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Understand each word & sentence by using the detailed document &
thereafter, BY-HEART Page No. 1, 2, 3 & 4:

1. Strong Bullish Trend & Momentum:

Buying for investing or going long in trading requires strong bullish trend & momentum.
1.1. Trend is bullish if green price bars are above the sigma line.
1.2. Trend & momentum are strongly bullish if green price bars are above the green sigma line.
1.3. A Blue Point below the price bar indicates that tide, wave & ripple have turned green at
that point.
1.4. Trend & momentum remain strongly bullish if after an up breakout, a green sigma line
segment flips down & thereafter, starts making higher highs & higher lows.
1.5. Trend & momentum are not reliable if after an up breakout, a green sigma line segment
flips down & thereafter, starts making lower highs & lower lows.
1.6. Trend & momentum are strongly bullish if a bearish fakeout flips the green sigma line
segment down & thereafter, starts making higher highs & higher lows.
1.7. Trend & momentum are strongly bullish if the sigma line segments are short (equal or
shorter than the adjacent segment). Longer sigma line segments (longer than the adjacent
segment) make the bullish trend & momentum weak.
1.8. Trend & momentum are strongly bullish if the green price bars are making higher highs &
higher lows. Green price bars making lower highs & lower lows weaken bullish trend &
momentum.
1.9. Trend & momentum are strongly bullish if price bars close above the previous price peak
or sigma line segment.
1.10. Trend & momentum are weak when green price bars are above the orange sigma
line.
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2. Buy or Long Entries:

2.1. Enter after an up breakout or bearish fakeout, close to the sigma line to minimise the stop
out risk.
2.2. Avoid entering in between the rallies unless sigma line is close-by.
2.3. In the cases of gap up open, enter after the price close above the high of the gap up open
price bar.
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3. Safe Stops & Trailing Stops:

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3.1. Safe stop is placed below the previous minor low, as after the breakout, sigma line segment
takes time to flip down.
3.2. Trailing stop is placed below the selected sigma line after the down flip. Thereafter, stop
is trailed below the higher sigma line segment.
3.3. Trailing stop is never placed below the earlier trailing stop.
3.4. Tide, wave & ripple sigma lines must be frequently checked before trailing the stops.
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4. Partial profit booking:
4.1. Booking partial profit to cover the stop loss risk is always a better strategy. Seasoned
traders & investors don’t wait for the exit signals, but they book partial profit as & when
possible.
4.2. If the price bars move far above the selected sigma line, other sigma lines should be checked to
move closer, or partial profit can be booked.

4.3. It is advisable to book partial profit & make the trade or investment safe. Once the prices
come closer to the sigma line & bounce, the offloaded quantity can be reloaded.
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5. Enter right & sit tight till stopped out:
5.1. If entered right, keep trailing stops & sit tight till the trailed stop is hit.
5.2. Be watchful to identify green price bars making lower highs & lower lows or green
price bars failing to break above the previous price bar peak or sigma line segment.

6. Strong Bearish Trend & Momentum:

Short selling in trading requires strong bearish trend & momentum.
6.1. Trend is bearish if red price bars are below the sigma line.
6.2. Trend & momentum are strongly bearish if red price bars are below the red sigma line.
6.3. A Pink Point above the price bar indicates that tide, wave & ripple have turned red at that
point.
6.4. Trend & momentum remain strongly bearish if after a down breakout, a red sigma line
segment flips up & thereafter, starts making lower highs & lower lows.
6.5. Trend & momentum are not reliable if after a down breakout, red sigma line segment flips
up & thereafter, starts making higher highs & higher lows.
6.6. Trend & momentum are strongly bearish if a bullish fakeout flips sigma line segment up
& thereafter, starts making lower highs & lower lows.
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6.7. Trend & momentum are strongly bearish if the sigma line segments are short (equal or
shorter than the adjacent segment). Longer sigma line segments (longer than the adjacent
segment) make the bearish trend & momentum weak.
6.8. Trend & momentum are strongly bearish if the red price bars are making lower highs &
lower lows. Red price bars making higher highs & higher lows weaken bearish trend &
momentum.
6.9. Trend & momentum are strongly bearish if price bars close below the previous price trough
or sigma line segment.
6.10. Trend & momentum are weak if red price bars are below the orange sigma line.
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7. Short Sell Entries:

