There is a substantial risk of loss associated with trading Derivatives . Losses can and will occur. My methods will not ensure profits
Monday, January 6, 2014
06012014
Nifty gaped down within previous day range. First MC candle acted as IR. Skipped short below IR due to PDL and BRN. Short on BOF of DO/IRH. TP at PDL. Long on BOF of PDL on break of MSP. BRN 6200 of NS is strongly resisting
While marking IRH today, I left the long shadow and marked only the body at 6235 as IRH. Is it always safe to leave the long shadow while considering IRH/IRL?
The problem is you are trying to trade the patterns without considering the background information. You are taking counter trend trades and not considering the MSP. You are not considering SCORE.You are not considering Market Bias. Even if you get everything right, you may get stopped out. But rarely. Read about MSP and SCORE
Dear St, does it means that a counter trend bof should be traded only after a msp is broken. if we dont get a msp and price runs away then better to leave it. nirmal
Below IRL skipped shot.. but no buy over there?? May be i am woring,.. pls suggest. Let me know how to post screenshots... have some other questions as well.
Sir, Do you ignore the tails of the PDL and PDH candles, while drawing the DP lines on the next day? I think, yesterday's low was 6204. If we take 6204 as PDL, the space between IRL and PDL is 16 points.I need your guidance.
I took the BPB of IRL and had to exit without any profit.
Price action trading is not rule based trading. We have to take an appropriate decision processing all the available background information. Think about just one factor.Order flow.People have shorted 1.break of pivot low at 6230 2.Again short at the break of range low 3.Short on the break of Morning Low made Now where is the logical place for their stops ?Early shorts are trailing their stops.Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops Later Nifty made lower highs and traders trailed. Finally it was above the swing high marked MSP and I went long on break of this point.The entire Green WRB was just stops getting triggered.
There is no guarantee that a break of MSP will lead to a reversal BOF can happen in case of MSP also. That is what Dave had mentioned in his post
Most of the short term traders enter on break of a swing pivot. When three or for swing pivots break in a particular direction,we can safely assume critical mass. The concept will only work when the day trading crowd is in control. It will not work during the euphoric buying from retailers and when FIIs are on a shopping spree
I am not a fan of direct breakouts . I rarely trade it unless it is a PP or into a fluid. There was a long signal at the BOF of IRL. I did not take it because. It was counter trend and no space above it. FTA was 6230 which was a BRN of NS 6200. Above it DO and IRH, if you ignore tails
I generally ignore the tails. Most of the time tails could be because of one or two freak trades.Tails are very tricky. We will never know where exactly are the orders.
While dealing with immediate levels consider tails. For example todays first candle.If you decide to short below the IRL, it is not wise to ignore the tail and short below the low of the bodies of first two candles because all the stops will be below the tails only. Later price confirmed the low of the candles as IRL when this level acted as a flip on pull back. Same level acted as a resistance in the afternoon session.
Losses are unavoidable in this business. Be ready to pay a substantial amount as tuition fee.But I can tell you It will be much less than any other method with DP trading
Thanks a lot for your detailed reply on the locations, where the shorts have been made and the probable Stop loss areas for these shorts. You have entered exactly at the point, where the stops of all these shorts get triggered. It is a very very valuable lesson in the new Year on how to follow the order flow.
Sir, You shorted after Pin bar and BOF of DO/IRH .What made you short at your Arrow marked bar?It was a long tail bar and did not close below BOF PIN bar.Why did not you wait to short below BOF PIN bar.Should DH be the ideal SL? Thanks, Dushmant
Sir, Thanks for your guidance. My experience with other methods of trading, where I had to keep 20 points as SL, had really inflicted some damage on my Account.I dumped them on time for good.
With DP trading, even during learning stages, I am able to maintain my account without any loss or gain. This itself is an achievement for me.
As I know more and more about DP trading, it can only get better and better.
All these things are possible, because of you only Sir,
We are entering the break of a level.Here I have shorted the break of the BO bar low as BOF. Next bar after the pin bar was a green bar and did not break the low of pin bar. I placed a SL limit sell order below it . Next bar triggered the trade. You need not wait for the trigger bar to close. For example take todays long trade. Should we wait for the bar to close to go long above MSP ?
Why should we risk more. Once price breaks above the BOF bar your calculation is wrong and just exit
Excellent comment on location of stops. Thanks a lot for the reply. Indeed a great learning as to how quickly trader mentality changes and how swift things have to be.
If you avoid Hopping and Hoping from your trading, half the battle is won.
There are four outcomes for any trade 1.Big loss 2.Small loss 3.Small win 4.Big win Small wins will take care of your small losses. Then you avoid big losses and retain your big wins.
