It was May 1993, that I was working for a finance company as an investment consultant for the Non Resident Indians (NRIs). My office was adjacent to the equity research centre of that company. This was the place where for the first time I saw stock charts & while interacting with the researchers, I learnt about the fascinating field of trading & investing. I was so mesmerised by the charts & stories of markets, that within months I found myself working on charts & reading my first bought book on technical analysis – Technical Analysis of Stock Charts by Edwards & Magee. Thereafter, I kept on reading, understanding & practically testing some of the renowned fundamental & technical methods of analysing the traded financial markets & securities. Everything was going well & I had started making huge amount of money but beyond market analysis, there were many areas I overlooked. One fine day my broker turned bankrupt & before I could realize anything, I had lost my entire accumulated wealth. It was the most stressful & painful phase of my life.
My friends & relatives advised me to quit & change the profession but by then I had realized that trading & investment was not only my occupation, but my deep passion as well. I decided not to quit but to bounce back in a big way. I knew that I had inquisitive nature, perfectly suitable for research & I was also a good orator. I designed an executive development programme for the corporates to accumulate funds to restart trading & investing.
I restarted from the basics. I bought the first book written on the markets by Joseph Vega in 1688 – Confusion of Confusions and continued studying up to the latest methods of algo & high frequency trading. One by one great writers, analysts, funds managers, investors & traders stated showing up in my life. I spent lot of time in testing the Candlesticks & other Japanese Charts, Elliot Waves, Harmonic Trading & Gann Charts. I could learn these methods directly from the world-known experts & their writings.
It was painful to confirm that most of these popular methods are too theoretical & are good only for academia, commentators, trainers & writers. They failed the tests of simplicity & consistency in trending as well as ranging markets. I could realise that markets have their own & unique way of discounting the past, present & upcoming future events, in the security prices. The nonlinear market systems are under no obligation to abide by the mathematical, statistical or geometrical projections. Algo trading systems, therefore, can’t perform consistently in trade selection, but are used only for trade execution. Expecting algo systems to generate profits every day & day after day, is a traders’ dream that just can’t come true. I also realised that successful trading & investing is an art, it’s the skill of effectively using a well-defined & experientially proven system. I continued my research to discover, test & confirm a trading & investing system that could pass the three tests - simplicity, consistency & profitability in trending as well as ranging markets. Sigma-Line System is the outcome of my practical experience of almost three decades.
While studying the research works of S. A. Nelson, William Hamilton, Robert Rhea, Richard Wyckoff, Jesse Livermore, Richard Schabacker, H.M. Gartley, Edwards & Magee, John Murphy, Martin Pring & many others, I noted the influence of Charles Dow’s editorials in The Wall Street Journal. It was clear to me that the original work on Technical Analysis was done in the first half of 20th century. Thereafter, only the mathematical, geometrical & statistical models, software designs of averages & price bars are presented as new methods.
I carefully studied editorials of The Wall Street Journal, written by Charles Dow & I could trace that greatest discovery, the eternal secret of charting & technical analysis.
On 4th January 1902, Dow stated the principle of trend, in the following words:
“It is bull period as long as the average of one high point exceeds that of previous high points. It is a bear period when the low point becomes lower than the previous low points.” In the same article he stated the principle of ‘swings within swings’ in the following words:
“Nothing is more certain than that the market has three well defined movements which fit into each other.”
This is the Greatest Discovery, the eternal secret of trading the stocks, commodities, forex & indices. Let me explain the practical implications of these statements:
Trend, as discovered by Dow has three directions & three dimensions. When successive highs & lows are considered, the three trend directions are Bull, Bear & Sideways. Higher Highs & Higher Lows mark Bull trend. Lower Highs & Lower Lows mark Bear trend. Ranging Highs & Lows mark Sideways trend.
When three sequential charts are considered, the three trend dimensions are Tide, Wave & Ripple. There can be only three dimensions possible because, at any given point only three sequential charts are directly connected. Dow called them Ripple, Wave & Tide. Ripple is the short term; Wave is the medium term & Tide is the long term trend & the three trends ‘fit into each other’. Ripple fits into Wave & Wave fits into Tide. Thus, if we consider any three sequential charts like Daily, Weekly & Monthly, the three charts fit into each other. Daily charts fits into weekly chart & weekly charts fits into monthly chart.
1902 was the time when markets used to provide limited trading data, but today, we get even the tick data of milliseconds. I discovered a system for using this greatest discovery in any three sequential charts like [01min., 02 min. & 04 min.] or [01 min., 03 min., & 09 min.] or [01 min., 4min. & 16 min.] or [01 min. 05 min. & 25 min.] charts with 2, 3, 4 & 5 chart multiplayers respectively. Sigma-Line Trading is the perfect expression of Charles Dow’s greatest discovery & my Theory of Triple Trend Integration. It proves beyond doubt that price levels of the sequential charts [depicted as sigma-lines on charts] reveal everything that traders or investors need for entries & exits - trends, targets, supports, resistances & momentum.
I take this opportunity to request all the users of Sigma-Line Trading System to spend some time on practice. This is the simplest possible method that anyone can use easily, but there is no substitute for experience. Real time use of Sigma-Line only will give you confidence to become a successful trader. Use the trade-sheet given on the website to practically identify sufficient number trades before trading or investing. Do attend my FREE webinars to interact with me.
Wish you all the best. Enjoy trading for an affluent living.