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

Wednesday, May 15, 2013

15052013

Type one trend day. Nifty opened within previous day range. Long on BPB of  PDH above the Master Candle High. .Hope you enjoyed the ride

Tuesday, May 14, 2013

14052013

Nifty opened  within previous day range. BOF of PDL was a long opportunity. But hesitated to take the trade as BRN and IRH were too close. Finally went long on BPB of BRN on the break of IRH. Missed the down move as I could not find the entry points comfortable. Another long on BOF of BRN.on break of MC. This trade gave a quick 20 points.

Monday, May 13, 2013

13052013

Nifty opened above BRN and sold.. IR formed. Missed the BOF short of BRN as I could not find a reliable level to enter. BPB of IRL gave a short signal. Covered at BRN 6000.. Type one trend day.

Sunday, May 12, 2013

Pressure Plays

I rarely trade direct breakouts. Most of the breakouts fail and trap traders. Do not try to trade direct breaks blindly, unless you know what you are doing. Altogether avoiding breakout trades is not advisable as we will be missing many low risk high reward opportunities.

Is there a way to know which BO is going to work and which one is going to fail? No . But we can identify some high probability setups if we think order flow. These setups are called “Pressure Plays”. Pay attention to some background information before attempting these kinds of trades.

Ensure order accumulation at the BO level. Market may need to consolidate for a while for this to happen.
Who is in control of the market?  Never attempt a counter trend breakout on a trend day where investors and higher time frame traders are in control.
Notice how the critical mass is positioned. If the breakout traps them, well and good.
How far is the FTA and how strong it is? Ensure some space is there for the trade to move.
An explosive breakout happens when four significant scenarios happen at the same time.
  • Many traders perceive a potential break and enter in anticipation.
  • Breakout traps critical mass and they scramble to exit
  • The level should be very obvious to attract breakout traders
  • Ideally breakout should take the price to a level where another set of Stop Loss orders exist, setting a chain reaction.
Good Pressure Plays seldom pullback to the breakout level. Play with a very tight stop loss just beyond this potential flip zone.

Notice the 2 trades of 10052013.Both of them are Pressure plays. I marked  them  as BOF as a BOF preceded these breakouts and the concept of Pressure Plays was not explained earlier.BOF + Pressure Play, very high probability trades.

Friday, May 10, 2013

10052013

Nifty opened within previous day range. IR formed. Went short on the LOL BOF of PDH/IRH.. Covered when the break of IRL/DO failed. Long on break of PDC which acted as a tight trading range high. TP at BRN 6100. Rest of the day Nifty formed a Barbed Wire around BRN

Thursday, May 9, 2013

09052013

Nifty opened within previous day range. IR formed. Went short on BPB of IRL. This trade did not move. Scratched at a small profit. Could not get any reliable signal to go long and missed the up move. Short on BOF of IRH/HOD. Market scared me and I was thinking about exiting. But as the earlier directional moves of the day were Channels, I  decided not to scratch and was lucky to capture a good move