Book Reviews
Book Review of 'Trend Trading set-ups'
High probability trades based on price and volume trends
 
There are many ways to trade in the markets. The most popular one is trend-following. Prices in all markets—commodities, currencies and stocks —tend to trend, from a few days to a few weeks. Trend-followers try to identify a rising or a falling trend and ride it. This sounds simple. Indeed, the chart of any traded financial instrument will show trends. However, what you see in the chart is the past. Trends can end abruptly. Sometimes, they end and then resume immediately. It is very difficult to get into and out of trends because at the time you take a position in the direction of a trend, you do not know the duration the trend will last. 
 
Trends are followed by experts and novice traders alike. The greenhorn trader uses it because it’s easy. The expert trader uses it because, after many years, realisation dawns that it is futile to try to anticipate anything in the market. It’s prudent to just trade in the direction of the established trend. Traders, like Ed Seykota, Richard Dennis and Paul Tudor Jones, have made millions by following trends. But this requires a lot of study, deep belief, patience and discipline. Few have it.
 
There are many books on trend-following (many of which have been reviewed in Moneylife). But LA Little, a trader and a columnist with websites like marketwatch.com and street.com, has a different approach. He wants to zero in on high probability set-ups under any market condition based on past data of only price and volume. 
 
The book is divided into seven chapters. The first three in Part 1 give you the fundamental concepts of Little’s system. Chapter one discusses how to identify trends and how long they can last. What kind of expectancy can one have of trends, especially since many trends would fail? Little shares a lot of interesting details. For instance,  intermediate bullish trends can last 25 bars. 
 
The next chapter describes key trading concepts of anchor bars and zones that define where prices can turn. Chapter three explains the influence of broader market trends on individual stocks; after all, most stocks tend to move in the direction of the general market and the specific sector. This helps in deciding the trend of a stock within the overall trend of the sector it belongs to. These three chapters are drawn from Little’s previous work Trend Qualification and Trading which I had reviewed in Moneylife (Issue 22 September 2011). 
 
Part 2 starts with formulating a workable trading plan, which includes determining trend direction and strength, the time frame to trade in (intraday, daily or weekly), timing entry and exit and also trading size, scaling in and out of trades and estimating the risk-reward ratio. Chapter 5 discusses trade set-ups. Little argues that there are really two types of trade set-ups: breakout and retraces. This is not an original idea, in price analysis. All momentum-based traders look for breakouts. And all those who look for reversions, wait for retraces. But Little’s view is radical. He believes that all other set-ups, all the countless variations, patterns and indicators, are extensions of these two basic trade types, basically. Chapter 6 discusses trading in sideways market while the last chapter explains trading of breakouts and retrace. 
 
This book is important because Little uses only price, volume and time to create trading signals supported by his analysis of past data. The focus is on staying close to measuring demand and supply—the two factors that are the main determinants of price. Simplicity is the basis of Little’s approach. He frees the trader of numerous rules, patterns and the many variations which  fill up popular books on technical analysis, leaving them confused. The book is a worthy addition to the serious literature on studying price patterns.

User

Nifty, Sensex, Bank Nifty show first signs of reversal – Wednesday closing report

A close below 8,890 in Nifty and below 19,600 in Bank Nifty will confirm the downtrend

 

The market was supercharged on Wednesday before trading started on the news of unanticipated rate cut by Reserve Bank of India (RBI). The indices opened sharply higher at their lifetime highs and moved higher. However, selling started immediately. The indices moved gradually lower. After around 2.20pm, the benchmarks made a sharp plunge into the red zone. They hit the day’s low and closed near to it, thus abruptly breaking the trend of past four days of upmove.
 
S&P BSE Sensex opened at 29,937 while NSE’s CNX Nifty opened at 9,109. Sensex hit its high at 30,025 while Nifty hit the high of 9,119. Sensex moved lower to the level of 29,289 and closed at 29,381 (down 213 points or 0.72%). Nifty hit a low of 8,894 and closed at 8,923 (down 74 points or 0.82%). Nifty managed closed just 12 points above the support of 8,910 we mentioned in Tuesday’s closing report. Bank Nifty opened at 20,542, which was the day’s high it moved to the low of 19,555 and closed at 19,644 (down 317 points or 1.59%). NSE recorded huge volume of 125.91 crore shares. India VIX fell 1.90% to close at 15.1975.
 
