short in an uptrend (80/40) or long in a downtrend (60/20).
THE “3 KEYS TO SUCCESS”
If you include the guidelines which I have presented here for RSI range analysis, I believe you will find that they will help you make better trading decisions and stay in tune with the trend. As a final note, always remember OCTOBER 2013
ATMASPHERE
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Brett Steenbarger, in “Accepting the Obvious” gives an example of a victim of
FOUR EMOTIONAL BATTLES WITH THE
childhood abuse:
MARKETS
“ A victim of abuse in childhood insists that her father was caring and
minimizes the pain of her childhood, despite clear evidence that she was
By Deepak Shenoy This article was originally published in the MarketVision Chronicle at http://www.marketvision.in and is republished here with the permission of the Author.
sexually molested, physically beaten, and frequently humiliated. She insists that she must have done something wrong to upset him, and will not use the term "abuse" to describe what she went through. She undergoes periods of depression when, even now, she reaches out to him, only to be rejected”
Traders face psychological battles every day – here’s four of them that you
We tend to do this all the time, ignoring reality in the face of something more
might identify with.
attractive. Among startups recently, there is a tendency to focus on being
The Disastrous Denial
To any market player, most market moves are astounding. They surprise both in the direction and magnitude of the move. Stocks move against your careful analysis, and the first reaction that we get is one of denial. It’s easier,
for our brains, to pretend that what we need to happen, is what should happen eventually, so everything against our view seems just fleeting and temporary.
entrepreneurs and gathering brownie points from the mere status, than from the actual startup itself. I heard one of those in the startup “ecosystem” mention that we shouldn’t talk about how low past and recent exit
valuations have been, because it will discourage new entrants. The denial of the great startup non-story is simply another concept where we will ignore the facts to enhance our needs. (I’m not against great startup ecosystems; I’m concerned we are kidding ourselves if we ignore the horribly low
numbers that exits have seen) When a stock starts to fall, you hear voices of support that the markets are full of manipulators who are keeping prices low. (Note: there is much more incentive for manipulators to keep prices high, and there are far more instances of market players manipulating to the upside) Even at a broad level, we tend to blame a market fall on FIIs exiting, the crisis in Europe etc. and then, refuse to sell because the India story is still strong.
The startup market is a market with real money being made – the statement that the best is yet to come is as good as saying that India is just emerging and the best is ahead of us. In general that is true, and has been true of every great story – Europe, America, Japan and China. But even there, there were
people that denied there ever was a problem, and in the process, set
With the drop in volatility, option premiums fell, and time decay ate a
themselves up for massive failure.
substantial portion of option premium. A pure option buy based strategy
The lesson is to question ourselves. In the face of facts, to admit we were wrong, and move on. And more importantly, to focus on the next step ahead,
would have failed miserably in these years, and it was apparent that at least on the Nifty (where options are the most liquid) there were long periods of no-trades-available for someone only interested in buying options. Even for
instead of living in the past. It’s not what you did that’s as important as what
you learn from it and what you intend to do. In life you don’t often stand at crossroads – in the markets, you will do it every other day. You can’t afford the denial.
option sellers (like those who wrote straddles) premiums fell so much they would have to take many more positions to get the same absolute return, leveraging themselves hugely in the process – a recipe for eventual disaster when the index moves by a larger amount than expected. They took trades
Why trade when there is no trade
because they had to get the absolute return, and in the bargain, got absolute
Traders get addicted to the adrenaline of trading, where success is a sell
risk.
point away and adds both to profits and to self-esteem. A trader once told If there wasn’t an entry point anywhere, there is no reason to take a trade. me, during a lull in the markets, that he couldn’t sleep properly if he didn’t
have a trade on – so he’d take on a Nifty trade just for the heck of it. I get a lot of mail asking me which stocks to buy. Sometimes there are just no stocks out there to buy. Sure, there may be some stocks somewhere that
Like a friend says: I have a position. Cash is a position. Putting on too little money, or too much It’s said that one of the most successful funds at any time once had more
than 1,000 stocks in its portfolio. Maybe that works for some people, but
went MACD positive or something, but they don’t fit my qualification criteria.
At this time, there is no trade – should I dilute my criteria just because I want to trade? Should I choose stocks, when there is booming market in
honestly, having that many positions means, even if you average weight your stocks, that you will have positions worth 0.1%. Dialogues go like this:
commodities instead, only because I want to t rade stocks?
Investor: My stock went up 5x!
