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

Thursday, January 31, 2013


Resilience is generally used to describe the ability of a material to absorb energy when it is deformed elastically without creating a permanent distortion. In psychology, resilience is an individual's ability to cope with stress and adversity. It is the ability to "bounce back" to a previous state of normal functioning after a failure or setback.

It is quite natural that every individual will do poorly during many major life transitions. We will always find it difficult to adapt to the changing situations. There will be adjustment difficulties during situations such as switching a job, getting married, becoming a parent, retiring from service, shifting to a new place etc. While facing negative life conditions the impact will be more and this can create major problems.

This has huge relevance to trading. All the successful traders have gone through difficult times. They have tasted defeat. Many have undergone very significant losses during their learning period. However, they stayed in the game longer, through sufficient capital and prudent risk management and eventually enjoyed their success as consistently profitable traders.

Resilience is often mistakenly identified as an individual trait. In reality it is the sum total of many individual traits and skills. Several factors are found to modify the negative effects of adverse life situations and help to build resilience. Here are some suggestions to build resilience

  • Build relationships with family, friends and other traders
  • Accept everything that you have no control
  • Ensure your goals are realistic
  • Learn to take decisive action
  • Keep a long term perspective.
  • Maintain a positive outlook

Prerequisite of a high level of success in trading is a high level of resilience with respect to loss and defeat. A successful trader is one who turns losses into gains by generating learning experiences for continuous self-improvement.


Nifty opened within previous day . Did not get any reliable signal in the morning session. Did not attempt any trades in the afternoon due to expiry. But the usual expiry drama was missing

Wednesday, January 30, 2013


Nifty opened within previous day range and consolidated within a 20 point range. Attempted a long trade on the second  TST of PDC. Scratched it. Skipped the BOF of HOD as price refused to fall below the flip ( or MC ? ) for a long time

Tuesday, January 29, 2013


Another announcement day. Be very careful on such days. Our methods may not work well. People are trading news and the natural ebb and flow of the market get disrupted. Waited till the market stabilized after the announcement. I considered the green WRB which made HOD as a Master candle. But shorted before the break of its low when the third attempt to push higher failed.This moved well. Did not attempt any other trade as I expected a chop.

Monday, January 28, 2013


A Year has flown by and I am so happy to be here, still blogging.

I started “Nifty Nirvana “on a whim a year ago. I was an active blogger long back and never expected to start blogging again. I was reading tons of material on price action trading and had many ideas of my own. These ideas were all scattered around in my brain and I felt the necessity to arrange all these in a logical order and convert it into an actionable method. This was the starting point.

I did not have a plan when I set out on this blogging journey. Everything just happened along the way. I feel happy that I could produce something that I am happy with. Now I am really enjoying this

Everything I have written about here is in public domain. Nothing is new. I have just filtered the already available information with my “Common Sense” filter. I tried to snap the picture from a different angle. I borrowed and stole many ingredients from all over and mixed my own cocktail. That is all.

I am thankful to SS of bntrader and KPL Sir of vfmdirect for sending people this way. They really made this blog popular. I am thankful and so grateful to all of you for the encouragement and for your thought provoking comments. I believe I could give you at least one “Aha” moment in your trading
So let me raise a virtual glass to say Thank You.

Cheers !!!


Nifty opened within previous day closing range. BOF of PDH gave a short signal. Covered at MSP. Did not trade TST of MSP and BOF of HOD

Saturday, January 26, 2013

Scratch and Win

"Cut your losses and let your profits run”

You might have read this good old market wisdom a thousand times. In reality it is easier said than done, especially in day trading. In day trading arena trying to trend trade is a recipe for disaster.

Most of the time markets make narrow intraday moves in both directions. Intraday trends will not sustain for long. If we patiently “let the profits run”, we are going to get stopped out regularly. Most of our initial gains will turn into losses.

The usual practice among most of the traders is that they decide on a target and a hard stop. Once a trade is entered they wait till one or the other is hit. In my opinion this method is not going to work. We may require a more active trade management to win.