The Reserve Bank, in a surprise move, reduced repo rate under the liquidity adjustment facility by 25 basis points to 7.5% from 7.75% with immediate effect. Cash reserve ratio (CRR) of scheduled banks remained unchanged at 4% of net demand and time liabilities.
 
The RBI said that the need to act outside the policy review cycle is prompted by two factors. First, while the next bi-monthly policy statement will be issued on 7 April 2015 the still weak state of certain sectors of the economy, as well as the global trend towards easing, suggests that any policy action should be anticipatory once sufficient data support the policy stance, the central bank said. Second, with the release of the agreement on the monetary policy framework, it is appropriate for the Reserve Bank to offer guidance on how it will implement the mandate, the central bank said.
 
The HSBC Services Purchasing Managers' Index (PMI) rose to 53.9 in February from 52.4, its highest since June 2014. Strong new business growth was the primary factor cited by survey respondents for the increase in activity.
 
Telecom companies are likely to commit $13 billion or over Rs80,000 crore in the ongoing spectrum auction with Idea Cellular being the "most exposed" in the race as a bulk of its licences are getting expired soon, global ratings agency Fitch has said.
 
Coming back to stock markets, Alstom T&D (9.06%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today.
 
Bhushan Steel (8.00%) was the top loser in ‘A’ group on the BSE. STCI Finance has invoked 176,000 shares in Bhushan Steel that were pledged by Bhushan Infrastructure to overcome losses from the fall in stock prices in the last one week.
 
Sun Pharma (6.62%) was the top gainer in the Sensex 30 pack. It hit its 52-week high today. Sun Pharma entered into an agreement whereby it will acquire GSK’s opiates business in Australia. Currently, GSK opiates business, including related manufacturing sites in Latrobe (in the State of Tasmania) and Port Fairy (in the State of Victoria) and its portfolio of opiates products along with inventory, will be transferred to a subsidiary of
Sun Pharma. GSK’s product portfolio consists of poppy-derived opiate raw materials, used primarily in the making of analgesics to treat moderate to severe pain. Sesa Sterlite (4.11%) was the top loser in the Sensex 30 stock.
 
On Tuesday, US indices closed in the red.
 
Except for Shanghai Composite (0.51%), KLSE Composite (0.24%) and Taiwan Weighted (0.17%) all the other Asian indices closed in the red. SET Composite index of Thailand was the top loser. 
 
China's monthly HSBC purchasing managers' index for the services sector was 52, a slight increase from the six-month low of 51.8 in January. 
 
Japan's Markit's monthly index of the services sector fell from 51.3 in January to 48.5, the lowest reading since April. Australia's GDP grew at an annual pace of 2.5%, matching estimates, data showed today.
 
European indices were trading in the red. US Futures too were trading lower. Monthly monetary policy review from the European Central Bank is scheduled tomorrow.
 

User

The Nirbhaya Documentary - as always, follow the money
Why would somebody spend crores on making a movie defiling the memory of a dead person, to make her killers and rapists look like studs and stars?
 
First, take a look at this clip, of animals being slaughtered for food in India.
 
 
It is likely that the unfortunate girl who died in the attack by the rapists was treated even worse than these animals have been treated.
 
Over the last few days, I have been amongst the most vociferous on social media, objecting to the public airing in India of the Nirbhaya documentary made by my ex-colleague from NDTV, Dibang, and his co-Producer, Leslee Udwin from the UK. Why am I, otherwise an absolute votary of free speech, against this documentary?
 
1) The little I have seen, and the feedback I have got from those who have seen it, leads me to believe that the rapist has been depicted as a braggart out to leave his message to the other hoodlums on the street. One reason for this is that death by hanging in popular Indian movies, lore tends to glorify it as a means of expression against political and colonial repression, and that needs to be corrected. 
 
