Trading TECHNICALLY

Many times I discussed/argued with my friends about the Technical Vs Fundamental Analysis. Even while giving SIP presentation I said this year is best year for Technical Traders or in other words Technical Analysis is going dominate the Fundamental Analysis due to volatility in the market. To prove that TECHNICALLY, I have one audio/video clippings for you all my friends.

Today my friend Mr. Kiran Munikoti (Ranga!!) sent me a link about the Trading Technically Vs Fundamentally. In that speaker has beautifully explained how to trade profitably even in this of volatile market also. And he has shown how fundamental trading fails as compared to Technical trading in SHORT TERM.

In that clipping speaker has used Triangles for trend identification & and the timing of the market. Even he talked about the non participation in the market in the sideways which is very risky from which both the possibility of breaking above/below are possible. While watching & listening to that clipping please you have take care of the followings…

 Trend is your friend. Take positions according to trend.
 Timing of the market. I mean entering & exiting points should be followed strictly according charts.
 Non participation in the sideways.
 Picking @ bottom.

For your reference I am providing some more information on the triangles. The below information is some what old, just have look at the methodology.

Triangles

Triangles are some of the most well-known chart patterns used in technical analysis. The three types of triangles, which vary in construct and implication, are the symmetrical triangle, ascending and descending triangle. These chart patterns are considered to last anywhere from a couple of weeks to several months.



The symmetrical triangle in the Figure is a pattern in which two trend lines converge toward each other. This pattern is neutral in that a breakout to the upside or downside is a confirmation of a trend in that direction. In an ascending triangle, the upper trend line is flat, while the bottom trend line is upward sloping. This is generally thought of as a bullish pattern in which chartists look for an upside breakout. In a descending triangle, the lower trend line is flat and the upper trend line is descending. This is generally seen as a bearish pattern where chartists look for a downside breakout.



As shown in the Ascending Triangle chart the stock has the resistance at 1000 levels. But immediately after forming Ascending triangle the scrip rallied 1000 to1150 levels as traders shown interest in long position.



Now in Descending Triangle chart the stock has the resistance at 2000 levels. But after forming Descending triangle the stock breaches that support and plunged from 2000 levels 1600 levels as traders enter into short position.



Now Symmetric Triangle formed by sharp movement of price in sideways. After this, stock rallied from 980 levels to 1150 levels by indicating trend reversal.