There are sometimes months when the markets don’t move. The number of
You: Wow. You must have made a killing!
big move weeks – when, in a period of a week, the Nifty had moved over 10% - had peaked in 2008 and 2009 (with over 19 such rolling periods each).
Investor: well, since I have 1,000 stocks, I had only 0.1% of my portfolio in it, so it’s now 0.5%, so I made 0.4%.
2010, 2011 and 2012 saw less than 10 such weeks each! OCTOBER 2013
ATMASPHERE
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You, thinking: Damn. Now I’ll have to pay for his coffee also. The point is that if you put in meaningless amounts into a stock, the results
patch; his capital had dwindled. Now, buying 1000 shares was too much exposure, but he couldn’t get himself to trade lesser than that amount.
will be meaningless. If you have a portfolio of Rs. 10 lakhs, and you buy Rs.
Revenge is for the Movies
10,000 worth of a stock, you are wasting the money – the returns do nothing
Jackie Chan often inspires the early trader. You bought a stock; it hits your
for you, and the losses will hurt emotionally (not so much financially).
stop loss. Then it reversed and went up. You bought it again. It turned back
We put in such amounts because we receive a tip from a friend, or buy into stocks because they look good, to give us the satisfaction that we got in, but with so little money in that a loss won’t look too bad. It’s an ego battle to
and hit your stop. Now you want to do the karate chop and fight back again. Revenge trading can be absolutely horrible for your pocket; I have made that mistake many times, and each time I die a little.
desire the upside (the stock went up 50%!) but to have a very small downside
You might have gone short one day, and the market opened down. The profit
at the same time.
was great but as the day progressed you saw the markets turn around and
Look even at generic asset allocation. To most people under the age of 50, a house is the biggest investment, bank deposits come second and equities a distant third. This is how they list their investments. But the house is not an investment, it’s only a place to stay, and unless you
are in deep doo-doo you won’t sell it for money (you’ll sell to buy another house, usually a bigger one so you have no cash left). The bank deposit grows at less than inflation. The only real investment you have is in equities, and that’s already a disproportionately small amount. If you change the
eat all your paper profits away, and even gave you a loss as your stop was hit. Now you eagerly await even a small sign of weakness so you can short the dirty fellow again. My strategy to deal with this is to go back to the plan. I say to myself that if I follow the plan, profits will come. There are times to question the plan, but in an emotionally distressed state (“Revenge!”) it is important to first find the
easiest way to calm down. The next trade is a different trade, tomorrow is a different day.
perspective that bank deposits and a house are not investments, allocation
Deepak Shenoy is the founder of Capital Mind(http://capitalmind.in) which
metrics will change.
focuses on in-depth analysis on markets, macroeconomic, and trading. He
Another emotional nuance is the embracing of size. A friend told me he would trade 1000 shares of a stock at a time, but had gone through a rough
lives in Bangalore and tweets as @deepakshenoy .
OPTION TRADING USING CHARTS BY ABHIJIT PHATAK Until a few years back, Options trading in India was restricted to those following the Options Greeks, which includes various parameters such as Delta, Vega, Theta, Gamma. There were (still are) Options calculators to find out the scientific value of Options. Investopedia goes further and says - Trading options without an understanding of the Greeks - the essential risk measures and profit/loss guideposts in options strategies - is synonymous to flying a plane without the ability to read instruments. You can find it here http://www.investopedia.com/university/option-greeks/ However, since the past few years, traders in India are now able to get
Over the past few years, I have made quite a few observations as regards
continuous charts of individual Options for all stocks and indices that are
interpreting these Options charts, and if done correctly, one can get good
traded in Options. This is how a typical Options chart looks like (an hourly
trades with a very low risk set-up (which is what every trader looks for). It is
chart of Nifty 5800 Sep CE).
still a highly debated topic and many are not yet ready to believe that such trades are possible. If one has the additional quality of identifying chart patterns it is very helpful in getting good trades in Options. The easiest way of trading options based on charts is by following the basics of Technical Analysis (higher tops, higher bottoms etc.) Most strategies that are used to trade based on cash or futures charts can be used for Options too (e.g. Trend lines, Moving average crossovers etc.)
OCTOBER 2013
ATMASPHERE
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I have tried to present how one can use Options charts to identify good trades. Following is an example of how Tata Steel could have been traded in Options based on a Trend line breakout in the cash / futures as well as Options charts): The August futures contract gave a breakout from a trend line above 207.5.
