Anatomy of Chart Patterns: Introduction

When I started learning chart patterns, the first few questions I asked myself were, why do chart patterns work? Is it because the book said so, then every body follows the book and makes it a self fulfilling prophesy? Or is it just a statistical observation made by some one that a particular pattern of price moves gives clues for the next price move? Or is there some thing not-so-obvious behind the scenes? Or just random? I guess a lot of us might have the same questions, may be some answered and some unanswered.

This is one of my attempts to find my answers. So, lets lay down the rules and what you can expect from the "Anatomy of Chart Patterns" series.

No copy-paste from books, I will write what my experience taught me and I believe about the pattern
Postmortem on failed patterns
Points that helped for a pattern to be successful

Hope you will find this useful in your journey of learning patterns

Intraday Tick Data for all NSE Indices, CNX 500 Scrips, Futures and Sensex

I have started collecting Intraday Tick data for for the following catagories:

1. All Major NSE Indices (Nifty, Defty, BankNifty etc)
2. Sensex from BSE
3. All CNX 500 Scrips
4. All Current month Underlyings Futures

I will be posting this data on my blog every day as time permits. All individual tick files are ziped to one file, and the size is coming around 3.5 MB to 4.0 MB every day. I am using 7-Zip to compress, which has given best compression results among other utils. Incase of ZIP file Extration Errors, please download and use 7-Zip. Thanks to Khokan for bringing out this problem.

Data format is like this:

File: SCRIP.csv
Format: Scrip, YYYYMMDD, HH:MM:SS, Open, High, Low, Close, Volume, Open_Interest

Please download AmiBroker Format file for using with Amibriker, from File menu >>Import Ascii

Tick data is very usefull for research and learning purposes. When you are studying price action at certain break outs/break downs or any volume based theories, there is a wealth of information that is only visible in tick data. Hope you will find this usefull. Please leave any comments or suggestions if you have.

DISCLAIMER: The data is provided as-is and I assume not responsibility for any errors. It is common to have errors in the data, even for NSE feed and suggest a discretionary approach at this.

About this blog

Ok, let me talk a little about myself before I talk about my blog. I am an Engineering graduate, worked as a Software Programmer for a brief period and quit for home making. Now I am a full time trader.

I am a day/swing trader and I trade cash and F&O segment. My trading is purely based on Technical Analysis and Chart Patterns is my specialty. My main motive of starting this blog is to discipline myself and help me review my progress as a Trader

In this blog, I will write about various chart patterns as they appear in the stocks I track, various indicators, trading strategies, market movements, my learnings etc. I will also try to post some interesting charts live and also at the end of the day, I will post my trades with some rational explanations in the chart. I will appreciate any comments and suggestions.

Hope you will find my blog interesting to read!

What is doji, the name I got?

Well, if you have guessed Doji could be my pen name, you are right! I named myself after the famous Japanes Candlesticks pattern, Doji. Short and sweet, doesnt it? :)

For those who dont know Doji, it is one of the powerfull Japanese Candlesticks reversal patterns, identified by a single candle having nearly same open and close values. The image is an example of doji formed in Nifty on 4th October 2002.

There are few types of Dojis based on where they are formed on the chart, and many other types of candlestick patterns. Read more on the web if you are interested. If you want to master candlestick patterns, read the book Japanese Candlestick Charting Techniques by Steve Nison.