There is a substantial risk of loss associated with trading Derivatives . Losses can and will occur. My methods will not ensure profits

Thursday, August 2, 2012

02082012

Nifty gaped down a little and sold. Bias was bearish . I was looking to short . Did not retest DO-IR High. LOL BOF of IR Low/PDL was a long signal. Got stopped out. Hesitated to go long at A after the second BOF. Missed a good move. TST of DO gave a short signal which made a little profit. Last BOF of HOD was a scratch.
Follow up action is missing even after strong BOF.There is a lack of interest in the market. There is no participation from traders. Volumes are drying up what could be wrong ?


8 comments:

  1. ST, I think there are buyers stepping in around 5220 and the Spot to Futures premium hints at a breakout over 5250 spot.

    Tomorrow is the day of some action.

    Thanks,

    ReplyDelete
  2. Could get in at A to exit at 46. Earlier got stopped out of a long at IR low. Later on went long around 2:30 when prices moved up 10 points over WMA. Went along with the bear squeeze and exited at 3:28.
    Today qualifies for a NR-day so possibly tomorrow may be large range day. my bet is on the downside.
    rb

    ReplyDelete
  3. My experience is it is difficult to trade when the trading range for the day becomes small. Where the high/ low difference for the day is 20-30 points, breakouts become unreliable. A breakout should ideally lead to a big move and if it fails to happen, then it means something else is happening and we should exit a trade.

    ReplyDelete
  4. KPL - look at volatility cycles - low vols will be followed by high vols followed by low vols. So a small range means there is a good chance of BO - but one may decide not to take the trade due to other factors. When Nifty vols are 1.5% BO will give 30 points, when 1% as these days BO will give 15 points etc.
    regards
    rb

    ReplyDelete
  5. Chart is same. Price action is same
    But different traders look at it in different ways and end up with dr or cr in their trading account.

    For eg
    I saw the gap down and pullback as BPB and shorted at pullback and covered at PDL.

    ReplyDelete
  6. @ KPL Sir

    You are right.If the breakouts are not working, something is wrong. there is a lack of interest among participants. Better to avoid mediocre setups.

    ST

    ReplyDelete
  7. @ SS
    Today being Friday there could be some action it seems

    @Raghu

    Could not follow your 1%, 1.5% volume criteria for breakouts. Would you be kind enough to elaborate.

    @ Anon

    That is the beauty of trading.
    Beauty lies in the eyes of beholder. so true.


    ST

    ReplyDelete
  8. Sorry not volume - but volatility. With nifty range of 75 points (1.5%) approx one could look for 3 legs of 30 points each. For lesser nifty range 3 legs of 20 points etc. This could become BO targets. Lately with compressed nifty range we are hard pressed to find 15point legs. As i write this nifty has made a 50point move. so things are back to normal it seems, volatility wise.
    rb

    ReplyDelete

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