Rather than using a margin of Rs. 60,000-70,000 required for a futures contact, it makes sense to buy a CE here, in which one requires only Rs. 2500 per lot, and that can be the full risk for the trade. Another very commonly used strategy in Options is for hedging. Just to give th
an example – if one was long in Nifty futures on 19 September, a day before the credit policy was announced, and if the trade is to be reversed only on a trigger as per the trading system, the longs would have been carried till the th
morning of 20 September. It is very essential that a trade in futures needs At around the same time, the 230 CE gave a breakout from a trend line above 2.5.
to be hedged ahead of an important event.
Nifty futures (September):
Studying Open interest in Options: Based on the chart of the 6100 Sep CE given below, one could have gone
The data for Open interest in various Options can also be studied on charts,
short in the CE anywhere between 95 and 105, just before the policy was due
and if interpreted well, can be used to get very good trades.
to be announced. The stop loss for this hedge could have been the previous day high which was near 125. One would have lost just Rs. 20 in the CE short, but this helps in holding the long in futures till the impact of the policy on the
Following example highlights how the trend in the Open interest could have been used to get a good trade in August:
market is clear. The 6100 CE expired at 0, thus giving full profit of that Rs 100 premium which was used to go short.
Nifty was in a downtrend till a day before the August expiry and made a low th
of 5108.25 on 28 August at around 10.25 am after which it was showing Nifty 6100 Sept CE: OCTOBER 2013
signs of a recovery. ATMASPHERE
| 15
The Open interest in these kept falling all the way till expiry the next day, and the expiry was at 5409. One can imagine the profits in the CEs – 5200 from 30 to 209, or 5300 CE from 10 to 109. Nifty Aug 5200 CE:
If one was observing the Open Interest in the 5200 Aug and 5300 Aug Calls, it was quite apparent that the Open interest in these options started dropping soon after. The 5200 CE was available for less than Rs 30 (a risk of just Rs. 1500 per lot) and the 5300 CE for Rs. 10 (a risk of just Rs. 500 per lot). A drop in Open interest here means that those who had gone short in these CEs, were now covering them, which also gave an indication that Nifty is likely to recover the losses.
The chart is for the combined premium of the 5900 CE and the 5900 PE. This th
straddle gave a sell signal at around 350 on 5 September and expired on th
26 September near 16.
Nifty Aug 5300 CE:
The above was an attempt to highlight the different ways of identifying trades in Options based on extremely low risk set-ups. There are many more such trade setups that a trader can employ and use Options charts for good gains. Abhijit Phatak is a Chemical Engineer based in Pune. He has been studying Options charts for the last 7-8 years and have come up with some Another good strategy to use Options charts is to get good Straddle shorts.
interesting strategies to trade options with ‘low risk setups’. He can be
Following is an example of a September 5900 straddle plotted with a Moving
reached on
[email protected] or you can follow him @ ap_pune.
average crossover to identify trades to go short.
OCTOBER 2013
ATMASPHERE
| 17
Now, the more important point:
Most important priority: Career Development
Those amongst the ATMA membership who have a vision, a strategic string
of ATMA Members
and who would know how the inner world of HRM might be working, please
of thoughts in place, who have had their brush with changing several jobs polish your shoes and step forward your best foot! I have to build on an EMERGENCY basis a POWERFUL, INDEPENDENT &
Why are we after all part of this grand exercise called the ATMA, the Association of Technical Market Analysts?
FUNCTIONAL Career Development Committee Why can’t we host some webinars inviting Social Media Gurus who can teach
ATMA members how to promote themselves in a dignified way on Twitter, Facebook, LinkedIn, Klout, Google Plus? Why can’t we bring in some Partner of
To be excellent, to be renowned for our pedigree embellished with great knowledge and ethical conduct, to be sound in our approach at what we do in our profession, to be trusted, to be reliable, to be empowered with an all encompassing feeling of being organized together as a big team? Yes, perhaps all of this is true! Yet, all of this is aimed at one key goal and all of these goals will be fulfilled ONLY if each and every ATMA’ite is empowered with the abilities, skills and attitudes to succeed at the career each has chosen!
a global recruitment firm to teach our younger ATMA members how to write good CVs and cover letters and how to network to be on the frontline for discovering the best jobs? Go take a look at the Career Development Centre on the website of our parent organization the http://www.mta.org I need a team of strong-willed, independent minded mad men and women who have a solitary goal: beat Sushil Kedia & his early team & create an admirable Career Development Centre which is at least at par with the MTA and perhaps way more!!
