Hello Traders, In this Elliott Wave update, I am presenting you with a trade idea that was shared with the members of the exclusive club about 10 weeks ago ( April 4 to be precise). That trade idea was to invest in Reliance Communication and I am happy to note that today the stock has returned 100% profits to those who have held it in their portfolio. The reason for posting it in this blog is solely to demonstrate how one should go about using Elliott Waves. This blog seeks to teach you that. Enjoy.
4 April 2013 Many of you have been following my recommendation on Reliance Communication on my blog. The recent news about the rapprochement between the Ambani brothers augurs well for this stock, and the technical picture supports this view. Take a look! Good luck.
8 April 2013 I wonder if you have read my book “Five Waves To Financial Freedom”. In one of the chapters there, I have described a common scenario where a trader waits patiently for a 2nd wave and buys a stock. It starts moving in his favor, and he watches rubbing his hands with delight. But quite suddenly, something happens, and the stock starts coming off, this time it breaks below his purchase price. Our trader’s mood swings from joy to despair. He cannot bear to see his paper profit all vanish, and now he sees a paper loss. Of course, his original stop loss is still far away, but that is a different thing. In his mind, all that matters is he has lost all profits that he could have made, and now he has the compulsive urge to cut his loss before it runs away. So he either immediately gets out, or he gets out as soon as he sees a break-even price. After a few sessions, the stock roars higher, leaving him in the dust. Our trader tells anyone who would listen, including his wife, friends and his cat/dog that he was long at the right level, but was shaken off by the stupid market. I am narrating this story because you should not make the same mistake. We had 2 buy levels for RCOM. The first one was done, but if it dips again to the second level, you should still consider buying there. Don’t rush to sell! If your stop loss is done, well, that is the price of trading the market. You cannot hope to trade without expecting to lose some trades. But if you sit on your hands for most trades, and get into one when you feel you cannot wait any longer, then that is the trade that will most likely result in a loss! Be consistent, trade amounts that wont bother you too much if it results in a loss. *But trade a size that makes sense*. You cannot invest Rs 10,000 in a trade, pay me $50, pay the brokerage etc and still hope to make money. This is why I had said that members of this exclusive club are not meant to be small traders. You should know what is the correct position size for any trade. This size depends on your individual financial situation. You should know already that money is there in the markets for the intelligent trader. Take all trades, and over time you will see your bottom line is growing nicely. Good luck.
11 Comments
Ramki,
It is so sad to see your wonderful blog turning into a “Promote Your Book and Premium Service” website. I certainly thought you were different. But alas, I stand corrected.
Anmol
Hi Anmol, Thank you for your comments. Do you seriously think I make my income from the book or the website? If so, you need to read my Bio and what I do for a living. The Premium Service is meant for those who are willing to pay and I have no need to promote it. There have been 3-4 trades in it over the last 2 months, and if my intention was to make money from it, I will be publishing 2 ideas every day. But thank you for asking me, because it gave me the opportunity to put things in perspective.
Sir Reliance communication today the stock was up by 12%. Is this the start of new 5th impulsive wave or the third wave is not ended.
John, You need to look at the internal waves and then decide. Use the techniques explained in FWTFF to help you.
ur nifty analysis is supereb. from where i will get your book to get the knowlwdgw of elliot wave.Awaiting for your reply.
Mihir, Thank you. I would be happier still if you learn something from the various other posts. Good luck.
Hi Ramki,
I am a regular follower of your blog, I was really sad when it recently went inactive. I have read your book it has been a great help, from what i have leart, I see Rcom going to the levels of 240 – 260 before the end of this correction rally. Can you please again update this post this will be of great help.
thankyou
Paras
Paras, thank you for writing. It is true that there are not that many updates in recent months. This is because of my additional responsibilities at work. I am a full time treasury manager. But I do try and reply to readers comments whenever possible( like right now I am at El Calafate in South America )
Hello Sir
Thanks a lot for a very nice book, i am happy that i have purchased it.And also i would thank you for this teaching methodology with graphs and comments there itself, it helps in understanding the concept much better.You are doing a very noble work of guiding us, as for every other profession you get teachers guides books and many other stuff, but in stock market its very difficult to get the guidance which actually help in making money.I am from india please keep guiding us, i will be very happy to attend if you have any workshop in india,thanks a lot
Sir it has violated your pattern n making all time lows. so what’s next for Rcom. can we sell it now for 5th wave
Samay, If you read my blog over time you will see that my wave counts are valid for the trade and for that time. The original analysis returned over 100%. Wave counts change with changing fundamentals. The Wave principle is a tool to trade, not to get the right counts. One will have to re-do the wave counts in all its various degrees now if we are contemplating a trade afresh. The old pattern is no longer relevant.