We will never know where the orders are resting.See how the momentum up move of the day bounced back as if it hit some brick wall. There are resting orders near BRN 6200 of NS Ie between 6230-6235 of NF
Dear St, thanks a lot for your reply. with your methods I am improving a lot. previously I was only loosing and now at par. and "Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops" if I understand then this is bof of IRH bar . Am I correct. Thanks. Nirmal
Nirmal I have written clearly "Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops"
How can a bar which attempted to go above IRL become BOF bar of IRH? Price after breaking the IRL to the downside attempted to go above the level and got rejected forming a pin bar at 13.30. Most of the stops are above this bar at that time.
Thank you for sharing one of the most pragmatic ways of the trading way of thinking.
I have also bought the YTC program and in conjunction with DP hope to be a better trader. At least as of now I have come to a no win -no lose situation.
When you mention trend, i suppose you mean within our trading T/F?
Thank you once again and I look forward to interacting and learning more from you. Best Regards
I trade 3M chart and never look at other time frames. I prefer to use the word "Bias" to "Trend"
Nobody will wake up as a profitable trader one fine morning. It will be a gradual progression. 1.Your losses will come down 2.you will breakeven without brokerage 3.Will breakeven after accounting costs 4.Start making small profits 5.Will start trusting the method 6.Your psychological issues start disappearng.............
Hi ST,
ReplyDeleteWhile marking IRH today, I left the long shadow and marked only the body at 6235 as IRH. Is it always safe to leave the long shadow while considering IRH/IRL?
Thanks,
TBP
Dear ST,
ReplyDeleteI tried entries at 1.45 bof of day low and 2.24 bar bof of day low and skipped third entry made by you. How can I improve . Please suggest
Thanks,
Nirmal
TBP
ReplyDeleteNormally I ignore the tails.
Most of the time it works. I wont say it is ALWAYS safe.
ST
Nirmal
ReplyDeleteThe problem is you are trying to trade the patterns without considering the background information.
You are taking counter trend trades and not considering the MSP. You are not considering SCORE.You are not considering Market Bias.
Even if you get everything right, you may get stopped out. But rarely.
Read about MSP and SCORE
ST
Dear St,
ReplyDeletedoes it means that a counter trend bof should be traded only after a msp is broken. if we dont get a msp and price runs away then better to leave it.
nirmal
Hi Sir,
ReplyDeleteWhy skipped "Skipped short below IR due to PDL and BRN".. as there is 20 points gap???
Thanks,
Mahesh
Mahesh
ReplyDeleteIRL to PDL was 10 points
ST
HI Sir,
ReplyDeleteThanks for your reply..
Below IRL skipped shot.. but no buy over there??
May be i am woring,.. pls suggest.
Let me know how to post screenshots... have some other questions as well.
Once again thanks for your info and suggestions.
Thanks,
Mahesh
Sir,
ReplyDeleteDo you ignore the tails of the PDL and PDH candles, while drawing the DP lines on the next day? I think, yesterday's low was 6204. If we take 6204 as PDL, the space between IRL and PDL is 16 points.I need your guidance.
I took the BPB of IRL and had to exit without any profit.
S.Karthikeyan
Nirmal
ReplyDeletePrice action trading is not rule based trading. We have to take an appropriate decision processing all the available background information.
Think about just one factor.Order flow.People have shorted
1.break of pivot low at 6230
2.Again short at the break of range low
3.Short on the break of Morning Low made
Now where is the logical place for their stops ?Early shorts are trailing their stops.Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops
Later Nifty made lower highs and traders trailed. Finally it was above the swing high marked MSP and I went long on break of this point.The entire Green WRB was just stops getting triggered.
There is no guarantee that a break of MSP will lead to a reversal BOF can happen in case of MSP also. That is what Dave had mentioned in his post
ST
Awesome explanation, thank you ST. ST will you please explain critical mass with an example ?
DeleteS Roy
DeleteMost of the short term traders enter on break of a swing pivot. When three or for swing pivots break in a particular direction,we can safely assume critical mass. The concept will only work when the day trading crowd is in control. It will not work during the euphoric buying from retailers and when FIIs are on a shopping spree
ST
Dear ST,
DeleteThank you so much, I truly appreciate the help you have been giving me, thanks a LOT.
Mahesh
ReplyDeleteI am not a fan of direct breakouts . I rarely trade it unless it is a PP or into a fluid.
There was a long signal at the BOF of IRL. I did not take it because.
It was counter trend and no space above it. FTA was 6230 which was a BRN of NS 6200. Above it DO and IRH, if you ignore tails
ST
KS
ReplyDeleteI generally ignore the tails. Most of the time tails could be because of one or two freak trades.Tails are very tricky. We will never know where exactly are the orders.
While dealing with immediate levels consider tails. For example todays first candle.If you decide to short below the IRL, it is not wise to ignore the tail and short below the low of the bodies of first two candles because all the stops will be below the tails only.