Right at the inception this vision was incorporated into the design of our
Get going ATMA! Long way to go and yes the world must yield the place to us
website. A powerful JOBS-BOARD exists where not only our members can
the Technical Analysts that we deserve!
build their fully visible CVs they can also build additional CVs with anonymous values in key fields such as name of current employer etc. etc.
Does ATMA belong to you? If not, who does it belong to?!
All of us must TORTURE TEST this tool, now and as many problems or
Then within the Job-board is a feature for incorporating the profiles of your
errors or deficiencies are found must be noted and written to
companies with a nice write up and logo you can make yourself a featured
[email protected]. Have patience while you critique the
employer on this powerful tool that this mad 43 year old man could envision
deficiencies! Don’t stop at just pointing out what is lacking, but have the
even at inception when he had no ideas of how a website is built. If I can
tenacity to stretch your thinking into proposing a solution. Difference
stretch my brain and body so far, what stops you mightier younger, energetic
between criticism and leadership is that leaders identify what is missing
smarter folks to beat me blue and black?
and figure out how to fix it! Own ATMA now! Some few of us at the fight are getting bored of being its solitary owners.
BOOK REVIEW: TRADE CHART PATTERNS
small attention to detail changes the overall look and feel. All in all if you are
LIKE THE PROS
you.
Author: Suri Duddella
Believers of “Random Walk Hypothesis” say that if you change the Aspect
ISBN-10: 1604027215
looking for something based purely on price action then this is the book for
Ratio of the charts these patterns might change and the studies may become erroneous. Rather, the right approach would be to plot a chart, look out for
(ISBN-13: 978-1604027211) This book is clearly “By a Trader, for a Trader”.
patterns and try to trade. You will be overwhelmed by the magic. They just work beautifully. This book is a must have in a trader ’s library and I most certainly recommend it to the readers.
Trust me this phrase sums it all. A very crisp book which in the first few pages answers most of the questions practioners of Technical Analysis have. Why patterns? Why not indicators? What is the statistics? What is the success ratio or percentage? How do I trade using patterns? Will they suit my time frame? What will be the targets? Where will I place stops? All these questions are answered in the first 20
Mr. Sumeet Jain CMT is a Senior Manager, Institutional Research Desk, Asit C Mehta Investment Intermediates Ltd.,
Mumbai.
The author may be reached at
[email protected].
pages. And then the book starts. All the doubts which should arise after acquiring the knowledge are answered first!! The thirteen chapters sum it all up. Right from the basics like charts construction to start with, dwelling into Fibonacci, then into Harmonics, Channels, Bands, Elliott Waves and then Exotics. Event based patterns is something that is covered in the end and deserves a separate mention. All the patterns are clearly depicted on charts with proper explanation. Rules of entry, stops and exits are mentioned separately in point-wise manner. This
OCTOBER 2013
ATMASPHERE
| 19
We've have instituted a separate committee
Women in Technical Analysis
altogether
titled,
"Women
in
Technical
Analysis". If you can think of a better name that may
be
turned
easily
into
a
good
&
RESPECTABLE acronym using the first letters of A Necessary Initiative:
each word, please do suggest. Are markets a man’s world? Is Technical Analysis a man’s domain? Answer is clearly no,
ATMA will fund an extra monthly meeting on any good educational topic
since markets as the final masters are the
EACH Month for AT LEAST the next 12 months under the Women in Technical
ultimate level playing field. Yet, for various
Analysis series where the speaker, the delegates and the volunteers will all be
legacy reasons markets have continued to be
women. A well appointed 80 seater conference hall with all modern business
dominated by men, so far.
amenities in perhaps one of the most secure & safe buildings of Mumbai –
Increasingly a larger and larger percentage of women are excelling at markets
right at a well known Commodity Exchange is being worked out as a
and we do know many good Technicians such as Connie Brown, Louise
permanent venue!
Yamada, Katie Stockton to just name a few have made their mark on the globe! It’s time for India to discover its own Ms. Browne, Ms. Yamada & Ms.
Stockton! The goal clearly is also to include any number of women Technical Analysts
This would make Mumbai the only city in the world of Technical Analysis where there would now regularly be TWO monthly meetings; it would also be a first of its kind anywhere in the world, Educational Monthly Meetings only for women!
you know and who are not yet ATMA members, to bring to the main-stream.