2) There appears to be no available record as of now of adherence to Indian laws by the two producers. Permissions for social research have been misused into making a commercial documentary. There are also reports of inducements in cash paid out to various people who have appeared in the documentary.
 
3) There is no data available on status of compliance to Indian laws including service tax laws for hiring of vehicles, hotel rooms, equipment, staff and similar expenses, which have run into crores of rupees over a period of two years. At least two press conferences held at the Royal Plaza Hotel in Delhi in the last few days were reported to have been paid for totally in cash.
 
4) The British producer, Leslee Udwin, has openly said that she is totally against capital punishment. The justice delivery system of India, however, has pronounced a death sentence, which is still up on appeal in higher Courts. This documentary then appears to be a clear case of trying to interfere in the delivery of justice in India.
 
5) Dibang, the other producer, has himself had a colourful tenure at New Delhi Television. There may or may not be written complaints of sexual harassment against him, as hinted at by a blog, which has been up for years now, but there is no smoke without fire either. I have worked at NDTV, years ago, and still have friends there and from there.
 
6) And finally, the police have filed a case about outraging the modesty of women, basis their inputs on the said documentary. That says it all.
 
Why would somebody spend crores on making a movie defiling the memory of a dead person, to make her killers and rapists look like studs and stars, is the question I hope to answer in a few days as more details of the money trail come in. For now, fact remains, large amounts have reportedly been spent in cash.
 
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.)
 

User

COMMENTS

Raghuram

2 years ago

The man is the cruelest animal in the world.

Raghuram Shetty,Engineer Hebri-Udupi

S K Gupta

2 years ago

Cow Slaughter is a Great Sin! Participate As Much As Possible and Dig Your Graves - "Educated Butcher" finally you will get consumed by your gluttony.

Mahesh S Bhatt

2 years ago

Its sad & bad a brave daughter's sad story of our Country is traded after being abused by society.

The fact is that last 4 days BBC/CNN have not reported & they aired the documentary to deflect attention from Libya Oil filed attacks,as below.

As always BBC wants India/Africa to be potrayed as backward.



Al Jazeera
" Esam Mohamed, The Associated Press
Published Thursday, March 5, 2015 8:24AM EST
Last Updated Thursday, March 5, 2015 1:29PM EST
TRIPOLI, Libya -- Libya's state-run oil corporation has declared 11 oil fields in the country non-operational after attacks by suspected Islamic State militants, opting for a force majeure clause that exempts the state from contractual obligations.
The National Oil Corporation blamed authorities in the Libyan-capital of Tripoli, set up by Islamist-backed militias, for failing to protect the oil fields. The statement, issued Wednesday night, says that "theft, looting, sabotage and destruction" of the oil fields have been on the rise despite pleas for the authorities to ensure safety of Libya's oil installations.

Mahesh

REPLY

Ankur Bhatnagar

In Reply to Mahesh S Bhatt 2 years ago

> As always BBC wants India/Africa to be potrayed as backward

Well, India and Africa are indeed backward. And it's not BBC's fault, but our fault.

MOHAN

In Reply to Ankur Bhatnagar 2 years ago

Ankur,

India is a country and Africa is a continent !!

India never conquered other countries and looted others wealth.

Ankur Bhatnagar

In Reply to MOHAN 2 years ago

Conquering other countries? It would have been good enough if we could have at least defended ourselves from getting conquered. We were so ridiculously weak. Anyway, past is past. The problem is that we continue to be as weak even in the recent past of 40 years and going forward...

Instead of complaining about BBC and others, let's focus on building our strengths and development.

TIHARwale

2 years ago

Veeresh Malik your reasons is totally misdirected. Ascribing motive to a film maker will not make India a better place to live. Maliks comment about Dibang, "the other producer, has himself had a colourful tenure at New Delhi Television. There may or may not be written complaints of sexual harassment against him, as hinted at by a blog, which has been up for years now, but there is no smoke without fire either. I have worked at NDTV, years ago, and still have friends there and from there" shows the corrupt mindset of Veeresh Malik as he simply indulges in gossip. Unable to comprehend how Moneylife staked it reputation in publishing this article.