Let your profits run only during strong established trends where you can trail your stops behind the flip zones. When the market is not in a strong established trend, take small quick profits. Every trade should start as scalp to the FTA (First Trouble Area). Once you feel the initial edge is gone, that is when the market fails to break the FTA, exit immediately without hesitation. Never wait for the market to hit your hard stop.

Do not wait till the market proves that you are wrong. Get out if the market is not proving that you are right. This requires a different approach. You may need to scratch a lot of trades.

 Trade for extremely consistent gains with “Tiny” losses rather than for occasional “Home Runs” with a lot of “Small” losses


Nifty opened near previous day close.First bar acted as IR. Later IR extended and formed an envelop. BOF of IR low gave a long signal. TP at PDH.

Thursday, January 24, 2013


Missed both the major moves of the day. Attempted . two long trades. BPB and BOF of PDL. These trades did not move as expected.

Wednesday, January 23, 2013


Nifty Opened within previous day range. Made an IR. Did not attempt BPB of IRL as I noticed the LOL support of PDC/PDL. Finally it broke PDL. Did not give a pull back to PDL. Finally BOF of LOD gave a long signal which moved well

Tuesday, January 22, 2013


Nifty opened within previous day final range. BOF of PDH gave a short signal. Thought BRN will act as support. Shorted when the second push to PDH failed. TP at MSP.. Nifty broke MSP and gave a nice BPB signal with two topping tail bars. Nice move down. I was expecting some resistance at PDL.

Monday, January 21, 2013


Nifty opened near PDH and sold . First bar acted as IR. Went long on BOF of IR Low. Target the range high.Scratched the trade. BOF of PDC gave another long signal which moved well TP at BRN.

Friday, January 18, 2013


Nifty gaped up above PDH. A trend gap. Failed to break the highest high. Formed the initial range and made a cigarette pattern. Did not attempt to trade breakout as PDH and BRN were present as LOL. Went long on BOF of IRL/PDH. Scratched it later.


Learning to perform complex tasks requires a lot of training and deliberate practice. Some tasks could be so complex that it cannot be learned as “Whole”. Complexity of challenges may cause people to freeze or ignore the situation. This will lead to disasters.

The only way to learn such a complex task is to sub divide it into many manageable fragments and focus on these one by one. Remember how we learned to drive a car. We were taught to use the steering wheel, clutch, brake, gear and accelerator pedal. We were told to concentrate on the road, pay attention to the rear view and side mirrors. It was easy learning it one by one.

The real problem was integrating all these learning. We always forgot to depress the clutch while shifting gears and failed to reduce the accelerator while depressing clutch. The vehicle zigzagged when we shifted gears. It really took a lot of deliberate practice to learn the task and to achieve “Automaticity

Integration of all these focused learning is very important. Integration means to bring together. It is an act of combining or adding parts to make a unified ‘whole’. Integration is critical to success.

Integration is achieved by “ Unfocusing” . ‘Unfocusing’ is to stop focusing on a component and to concentrate on the ‘whole’ thing. We gain clarity of the whole of the situation. We are able to quickly make better decisions and perform the task as a ‘whole’

Knowing all about the DPs , trade setups, and all other concepts will not make us a successful trader. These are all individual components. The successful integration of these knowledge matters.

We cannot leave integration to chance. Integration does not happen by itself and needs constant attention and practice It is only when we learn to unfocus, to pull back and sense the ‘whole’, that we achieve the clarity we need to move ahead.

