Trend reversal identification is childs play now.
No calculation of averages, no formulae...is required for that.
It works with 85% accuracy. Damn simple....
One can trade with this method with a horizon of one week to 10 days.
Any common man ( not the techies ) like me is interested ?
This is a simple method i use. This is not a software or any method copied from any place. This is my own method i follow.
I really dont know if anybody else is also using this method already.
ok...guys..... method is nothing great to boast about as i said in the begining.. But i found this is extremely easy to handle.
One can do a positional trading with a horizon of one week or so with this method. This is not for intraday trading.
You have to note down the current day closing price. ( it can be any stock or nifty also)
Compare the price with 5 day prior close price.
If the current day closing price is greater than 5 day prior closing price, then BUY next day.
If the current day closing price is less than 5 day prior closing price, then SELL next day.
if it is BUY, then one can buy at a price near to previous days closing price or low price.
if it is SELL, then one can sell at a price near to previous day closing price or high price.
No calculations or formulae required. only visual inspection.
Date Closing price
here in this example, as on 31/1/12, the closing price was 449.55. 5 day prior closing price is 463.45.
So, the current price is less than the 5 day prior closing price. Therefore it is SELL as per this method.
Dont follow any method blindly. Kindly do your own homework first.
Happy trading ..!!
Instead of 5 days prior closing price, one can compare with 6 days prior price also.
If it is a BUY, then one can keep a STOP LOSS of yesterdays low or just below yesterdays low.
Similarly, if it is SELL, one can keep STOP LOSS of yesterdays high or just above yesterdays high.
Or else, a stop loss of your convenience can always be put.
For stocks, any stop loss 2.25 to 2.7% is good enough.
The link to the modified method is in excel file here
In this file, i have analysed one year data of YESBANK with this method.
One has to just enter OPEN HIGH LOW CLOSE value of any stock copy the formula from the above rows. It will give next days trage suggestion and trade price with stop loss and target.
The links for xls version of the file is as below
[URL=http://www.4shared.com/office/LKjSJN1N/6day_trend_analysis_-_xls_old_.html]6day trend analysis - xls old version.xls[/URL]
try anyone of these. you should get the file.