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

Thursday, September 11, 2014

11092014


Nifty opened near PDC and moved up.PDH resisted and fell.Did not short as NS BRN was near. Shorted below NS BRN when price failed to move above PDC twice.TP near 8090 when second push failed. Price moved up in a channel. Could avoid the BOF short of BRN as I could identify the channel earlier. Long when price moved above PDL. TP when PDC resisted. No other trades.

37 comments:

  1. Hi ST

    Can the first short be taken as BOF PDC??

    Thanks
    TBP

    ReplyDelete
    Replies
    1. Yes. Price is getting rejected above PDC.
      Problem is you cannot expect much order flow from trapped traders

      ST

      Delete
  2. ST,
    Took two trades both failed ..
    http://tinypic.com/r/2yk1jxh/8


    Did not take the first short you take because i considered PDL as the range low.


    My Short 1 :- BOF of Range high
    My Short 2 :- BOF of BRN

    Please comment
    rgds
    Kishore

    ReplyDelete
    Replies
    1. Second one is OK. If we are not able to identify a channel it may happen
      First one is premature. Allow some consolidation after a selling climax to short again

      ST

      Delete
  3. Hi ST,

    Where was your SL for FTC trade?

    Thank you,
    Kiran.

    ReplyDelete
    Replies
    1. Treat it as a BO of 2 earlier swing lows . Exit if price move back above it
      Give some room say 5 points

      ST

      Delete
  4. Rajesh,

    I went long around 11:32 @8085 SL 8080 as I thought it would not go down any further taking it account that it was around 80 point drop and it has bounced back from low.

    Was my thinking correct ?

    Please do let me know.
    With kind regards,

    ReplyDelete
    Replies
    1. It is a BOF of LOD.
      You can safely go long with a small SL when a second push after a selling climax fails

      ST

      Delete
  5. Should we take the short after 14:00? Can you shed light on your thought process.
    How to anticipate and deal with premium as it varied from 20 to 40 today to note RN and BRN levels of nifty spot.

    ReplyDelete
    Replies
    1. I would have gone short if it was a BOF of PDC.
      There is no way to anticipate premium discount.

      ST

      Delete
  6. ST, I skipped the first trade as PDL was so close. The RR was also bad. So what was the rationale behind the trade?

    ReplyDelete
    Replies
    1. There will be potential barriers all the time. These are all make or break levels. Not brick walls
      We must be aware of these trouble areas and must be prepared for a bounce from these areas and should have a plan well ahead . That is all. We will never know for sure what will happen at PDC. Plan your trade
      I decided to short at 8118. If price bounce back I will exit at 8124. I pre accepted a risk of 6 points and executed. Luckily price moved well

      ST

      Delete
  7. On 10/09/14 below 12:45 bar, You took BOF trade. For me the move up to that point also looks like a slow up channel from 11:30 bar. Am I wrong?

    ReplyDelete
    Replies
    1. Theoretically Yes
      11.30 low was 8133 and the BOF range high 8142
      Should we look for a channel within a 9 point point?
      Price was trading within the IR. Better to focus on range extremes

      ST

      Delete
    2. Thanks. learnt Channel looking with range.

      Delete
  8. wats the link between 50 stocks, nifty spot, nifty futures and nifty options? i mean how once price movements or traders actions in one influence other?

    ReplyDelete
    Replies
    1. All these cannot be written in a comment reply.
      You can learn all these basics from
      http://www.nseindia.com/NP/nse_paathshaala.htm

      ST

      Delete
  9. About the first short trade, is my understanding correct that it was a FTC beyond PDC/PDH/RN 8150 because of 8120 level having 2 bounces both yesterday and today and both failed to move higher? Just trying to understand if yesterday's swing low 8120 was important in your consideration.

    ReplyDelete
    Replies
    1. We consider DPs as barriers which can hold or break. Here in the first trade PDC is the barrier. Price was not able to cross above PDC.If it cannot go up it has to fall till new buying emerges. Where it can happen? no body knows. It can be NSBRN,PDL,BRN or somewhere else. We act and manage it as per our reading. Core concept is simple. Acceptance and rejection of price at prominent levels. That time 8120 was NS BRN approximately

      ST

      Delete
  10. Hi ST,
    in case channel (as it happened in the aftnoon) where would we look for short? Thanks.

    ReplyDelete
    Replies
    1. Channel is a soft trend. Only thing is that it will not respect flips
      Treat it like any other trend which can accelerate or reverse

      ST

      Delete
    2. Nifty is channeling down now. Dont know whether it will reverse from BRN or accelerate down
      It may form a horizontal range within IRL and BRN

      ST

      Delete
    3. Thanks again ST. You have such clear perspective :) What made u think it could range between IRL and BRN?

      Delete
    4. Last impulse down may act as a range. A range between MSP and LOD
      Another thing is that Nifty spot is refusing to go below PDC. A BOF of PDC happened
      Then there was a retest. Trading the extremes can avoid chop

      ST

      Delete
    5. u take NS for only trade managament not for entries right? i think NS is just like a FTA.

      Delete
    6. Option strikes on Nifty spot will influence price move
      I do not trade these levels but use it for trade management.
      I avoid trading into them and use it for profit booking

      ST

      Delete
    7. Please see chart here http://imagizer.imageshack.com/img537/3927/hvCdoY.png Thick red line is PDC of spot, thin red line is PDC of futures. I am trying to understand what you meant by "Another thing is that Nifty spot is refusing to go below PDC" . When long is taken above purple arrow, Nifty spot is below PDC. I think I am getting lost somewhere, please help.

      Delete
    8. Very poor observation !!!!!
      Long was NOT taken where you marked.
      Entry was on break of that marked swing high which happened after 15 minutes
      PDC of NS is an important point Even NSE official chart marks it in Red and Green
      http://www.nseindia.com/index_nse.htm
      NSE takes the average closing as PDC instead of LTP. . So there will always be a slight difference

      ST

      Delete
    9. Hi ST,
      Thanks so much for your patience and I apologize for the confusion in my words. Please help. Here in this chart http://imagizer.imageshack.com/img903/1020/bCAySA.png i have further marked where we took our entry with a purple line ( above the purple arrow pivot.). Red arrow is position of NS Spot at the time of long entry I think....or am I totally in the woods? I never realised the significance of NF spot close etc. will observe it carefully again with the help of Bazaartrends chart. I tried icharts for this specific reason once back in June and at that time the folks at icharts were not able to help me with getting the NF spot chart. Thanks again for all your help.

      Delete
    10. When the order triggered NS was below its PDC, I agree.
      The problem is you are thinking too theoretical and ignoring the practical side of a trade entry.
      We are trading NF and we have to enter our orders on NF and not NS. So we need to find a NF level to feed our order
      After the first BOF of BRN NF went to 8104.80. Corresponding NS level was 8083.85 above 8082.65 which was PDC
      Now price goes down and another BOF of BRN happens. NS also move down and fails to break the early low.
      Now the logical place to go long is above the early swing high of NF. Earlier when price reached this level NS was above its PDC. So we assume this to happen again and enter our order. But when the order triggered NS was lagging. If you wait for the NS to cross, you may miss the trade or will only get a late entry
      http://screencast.com/t/pav9RnvAaX

      ST

      Delete
    11. Hi ST,
      Thank you so much for patiently explaining this to me. Thank you also for the beautiful chart.

      Delete
  11. Here is how to view NS chart within Nifty Future chart
    This will serve our purpose
    http://screencast.com/t/VHhmc6JM

    ST

    ReplyDelete
  12. u still use open interest and volume?

    ReplyDelete

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