Thursday, January 17, 2013


Nifty Opened near PDC. BOF of PDC/PDL gave a long signal. TST of PDL was the second one. TP on BOF of previous high. Traded in a range for a while. BOF of range low gave another long which also moved well..Try to enter at DP and manage the trade with price flips.Price flips will help you to stay with the trend  avoid premature exits and skip wrong trades

Wednesday, January 16, 2013

@ Anurag


Nifty opened within previous day range. IR formed,MSP of previous day resisted. Short on FTC of IR high .TP when PDL gave support. Short when third attempt to go above IR Low /range high failed.This trade moved well

Tuesday, January 15, 2013


Nifty opened within previous day closing range. Traded in a tight range and made a cigarette. Got trapped in a downside break. Exited when price climbed back in to the range. Usually in a tight trading range, BOF of an extreme will cause the other extreme to break.Went long just above the FTA.PDH did not give any resistance

Monday, January 14, 2013


Nifty opened within previous day range.Formed a narrow IR. Missed the first up move. Went short on TST of PDH. Scratched the trade as it failed to move.. BPB of PDH gave a long signal and this moved well.

Friday, January 11, 2013

Number Puzzles

Do You like Number Puzzles ?

 I do. Have you seen  the Fido puzzle ? Nice one.I spent a lot of time to find out the "Rules" that made this thing work.But could not find out. Play it HERE.and come back. Just click on the guy in the lower right corner to continue through  each step.

How is it ? Amazing . Isn't it ?. If you know how it works, please let me know.Number guessing puzzles are fun and they amaze you and help you learn arithmetic.

But do you really  need such complicated calculations to find out the number you rounded off or imagined ?. It is obvious and right in front of the piece of paper. You need not spend a lot of time and effort to develop a software for this task. But some people do.

These people are called Traders. These guys  think they are wise, learned and intelligent.They do a lot of brain storming, research and  back testing to find out the numbers where they  can initiate their trades. In fact these price levels are very clear and obvious right in front of them on their charts.

We,traders,spent most of our time and energy to devise tools to identify the price levels where we can enter high probability trades.I wonder why we are doing it. Market itself is showing us the levels it respect.We do not believe the market. We do some silly calculations on it and find our own levels and expect the market to respect it.. Funny isn't it ?


Nifty gaped up  within previous day range and failed to go above PDH. Waited till the IIP announcement is over. First trade BPB of  Range low. Did not move as expected. Scratched.BOF of Range low gave another short. TP at PDL.. Did not attempt any other trade. You can find two Master Candles today. Second one gave us a good lesson.Do not forget to notice the first trouble area .

Thursday, January 10, 2013

Master Candle

The concept of “Master Candle” was introduced long back by a Forex Factory member called ” Furious Angel”. Later it was modified and popularized by “NickB”. He has written a small E book on the subject. The concept is very simple.

A Master Candle is created when price forms at least two succeeding candles (More the better) whose highs and lows stay within the first candle’s high and low. Core concept of the method is capturing a trend move, either a reversal or a continuation after a consolidation. Trade is initiated when the high/low of the master candle break, of course in the direction of the break. Ideal stop is on the other extreme of Master Candle.

The method was originally traded on higher time frames. But it will work well on all the time frames.

The initial enthusiasm on the method waned soon, as the traders were not able to trade it successfully. The problem was not with the concept but the method was wrongly used as the sole analysis to initiate trades. Traders tried to use it as a stand alone system. People were making the mistake of ignoring the location.

I have noticed, on many occasions, break out bar of a Decision Point will end up as a Master Candle. We will be confused and will not be able to decide whether it is going to be a BPB or a BOF. Knowing the concept of Master Candle will help us to deal with such situations.

Ideal stop loss is beyond the candle extreme. If the Master candle is a Wide Range Bar, a stop beyond the DP can be considered.

09012013 is a very good example of MC. Candle marked “A” is a MC .Notice how we could capture a good move down and avoid a wrong BOF trade.


Nifty gaped up within previous day range. FTC above DO gave a short signal. TP on gap closure. BOF of range low gave a long signal.and this moved to range high as expected.. TST short of range high moved well and broke Range low and BRN. BOF of PDL gave a long which also moved well.Last BOF of range high was also trade able. But I was having a long position and exited it

Ed Seykota on Trends

"Part of the problem you may be having in defining a trend is that trends do not exist.