REPLY

Veeresh Malik

In Reply to TIHARwale 2 years ago

Dear TIHARwale, today's reports on the money trail by co-producer Anjali Bhushan and on Dibang's involvement are self-explanatory.

sharada ramanathan

2 years ago

I look forward to more from you on this. the "gift" to india, and to be used for global celeb campaign, used these very sound bytes as their global marketing pitch.

cdwmopmp

2 years ago


According to: http://www.dr.dk/Salg/DRsales/Programmes...

It was produced by "Produced by: Assassin Films for BBC in ass. with DR, SVT, IKON, SFR, RTS, CBC"

So money came from western powers.

I have a feeling that it is Danish Govt project as Leslee Udwin got money from DR.

This is because these two who work for DR in international sales have handled the distribution of the film
:
Kim Christiansen [email protected]
Helene Aurø [email protected]
src:

http://www.idfa.nl/industry/tags/project...

https://archive.today/lRqLkwho

1) Danmarks Radio
Danish Broadcasting Corporation http://en.wikipedia.org/wiki/DR_(broadca...
http://www.dr.dk/Salg/DRsales/Programmes...

2) BBC

3) Sveriges Television AB
Swedish Public TV broadcaster http://en.wikipedia.org/wiki/Sveriges_Te...
http://www.svt.se
http://www.svt.se/svttext/tv/pages/188.h...

4) ikon Films http://ikonfilm.com.au/ikonfilm/ikonwp/

5) SFR (french telecom company http://en.wikipedia.org/wiki/SFR)
http://m.sfr.fr/home/u/news/s/monde/a/ur...

6) Radio Télévision Suisse (RTS)
Again, Swiss Public Broadcaster

7) CBC cbc.ca
http://www.cbc.ca/passionateeye/episodes...
http://www.cbc.ca/passionateeye/m/episod...

Narendra Doshi

2 years ago

Dear Veereshji & MDT,
Timely details given.
Horrifying Video (Never seen such) since I am a Jain , More than a Vegetarian.
Look forward to your next part on this.

Chandragupta Acharya

2 years ago

Strange that you write this without even watching the documentary. Please watch it - it neither defiles the girl nor glorifies the rapist. Issues like service tax are totally irrelevant to the current debate - the government can very much proceed against them as per laws.

REPLY

Veeresh Malik

In Reply to Chandragupta Acharya 2 years ago

I have seen the documentary as well as know some of the people behind it. That does not mean I agree with it. I also know what showing responses without showing the questions means.

sivaraman anant narayan

In Reply to Chandragupta Acharya 2 years ago

I agree its a balanced film and everyone must see it to introspect about the value system in our society.

Ankur Bhatnagar

2 years ago

If these are your reasons for opposing the broadcast of the documentary, then I conclude there are actually no reasons to stop its airing. Come on, just read those woozy points again!

sivaraman anant narayan

2 years ago

After just a few seconds into the attached clip at a slaughter house, I cried out in anguish and couldn't continue. What barbarity!!

raj pradhan

2 years ago

Very good information about the insensitive documentary (only at Moneylife). Look forward to more details of the money trail. Good job Mr Veeresh!

raj pradhan

2 years ago

Very good information about the insensitive documentary (only at Moneylife). Look forward to more details of the money trail. Good job Mr Veeresh!

Hemant

2 years ago

Its really sad ,but true.These people can stoop to any low level one can't even imagine ,under the pretext of free speech.Our English media ,as usual takes up the case on their behalf.Sick mentality.

Suketu Shah

2 years ago

the timing is perfectly staged to disrupt Mr Modi from passing critical bills in Parliament.Garner anti-govt publicity and ensure the media laps it up and waste time so Mr Modi cannot pass any critical bills.

This is exactly why people have voted for BJP as this is all that other parties are capable of-stopping Mr Modi and his team from taking the nation forward.

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