Kolachi Method of Trading
Axis of Kolachi Method:
In the first post of Kolachi MethodI have described Axis of this method as 200 ema.
To explain the reason why ema200 is axis of Kolachi Method, I will start with the Quantum Mechanics.We all know that tiny-est particles in physics are mesons which live in the nucleus.They are of different varieties and flavours.They spin around their axis and have an specific angular momentum alongwith other magnetic momenta.These are collectively called quantum numbers.Then at higher level comes protons and neutrons.They do have an axis and revolve around it.They are usually packed in nucleus which in turn has its own axis around which it spins.The nucleii are circumabulated by electrons as though they were their lovers and dont wanna go away.
Now we reach atom which is the building block of materials which we see and feel.Atoms are grouped into molecules and molecules make compounds.Those who have studied chemistry know better than me that all these miniscule particles are restless and vibrating and have some axis under whose obedience they are.
Who does not know that moon loves earth.Although moon spins around its own axis but it is height of its love that it never has turned its shining face away from earth.
Earth has axis and revolves around sun, which in turn spins around itself as well as revolves in the Milkyway.All astronomers know that Milky way is bound to revolve around cluster of galaxies and so on and so forth.
Now it is established that from meson to Milkyway evryone is circumabulating.
It is only man who was supposed to circumabulate around the Personalilty of his Creator but he is defiant by nature.Here comes the story of wma and emas.Those who are defiant are always forced to surrender.Everyman in life sometime calls that Almighty Personality for help and thus surrender to His Decree.
In forex the prices vibrate around axis.But question is what axis?Can we say that meson is not revolving around sun, but it is revolving around its own axis? No we cant say because if earth revolves around sun then everything on earth revolves around sun.Similarly, price revolves around axis.But which axis?The axis starts from ema1 to ema1000 or may be higher.Price always averages around these axes.How price averages around these axes.Yes , it goes to one side and then crosses and goes to other side so that net result is the average price of the ema.
I have drawn 1000 ema on my chart and have seen price vibrating around it.But it vibrates in such a long time that we cant trade if we select it as axis.The price vibrates around wma5 and at the same time it is coming closer to ema21 and then ultimately crosses it to other side thus completing one vibration and then repetition.Ema 21 vibrates around ema55, which in turn vibrates around 100 and then comes saga of 200.
In Physics, experimental data is given mch value.The empirical values which are found with hard work are very important for engineers.Although empirical value may not been exact but it is always agreeable with the exact value.
I have watched the charts for one year with the same emas and have found few empirical rules which are collectively called Kolachi Method.
I have experimentaly seen that ema200 is the axis of price for 6 months and 20 days.It does not mean that 144 ema or 100 ema is not axis but an axis which covers six months of price action has more practical importance than ema100 or so which covers little time period.I have seen charts and have found that price usually cycles ove one year.
Why? Because price is nothing but picture of economic events in different countries which have a fixed calendar of events spread over almost same month of every year.
Thus ema200 is the axis of Kolachi Method.
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Kolachi Traders
This Excerpt is taken from FF which shows the history of Kolachi Traders:
"In 1984, Richard Dennistaught a trend following method to a group of students who were called Turtle Tradres.This project was a joint work of Richard Dennis and his friend William Eckhardt.
It was thier greatness that they shared their system with these people and a new trading system was made public atleast to a group of people which later on reached the general public.
Here we are a new group of traders called Kolachi Traders.We are no match to the names I have written up just for example.But David Kolachiis the first Kolachi Trader.
I have tried my best to teach a group of people who feel themselves in difficulty in intial time of trading and lose money.I am a full time trader.I could have continued with my trading but rather decided to share it with those who really need it.Therefore here begins the story of kolachi Traderswho will be among the successful traders in their time."
kolachi
HI..
can you give pictures for your trading method...
Pj
Basic Facts
Who is Kolachi Trader?
A trader who follows Kolachi Method of Trading is called a Kolachi trader.
What is Kolachi Method?
Kolachi Method of Tading is a method designed by David Kolachi to trade forex markets, stocks, and commodities.It is a technical method which uses different moving averages of price, median lines drawn around axis and MACD histogram.
Who started Kolachi Traders?
David Kolachi is the first Kolachi Trader who started it and was supported by Brendan who is the second Kolachi Trader. Later on, a third Kolachi Trader joined the circle and identified himself as Valerie. Thus a circle of Kolachi Traders emerged and is expanding day by day.
What is Purpose of Kolachi Traders?
The common point among the Kolachi Traders is frequent use of tools and techniques elaborated in Kolachi Method to enhance profitability and become successful traders.
Birth Place of Kolachi Traders?
Forex Factory is the birth place of Kolachi Traders where they formed it and shared their ideas.But later on FF banned Kolachi Traders and erased threads of Kolachi Methods.
kolachi
Prima,
Thanks for your interest in Kolachi methods.Certainly I will post charts here and i have hundereds of charts which I traded live with this method.But first i am trying to post related stuff so that it becomes a compact intro of the method.Later on we will discuss charts and question answers.
kolachi
HI..
can you give pictures for your trading method...
