TREND QUALIFICATION WITH EXAMPLE OF SILVER
The building boxes give the fair idea of strength of trend. After a price correction, there has been a time correction. The time correction lasted from two to four days. Price retraced till the bottom of box giving opportunity to add or what they term as pyramiding.
Everytime market retraced my heart sank with pervading thoughts that I should have booked profits at the top. However this time my patience and perseverance paid and with heavy heart I held onto the Jun series silvermic futures. The factors for convincing myself were that never was previous box never violated and though at times such candles were momentum candles and that too with volumes. Even on four hour chart, I have found that volume is a big cheater. (Will Post on the subject separately with more research).
Surprising factor was that both approach & BO candles were momentum candles confirming the strength of trend less the last one. In the move to the last box the approach candle was missing and BO candle was good momentum candle.
Pitchfork Analysis clearly showed that price had reached the top edge of the pitchfork.
Confluence of factors for booking profits. Top edge of pitch fork, lack of apch candle(This aspect requires more study), large candles showing exhaustion, monthly trendline resistance. Hence booked profits capturing nearly ten thousand points(Though missed the top with some 500 points more, it is not always possible to catch the top & bottom but one should be able to capture major move and not regret few points here and there).
Studying trend qualification is important aspect both for holding and pyramiding and profit booking. How to identify whether it is a major or minor trend will post my study separately.
More than looking at the profits one was overtly satisfied that I had taken a “one good trade”(There is good book with same name by Mike Bellafiore of SMB Capital. It’s a good reading). Money is the consequence for one who adheres to the process, I think that’s what Lord Krishna said that don’t worry about fruits just keep doing your duty. If one adhere to ones setup (Process) and having implicit faith and conviction in oneself GOD rewards you with whatever you desire. What’s important is the process and not the fruits of desire. And of course the humility to be a willing seeker to learn from markets and others.
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Nature's marvels and its inherent geometry. The pitch fork gave exactly the top.
Views welcome
Regards