Later price confirmed the low of the candles as IRL when this level acted as a flip on pull back. Same level acted as a resistance in the afternoon session.
Losses are unavoidable in this business. Be ready to pay a substantial amount as tuition fee.But I can tell you It will be much less than any other method with DP trading
ST
Sir,
ReplyDeleteThanks a lot for your detailed reply on the locations, where the shorts have been made and the probable Stop loss areas for these shorts. You have entered exactly at the point, where the stops of all these shorts get triggered.
It is a very very valuable lesson in the new Year on how to follow the order flow.
S.Karthikeyan
Sir,
ReplyDeleteYou shorted after Pin bar and BOF of DO/IRH .What made you short at your Arrow marked bar?It was a long tail bar and did not close below BOF PIN bar.Why did not you wait to short below BOF PIN bar.Should DH be the ideal SL?
Thanks,
Dushmant
ReplyDeleteSir,
Thanks for your guidance. My experience with other methods of trading, where I had to keep 20 points as SL, had really inflicted some damage on my Account.I dumped them on time for good.
With DP trading, even during learning stages, I am able to maintain my account without any loss or gain. This itself is an achievement for me.
As I know more and more about DP trading, it can only get better and better.
All these things are possible, because of you only Sir,
S.Karthikeyan
Dushmant
ReplyDeleteWe are entering the break of a level.Here I have shorted the break of the BO bar low as BOF.
Next bar after the pin bar was a green bar and did not break the low of pin bar. I placed a SL limit sell order below it . Next bar triggered the trade.
You need not wait for the trigger bar to close. For example take todays long trade. Should we wait for the bar to close to go long above MSP ?
Why should we risk more. Once price breaks above the BOF bar your calculation is wrong and just exit
ST
Hi ST,
ReplyDeleteExcellent comment on location of stops.
Thanks a lot for the reply.
Indeed a great learning as to how quickly trader mentality changes and how swift things have to be.
Thanks once again.
And thanks to Nirmal for the great question
TBP
KS
ReplyDeleteIf you avoid Hopping and Hoping from your trading, half the battle is won.
There are four outcomes for any trade
1.Big loss
2.Small loss
3.Small win
4.Big win
Small wins will take care of your small losses. Then you avoid big losses and retain your big wins.
That is the art and science of trading
ST
TBP
ReplyDeleteWe will never know where the orders are resting.See how the momentum up move of the day bounced back as if it hit some brick wall. There are resting orders near BRN 6200 of NS
Ie between 6230-6235 of NF
ST
Dear St,
ReplyDeletethanks a lot for your reply. with your methods I am improving a lot.
previously I was only loosing and now at par. and "Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops" if I understand then this is bof of IRH bar . Am I correct.
Thanks.
Nirmal
Thank you Sir for sharing your wisdom.
ReplyDeleteS.Karthikeyan
St sir,
ReplyDeleteor you mean to say 1.20 bar
thanks
Nirmal
ReplyDeleteI have written clearly
"Most of the stops will be above the pin bar which attempted to go above IRL and failed. Both your longs failed to trigger these stops"
How can a bar which attempted to go above IRL become BOF bar of IRH?
Price after breaking the IRL to the downside attempted to go above the level and got rejected forming a pin bar at 13.30. Most of the stops are above this bar at that time.
ST
Sir,
ReplyDeleteFirst trade was BPB of IRL was eyeing 15 points till PDL and BRN ,got burnt.
Second trade was same as yours.
For your second trade, I don't have any regret of not recognizing or trading it because I know it is fully reserved for you.
Thanks and God bless you.
Arvind
Thanks St,
ReplyDeletenow got the point. Thanks a lot
Sir how it can be known of Order flow.People have shorted ,kindly update thnx
ReplyDeleteDear ST,
ReplyDeleteThank you for sharing one of the most pragmatic ways of the trading way of thinking.
I have also bought the YTC program and in conjunction with DP hope to be a better trader. At least as of now I have come to a no win -no lose situation.
When you mention trend, i suppose you mean within our trading T/F?
Thank you once again and I look forward to interacting and learning more from you.
Best Regards
Amber
ReplyDeletePeople normally enter on breakout of pivots
ST
Chandiok
ReplyDeleteI trade 3M chart and never look at other time frames. I prefer to use the word "Bias" to "Trend"
Nobody will wake up as a profitable trader one fine morning. It will be a gradual progression.
1.Your losses will come down
2.you will breakeven without brokerage
3.Will breakeven after accounting costs
4.Start making small profits
5.Will start trusting the method
6.Your psychological issues start disappearng.............
95% will flirt to something else before that
ST
Thank You ST!
ReplyDeleteWill keep coming back for hand holding.