7.1. Enter after a down breakout or bullish fakeout close to the selected sigma line to minimise
the stop loss risk.
7.2. Avoid entering in between the rallies unless sigma line is close by.
7.3. In the cases of gap down, enter after the price close below the low of the gap down open
price bar.
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8. Safe Stops & Trailing Stops:
8.1.Safe stop is placed above the previous minor high, as after the breakout, sigma line segment
takes time to flip up.
8.2.Trailing stop is placed above the selected sigma line after the up flip. Thereafter, stop is
trailed above the lower sigma line segment. Trailing stop is never placed above the earlier
trailing stop.
8.3.Tide, wave & ripple sigma lines are frequently checked before trailing the stops.
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9. Partial profit booking:

9.1.Booking partial profit to cover the stop loss risk is always a better strategy. Seasoned traders
& investors don’t wait for the exit signals, but they book partial profit as & when possible.
9.2.If the price bars move far below the selected sigma line, other sigma lines should be
checked to move closer, or partial profit can be booked.
9.3.It is advisable to book partial profit & make the trade safe. Once prices come closer to the
sigma line & move down, the offloaded quantity can be reloaded.
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10. Enter right & sit tight till stopped out:
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10.1. If entered right, keep trailing stops above the sigma line & sit tight till the trailed stop
is hit.
10.2. Be watchful to identify red price bars making higher highs & higher lows or red
price bars failing to break below the previous trough price bar or sigma line segment.
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11. Critical points successful traders & investors watch & act:
11.1. Green sigma line segments making lower highs & lower lows after the up breakout &
down flip, are dangerous.
11.2. Red sigma line segment making higher highs & higher lows after the down breakout &
up flip, are dangerous.
11.3. Green price bars above the green sigma line making lower highs & lower lows are
dangerous.
11.4. Red price bars below the red sigma line making higher highs & higher lows are
dangerous.
11.5. Long green OR red sigma line segment getting extended is dangerous.
11.6. Green price bars above the green sigma line failing to break above the previous price
peak or sigma line segment is dangerous.
11.7. Red price bars below the red sigma line, failing to break below the previous price trough
or sigma line segment is dangerous.
11.8. Whenever a green price bar close is seen substantially lower than the price bar high,
previous price peak or higher sigma line segment must be checked as resistances.
11.9. Whenever a red price bar close is seen substantially higher than the price bar low,
previous price trough or lower sigma line segment must be checked as support.
11.10. After a gap-up open, enter only after the price close above the high of the breakout bar,
not before.
11.11. After the gap-down open, enter only after the price close below the low of the breakout
bar, not before.
11.12. When price bars move far away from the sigma line, other sigma lines are checked to
move the trailing stop closer to the price bars. If that doesn’t work, partial profit must be
booked.

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Like any other skill, 10 % learning & 90 % practice is the only way to master trading &
investing. Following are the tried & tested steps in learning, practicing & perfecting the
use of Sigma Line Charts.
1. By-heart these 11.12 points, word by word, sentence by sentence.
2. Understand each word & sentence by watching sigma line charts & the detailed
document uploaded on sigmalinetrading.com.
3. Identify at least 100 successful cases each of scalping, intra-day, swing, short term
& long term investing.
4. Identify 100 unsuccessful cases each of scalping, intra-day, swing, short term &
long term investing, despite perfectly following these 15.5 points.
As a researcher, trader & investor, I can only say this much; anyone & everyone can
become a successful trader & investor by following these 4 steps.
Mastering the use of sigma line charts is One Time Investment that will keep yielding
returns throughout your life, in any traded market of financial securities.
- Dr. Pravin Mokashi
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