So here is a special committee to be comprised
Speak to them, let them know the exceptional work ATMA has been
ONLY of women, FOR the women and BY the
producing and get them to become members so that there are at least a 100
Women at the ATMA. Your mandate as a
women members of ATMA in the very near future to take your representation
Committee is way larger: To represent, ascertain,
to at least 20% and hopefully as numbers grow the spiral effect will someday
decipher and then achieve the goals for Women in
take you closer to 35% or even more than 50%! Of the 500+ members of ATMA active at this point, only 24 are women. That's an abysmal number. The truth is a far bigger percentage of women are technical analysts than the percentage women members in ATMA! Why? I don’t have any good answer, but would guess that networking, professional link building and such other extracurricular activities haven’t been easier for
Technical Analysis. "I am surprised & IMPRESSED that you have
Soliciting Women
critical mass to hold a women-only meeting! It’s
Volunteers:
a wonderful thing if you can pull it off. I’d love While a formal new fully
to speak to the group someday" -
women.
Katie Stockton , Vice President, MTA
empowered Committee is being built as “Women
Oh the Women Technical Analysts of India, write Here is a special initiative for You - the women Technical Analysts of India,
to
way more organized, crisper and resourceful than what has been done so far
[email protected]
for the general membership, at large.
volunteering on
[email protected]!
us
for
membership
in
Technical
Analysis”
enquiries
on:
you are welcome to join
and
for
all too!
other
Committees
FORTHCOMING EVENTS CERTIFIED ALGORITHMIC TRADER PROGRAM {ATMA – CAT} Date – 7th and 8th December, 2013 (from 9.30 am to 5.30 pm) Venue - PVM Gymkhana & Gymnasium, Maharashi Karve Road, Churchgate, Mumbai - 400021,Maharashtra Speaker - Mr. Manish Jalan, a B Tech and M Tech in Mechanical Engineering from IIT, Bombay, he is the Managing Director and Co-Founder of Samssara Capital Technologies LLP. He has over 9 years of expertise in the areas of profitable systematic quantitative trading strategy development. Manish is a seasoned speaker in the areas of algo trading and quant trading with investors and traders globally. He is also a consultant with Dun and Bradstreet, The NSE, Bank of America, ATMA and KPOs like SGAnalytics on building models for hedge funds globally. Topics to be Covered on Day 1 -
Topics to be Covered on Day 2 -
1. Introduction to Algorithmic Trading (AT)
1. Jargons used in AT
2. Mathematical Elements of AT
2. Business Aspects of AT
3. Lifecycle in Development of AT
3. Global Trends in AT
4. Introduction to Risks in AT
4. Where India stands in AT
Registration Fees: Non-Members - Rs. 15,000/- for two days (inclusive taxes) Members - 50% Discount - the amount would be Rs. 7,500 for 2 days. Directors / Owners of Member Firms of BSE - 33 % Discount - the amount would be Rs.10,050 for 2 da s.
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PAST EVENTS’ UPDATES CHAPTER
DATE
SPEAKER
TOPIC
Indore
14/09/2013
Vivek Gupta
Rationality to Irrationality
CHAPTER
DATE
SPEAKER
Bengaluru
29/09/2013
Vishwanath Gangavati
TOPIC Pivot point Trading using Technical Analysis
Kolkata
21/09/2013
Kaushik Sen
Following Market Trends with the Help of Options Kolkata
19/10/2013
Manish Pareek
Integrating Macroeconomic
Mumbai
28/09/2013
Rajeev Darji
Principles with
Insight on Chart
Technical Analysis
Pattern Analysis
Delhi
28/09/2013
Mukul Pal
Ahmedabad
20/10/2013
Mukul Pal
New Delhi
26/10/2013
Ajay Aggarwal
The New Passive
The Active Money Management System High leverage, Low Risk , High
return and Low Stress
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PAST EVENTS’ UPDATES (CONTD…) CHAPTER Mumbai
Bengaluru
DATE 26/10/2013
27/10/2013
PAST WEBINAR UPDATES
SPEAKER
TOPIC
DATE
SPEAKER
TOPIC
Venkat
USD/INR -
21/09/2013
Vikrant Goyal
Trading using Japanese Candlesticks
Thiagarajan
Outlook
Dr. Musa R Kaiser
Technical Analysis
28/09/2013
Subhadip Nandy
Using Bollinger Bands to Day trade
05/10/2013
Siddhali Desai
Training for CMT Examinations –
OF Fundamental Analysis of Nifty
Levels I, II and III.
13/10/2013
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Benefits of Membership with the ATMA
Apply for your ATMA Membership Today!
OCTOBER 2013
ATMASPHERE
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