Nifty opened just below PDC. First candle was a MC . It acted as IR. Market was expecting too much from the new RBI governor.and got sold immediately after announcement BOF of IRH/PDC gave a short signal. Short below IRL. TP on gap closure. BOF of LOD gave another trade. TP at BRN 6000. did not attempt any other trade.
In first trade your short below IRL. Space is not in favour. Because BRN & PDL was very near and even it was an announcement day. Is there any other reason for this trade?
ReplyDeleteAdhi
ReplyDeleteIn reality it was not a signal based trade at all even though there were signals to go short.
It was taking advantage of the panic of positional longs in the market
After the gap up and run the previous day, market was very vulnerable. It was waiting for the RBI announcement. Market was expecting too much from RBI and discounted it much earlier.
Now there are three possibilities with respect to the announcement.
1.Below expectation- sell off
2.As per expectation-Profit booking
3.Exceeds expectation-Further Rally
Probability of a sell off was much much more than a rally.We are betting on the order flow of higher time frame players who never care about Our DPs
Finally what was the risk ? If it bounces back to the range exit quickly with less than 10 points loss.We must learn to act fast
For example think about the people who have gone long on the break of IRH. Market gave them 3 minutes to correct their mistake, trading inside the range before the sell off I will bet 99% of them did not exit and got trapped suffering 100+ point loss
ST
I was also waiting for market to crack and so waited for a pullback after the break of IRL but that never came in time for me to trade.
ReplyDeleteAnon
ReplyDeleteWaiting for a pull back wont work in such explosive moves.Sometimes you may not be able to get a fill for your orders
ST
Do you keep track of the news before and during the trading hours? Normally, I notice that I develop a positive or negative bias based on the news and that impacts my trading. Your thought pls?
ReplyDeleteDo you have these 3 minute daily charts of the previous previod (without your markings)? That will help us in practing your method and then check your markings.
ReplyDeleteHow do you avoid the fake breakouts? In what cases you decide to take the breakout of IRH and sometimes, you decide to play BPB after the IRH breakout? Else, I end up entering these fake breakouts and lose money. Looking forward to your guidance!
ReplyDeleteAnon
ReplyDeleteI do not keep track of news during trading hours. But I keep track of major announcements and avoid a position
I do not have historical charts. If you are an Icharts subscriber , you can view it
I rarely trade direct breakouts of levels. I prefer BOF and BPB. Many factors contribute to the success of breakout some are
1.Market bias favourable
2.Accumulation of stops at the level
3.BOf at the other end trapping traders
4.other factors like space, order flow, critical mass, risk, etc
ST