PjMartingaling in Koalchi Method (c)
Martingale Entry in Kolachi Method:
Martinagling in gambling and trading is quite different.In gambling, the gambler doubles the bet with a hope of wining all lost money.
In trading martingaling is adding money to a losing postion.In Kolachi Methodentry is never a blind entry or jump in the market.When a Kolachi Trader has a reason to beileve then he enters.for some reason price went the other way.Now there are two possibilities:trader comes to know that his analysis was wrong and he accepts it.The other is that trader knows he is right but price is taking time to go his way.It is the time when martingaling is allowed.
Let us say I saw a bullish Divergence on chart.The slope of wma changed and I entered long.But the price turned and fell down more.I am still postive that MACD is supporting me so I wait for the slope up again.Price makes another low and MACD did not fall that low.It is time to martingale the postion bczo you have reason to believe that price will head up soon.
You again see that price fell down once more and MACD still is up.You can martingale one more time on slope change.
The second martingale is the last martingale allowed in Kolachi Method.Now you cant enter more lots.
kolachi
Pyramiding in Kolachi Method
Pyramiding in Kolachi Method:
Rules of Money Management in Kolachi Methodsay that Pyramiding is allowed in certain conditions.It means that in ordinary conditions it is not allowed.
Let us consider what is pyramiding.To understand it we will have to understand what pyramid is.We know that pyramid has a wide base and its sides are tilting toward axis which connects base to the tip of pyramid.
As we rise from the base the cross sectional area of pyramid perpendicular to axis starts decreasing and as we reach half way up, the cross sectional area is reduced to half.When we reach the tip, cross sectional area becomes zero.
In trading the cross sectional area is infact our risk reward ratio.When we locate a trade, we are at the base of a pyramid.There can be different risk reward ratios in trading.Similarly there are pyramids of hundreds of dimesnions.But here we are dicussing anyone such pyramid.
When we place a trade, we have maximum risk reward ratio available to us, which means we have hundred per cent cross sectional area of pyramid.When trade reaches 50% of the target then our risk reward ratio for a new trade at this point is reduced to half.And at the target itself there is no question of taking a new trade.
Kolachi Method has only motto:to preserve your capital from excessive exposure.
As per Kolachi Method when we place a trade we must have a risk reward ratio less than one to take a trade.We cannot use pyramiding on a trade with such risk reward ratio.
1)When we have a trade in which we have a ratio is 1/3 then we can pyramid it one time prior to or reaching at half way through.
2)The best place to pyramid is diplomatic channel if it satisfies above the above rule.
3)When price moves against your trade in Kolachi Diplomatic Channel and touches the ema and wmachanges slope place the pyramid trade.
4)When price has crossed the half way to target, pyramiding will be suicide.
In Kolachi Method only one pyramid trade is allowed in every 1/3 ratio.Kolachi Method does not cosider pyramiding technique as good one.It exposes you with more risk than you were exposed at the outset.
Now by opening a new trade you have averaged down the cross sectional area of pyramid and thus exposed yourself to an unnecessary risk in greed of few more pips.
kolachi
N.B.Kolachi Method and its Rules are copyrighted (2006) under law.
Protoclos and Diplomatic Channel
Protocols and Diplomatic Channel:
When we know about the Kolachi Concepts about Protocols of emas and Diplomatic Channel we have a definite edge over ordinary trader.
Those who have ever read about Fluid Mechancis or Dam spillways, they can better relate the price behaviour in the Diplomatic Channel like Hydraulic Jump.The price flows down like water from the spillway, gets floor at the lower ema of the channel and then comes the hydraulic jump to dissipate the energy of the fall, so consequesntly price rises up and when it touches the upper ema of channel it almost loses its hydralic jump energy and then again it comes down.
Those who do not understand hydraulic jump I will explain it in price terms.
Please look at the daily chart of aussie.You can see that price touched ema200 (the lower ema of DC100/200) and then jumped up.The rise upward was in obedience of protocols as there was cross due between ema21 and ema55.The price touched upper ema of DC100/200 simultaneously when cross gone through and the price slipped down again.
Now the protocols of emas held ema21 from crossing ema200 because a cross between next higher emas that is ema55 and ema100 wa sdue.If this cross would have happened then ema21 would have been allowed to cross down but seems that process has been intercepted for a while as cross is not through but going parallel and ema21 is also parallel to and seems heading up.Therefore , the wma5, the slave of ema21 has been called up by ema21 as it has been rejected by ema200.
kolachi
N.B.Kolachi Method and its Rules are copyrighted (2006) under law
Birth Place of Kolachi Traders?
Forex Factory is the birth place of Kolachi Traders where they formed it and shared their ideas.But later on FF banned Kolachi Traders and erased threads of Kolachi Methods.
kolachiCould you tell us why?
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