Like the past and the future, a trend is merely an idea. There is no such thing in nature. Trend is an idea about the overall average historical direction of prices; trend is a convenient way to view history; trends do not indicate the direction of prices in the moment of now, or even exist in the moment of now.

Furthermore, The methods you use to define trend (to view history) are entirely up to you, so you get to define trend any way you wish; everyone may have a different idea of  the "trend".

Let's say you make a graph the volume of air in your lungs. If you define trend by the one-second average, your air volume trend may change several times per minute. If you define trend by a 90-day average, then your air volume trend may gradually increase for several decades and then decrease."

Ed Seykota

Wednesday, January 9, 2013


Nifty opened near PDC. The first bar acted as IR. TST of PDH gave a short signal.TP on FTC below 6020 level. Did not go long here as there was a strong flip zone above as FTA.As expected breakout of this level failed. and price fell to earlier low. Shorted below candle marked A. TP at PDL
@Akshay. This is situation no 3 in my yesterdays explanation.. Hope you noticed candle A and shorted below it. There are three situations where I enter on direct break of a level. As you know the first one is "Cigarette" The other two are work in progress. "Master Candle" and " Pressure Play.".Candle "A" is a Master Candle.

Tuesday, January 8, 2013


Nifty opened below PDL and attempt to go above it failed. IR formed. TST or PDL/PDC/IRH gave a short signal. TP at BRN. Went long on BOF of BRN/IRL. stopped out . BOF of LOD/BRN gave another signal to go long. This trade moved well,

Monday, January 7, 2013


Nifty opened near PDH and sold. IR formed. BOF of IRH gave a short signal. Se coned signal was a long trade BOF of IR low. This trade did not move. Nifty was forming a cigarette pattern within a 10 point range. Breakout of this range gave a good move.

Friday, January 4, 2013

Think Different

Trading requires a different thought process. Logical thinking process will not work well in solving trading related problems. A logical process requires a well defined existing knowledge base to build on. As far as trading is concerned most of the time this knowledge base is vague, irrational and ill defined.

Scientific methods also will not work well. Scientific methods of problem solving start with defining all the parameters of the problem in order to define the solution. This is simply not possible as there are too many variables

Trading requires a creative thinking process. We need to create new knowledge base and approach the problem differently than we have done before. This requires understanding the context, generating new insights and rationally analyzing the various options.

We need a solution based or solution focused thought process. Solution is really the starting point. Problem solving starts with a solution and then moves back to define enough of the parameters to optimize the path to the goal. In other words it starts with the goal or what is meant to be achieved instead of starting with a certain problem and trying to solve it.

You may call this a kind of reverse engineering. Decide upon the kind of move you want to capture and study those moves. You will be able to define enough variables that triggered those moves. Think rationally and apply a “Common Sense” filter on those and focus only on those which are really relevant.


Nifty opened within Previous day range and sold. Went short on BPB of PDL. Scratched the trade when it failed to extend beyond Breakout bar. BOF of PDL gave another short signal. another scratch trade. Even the BOF could not move price to LOD. Went long on the breakout of swing high with a stop below PDL.

Thursday, January 3, 2013


Nifty opened above PDH and sold. Moved within the previous day closing range the entire day. Went long on BOF of TRL/IRL and TST of PDL with stop below PDL. Did not take any other trade. Critical mass is long in the market. Tomorrow being week end if they decide to exit there can be a big fall.

Wednesday, January 2, 2013


Nifty gaped up above PDH. IR formed. Went long on FTC below IRL. . Next one was a short trade on BOF of IR High. This trade did not move as expected. Scratched it.

Tuesday, January 1, 2013


Nifty gaped up above PDH. Expectation was a channel move after the spike. But hesitated due to the Big Big BRN 6000. IR formed. FTC above BRN/IRH gave a short signal which did not move. Another BOF of this level also did not help. Finally stopped out of the trade.