Book Reviews
Visual Patterns Meet Computerised Tests
This book is the third and last in the ‘Evolution of a Trader’ series by Thomas Bulkowski. I had reviewed the first two (Trading Basics and Fundamental Analysis and Position Trading) in August-September 2013. The third book is all about swing trading and day trading. Bulkowski is quite a fascinating character. He got a degree in computer engineering when computers were in their infancy. His first job was as a hardware design engineer at Raytheon. But his heart was in the stock market. Every day, he arrived early to office and charted his favourite stocks on graph papers. As an engineer, he focused on the ‘right way’ to analyse stocks—using ‘strict fundamentals analyses’. His office-mate, Bob Kelly, however, followed a different method. He closed his eyes, twirled his hand around, and plunged it into the Wall Street Journal to make his choices. Bulkowski tracked his selections, and Bob’s random picks. After six months, he discovered two things: one, Bob was beating him; and, two, he did not have a clue on what he was doing. Bulkowski continued to study company earnings and valuations, using price-to earnings (P/E) and price-to-sales ratios as his main filters. He poured through Forbes and Fortune in the libraries and learned to love fundamental analysis.
 

However, while Bulkowski was profitable, he still did not have an answer to the huge swings that stocks suffer from periodically. His stocks would double or triple and then drop by half. He retired at 36 and started trading stocks full-time, writing articles and then writing books. Over the years, he evolved from just a buy-and-hold investor to a trader. While he has a core holding in stocks that are likely to do well over the long term, he now buys and sells stocks for the medium term, to short term, to a day. His tools are price patterns, or technical analysis, which is seen as mumbo-jumbo by many investors. However, this does not mean he follows indicators like ‘Relative Strength Index’ or ‘Stochastics’ or moving averages. He uses patterns like rectangle bottoms, flags, triangles, pennants and so on. What makes Bulkowski’s approach distinctive is that he has used his programing skills to test dozens of patterns in technical analysis over sample sizes running into hundreds and has come with what you can expect from the different patterns.
 
This book, Swing and Day Trading, is divided into 14 chapters, seven each for Swing Trading and Day Trading. In the Swing Trading part, Bulkowski introduces basic swing trade tools such as support and resistance, trend-lines and channels. He then come straight to the point. Chapter 3 lays its bare: which chart patterns work best for swingers? Bulkowski has analysed 32 chart patterns and ranked them according to two-month performance. The book displays the top 20 patterns that offer meaningful profits. The best performer was high and tight flag, a momentum play: buy high, sell higher. 
 
 
Bulkowski also explains how to trade the top seven frequently traded chart patterns, such as symmetrical triangles, ascending triangles, head and shoulders bottom, support or congestion and flag bottoms, flat base bottoms and rounding bottoms. If you are interested in trading price patterns, this book comes closest to as scientific a study as you could get. The only issue that still remains is to define the patterns in live situations because there is still some subjectivity in locating the patterns.

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Reliance Jio launch in 'coming months': Ambani
Assuring shareholders that significant progress had been made in erecting the infrastructure for Reliance Jio, along with some 1.5 million test users, Chairman Mukesh Ambani has, without specifying a date, said the commercial launch will happen in the "coming months".
 
"During the year, Reliance Jio moved towards completion of its network infrastructure as well as business services and platforms. We on-boarded over 1.5 million test users, who have been using the services extensively," Ambani said in the company's annual report for 2015-16. 
 
"This has enabled testing of the network, user applications and services and business platforms. The feedback from test users is extremely encouraging. The test programme will be progressively upgraded into commercial operations in the coming months."
 
Shareholders were also told that Jio is now present in all the 29 states of India with a direct physical presence in more than 18,000 urban and rural towns and over 150,000 villages. 
 
The chairman said Reliance Industries invested over Rs 112,000 crore ($17 billion) in its various businesses operations during 2015-16, which he claimed was the highest-ever by any corporate in India in creating growth engines for the future. 
 
"As we near the end of our largest capital expenditure cycle, we are focused on ensuring a smooth start-up and stabilisation of new growth platforms across hydrocarbon and consumer businesses," he said, adding the record profit of $4.2 billion against a gloomy environment was laudable.
 
He particularly mentioned that the company's gross refining margins -- the difference between the crude oil price and the value of petroleum products coming out of a refinery -- stood at $10.8 pr barrel in 2015-16, was the highest in seven years and outperformed the Singapore benchmark.
 
The company said the annual shareholders' meeting will be held here on Sep 1 at 11 a.m. at Birla Matushri Sabhagar auditorium.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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RBI launches 'Sachet' portal to check illegal money collection
The Reserve Bank of India (RBI) on Thursday launched a portal to curb illegal collection of money by companies.
 
This website will enable public to obtain information regarding entities who accept deposits, lodge complaints and also share information regarding illegal acceptance of deposits, said RBI Governor Raghuram Rajan while launching 'Sachet' here. 
 
“Initiating quick follow up and taking cases to logical conclusion by punishing the guilty is paramount to deterring entities in future from carrying out unlawful activity. I hope 'Sachet' would help regulators in doing this as much as it would help members of public in depositing their hard earned money with genuine companies by giving them timely information about them,” Rajan said.
 
The website would also help enhance coordination among regulators and state government agencies.
 
Explaining the features of the website, Deputy Governor S.S. Mundra said, people can file and track a complaint on this website if any firm has illegally accepted money from them or defaulted in repayment of deposits. 
 
People can also share information regarding any such entity on this portal, Mundra said.
 
The website also incorporates regulations prescribed by all financial regulators that one has to follow. 
 
'Sachet' also has a section for closed user group for State Level Coordination Committee (SLCCs) wherein they could share market intelligence and other information about their activities as well as agenda and minutes of meetings across the country in real time.
 
All states have SLCCs comprising of various regulators, including RBI, Securities and Exchange Board of India (Sebi), National Housing Bank (NHB), Insurance Regulatory and Development Authority (IRDA), Registrar of Companies (ROC) and concerned state government departments, such as, home, finance, law and various police authorities. 
 
Mundra hoped that the website will act as a 'force multiplier' and go a long way in making the SLCCs more effective in curbing the menace of unauthorised money raising activities.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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