Introduction

“If past history was all there was to the game, the richest people would be librarians”

-          Warren Buffett

When attempting to solve a problem, the most difficult task is to know where to start. In this specific case, the problem is how to find persuasive answer to the above quote, a quote from none other that the “Oracle of Omaha”, as the world’s most successful investor is often called.

I became a technical trader and I wanted to use price charts alone to determine me buy and sell signals. I realised this technical approach to analysing the markets could level the playing field between “professional in-siders” in the markets and individual traders like me. I recognised this when I realised that I was not smart enough to gather all the news and assess its impact correctly in order to arrive at the market’s behaviour. The obvious problem is that it is difficult to determine whether a news item is bad or good for the market, or, even worse, it could simply be rumour as well. And it is even more difficult to interpret the same news. It is important to remember that it’s not necessarily the news itself that is important; how the market reacts to the news is more important than the news. Therefore, instead of going through lots of news sources I started looking at price charts of the markets to understand how other market participants were interpreting the latest news and information.

It is interesting to see when a market makes an unexpected large move for no obvious reason, only to be confirmed by some news release at later time.

Jesse Lauriston Livermore, also known as the Boy Plunger, was an early 20^th century stock trader. He was famed for making and losing several multi-million dollar fortunes and short selling during the stock market crashes in 1907 and 1929, once wrote:

Remember there is always a reason for a stock acting that way it dose. But also remember the chances are you will not become acquainted with the reason until some time in the future, when it is too late to act on it profitably.

Confused, right? Markets discount all the fundamental news there is and also how market participants interpret it.
The fundamental news involves corporate earnings, profits, book value, and price per share earnings and so on. The technical approach analyses past market movements and projects future actions.

“Price leads to fundamentals”

The above statement will probably surprise, or even upset, many investors. But it has been observed time and again that markets seem to top just when the fundamental news is the most bullish-and bottom out when the news reports are the most bearish. The price, thus, discounts the fundamental news in advance. Successful traders are already looking into the future, while novice traders are still trying to trade off past news. I am not saying that fundamentals do not influence market prices but prices usually anticipate and adjust to changes in fundamentals well before these become common news. As the legendary Jesse Livermore wrote in his book How to Trade Stocks:

All through time, people have basically acted and reached the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis.

As a result of two human emotions that are as old as humanity, greed and fear, traders have a tendency to over-react to market behaviour. When things are going well, traders succumb to greed and over-buy in an effort to maximize profits. When the market is not going their way, fear kicks in, followed by a flurry of selling. These two opposing emotions have been around since the market began and will always continue to be a key factor in the movement of prices.

What you will learn from this site

                   "I believe the future is only the past again, entered through another gate"
                                                                                                  - Sir Arthur Wing Pinero

All said and done, market analysis is not some complex rocket science; all that is needed to make sense of the evolving price data is fairly simple knowledge and some experience.This site is about price patterns and the overall behaviour of the market. some of the patterns aid you in understanding the market behaviour and will enable you to see the current market action and assess, with a high degree of reliability, what is likely to happen next.
This site is not meant to be a road-to-riches site or a no-risk type of site. You should be ready to put in serious effort, requiring both study and concentration. As you read through the site and study the explanations, you will quickly realize the tremendous value of the information it contains.
There is an old adage which says that knowledge can be communicated but wisdom has to be self-taught. Hopefully, by the end of this site, you will have enough knowledge to evolve your own market wisdom for the next several years.
I have tried to write these blogs in a simple language along with some of the references wherever required. I did not want the readers to be overwhelmed by off-putting market jargon. I hope the reader will pardon me if at any place in this site I have veered away from that intent.

Happy Trading :)

Are you mentally prepare before Trading

Great personalities like Thomas Edison, Graham Bell and Henry Ford had one thing in common - PERSISTENCE. They thought of an idea and stick to it.
Probably, you might be thinking that "I am here to get some inside tips on trading and he is talking about people who were nowhere near it."
Basically, we are talking about people who enter into the market to trade and earn profits. however, they lose all their money and never return fearing to lose their money again. If you search deep down to it then you will find that most of them are seasonal or one time trader who come up with a mind set of doubling their money thinking of stock market as Gamble.
Before we enter into share market one thing we should be very clear with, is never ever enter in to stock market with an idea of Gambling instead, always bear in mind of it as an Investment.
Gambling fully depends on luck whereas an investment is a combined effort of Time, Patience and Persistence.
By now you would have had some idea why we did start the chapter with the quote persistence. Be it a share trading or any other walks of life persistence is an essential factor in the procedure of transmuting desire into its monetary equivalent. The majority of people throw their aims and purpose and give up at the first sign of opposition. A few carry on despite all opposition.
Fortune gravitate to men whose minds have been prepared to attract them, just as surely as water gravitates to the ocean.
If above paragraphs are loud and clear to you and you truly admire these qualities then not only the stock market but you will be accomplishing even bigger goals in your life which at one point of time you might have thought of close to impossible.
 The starting point of all achievement is desire. Keep this constantly in mind. Weak desires bring weak results,just as a small amount of fire makes a small amount of heat. If you find yourself lacking in will power,this weakness may be remedied by building a stronger fire under your desires.
 I still remember my ups and downs when I first started trading, one day I thought stock trading is so easy that I can make money anytime i want and the other day i was promising myself never to return back as it appeared to me as gamble.Moreover, when i first started trading i started with the large sum thinking to make more profits but when it came to losses, I used to lose heavy amount.
As the time passed by I not only learned the true lessons of stock market which I thought of sharing with the world through these posts but I also developed an excel checklists for intra day trading which has accuracy of approx 90% and which helps me make a handsome amount in my intra day trading on a daily basis.
I can share the checklist with all those who are struggling to make money through trading and looking out for an appropriate solution.