Absorption

This is an interesting pattern that can occur in Nifty Futures frequently. This is a game played by Big money to trap the retail traders. They can be some institutions or some HNI cartels.Whoever they are, be very careful when you see this pattern or slightly different variations..

Nifty gaped up above the previous day high and printed two bullish candles which closed at the extreme. The sentiment was extremely bullish.Next two candles were reversal candles with topping tails. Traders thought it was a normal pullback and bought aggressively.For the next one hour NF traded at the area forming an ascending triangle with higher lows. Everybody expected a breakout to new highs

Big sell orders were sitting above this level and all the buying was getting absorbed quietly. After a while Bulls started panicking and started to exit bringing the market down.Who ever played this game made lorry loads of money for sure.

At this time NF was trading at a hefty premium . This gave the sellers more confidence . Even if spot Nifty goes up there was enough "Crumble Space" to absorb and minimize the impact.

Pay attention to absorption  and play the right side of the market

29022012

Nifty gaped up above PDH and printed 2 bull candles. Naturally the bias was for an up move after a pull back.Most of the people might have bought the pull back. Those who went long at the pullback will be stopped out and they will also miss the FTC short trade. The other 4 opportunities were good.

Notice how  the price respects  the prominent levels like PDH,PDC, DO etc.

Aya Ram Gaya Ram

Every one who is familiar with Indian politics might have heard  this term "Aya Ram Gaya Ram".
It was Haryana which gifted this usage to us when then Hassanpur MLA Gaya Lal changed parties three times in a day in 1967. Mr Gaya Lals's feat was immortalized in the phrase " Aya Ram, Gaya Ram."and is regularly used to denote defection and horse trading by politicians.

But for us, the Traders, Gaya Lal is a role model. Watching  the developments without any bias and joining  the winning team  without hesitation is one of the "Must Have" character  of a winning trader.Anything can happen in Markets at any time. It is disastrous to approach and trade the markets with a bias.

We are not permabulls or permabears . We are with the winning team. We sit on the fence until the bias is clear and join the winners.

Defection is not a bad thing in Trading.

Thank God. The Anti Defection Bill is not applicable to traders.

28022012

Nifty Gaped up above the previous pivot high . Expectation is move inside the previous day range. BOP of previous day pivot high gave a long. There were no significant levels within the move. First trade gave good profit. Second BOF also gave some profit. I expected a sell off after the DT, HOD breakout failure which was also around the Friday bottom and PDO.A breakeven trade
I wonder why Nifty is trading at such a high premium.

27022012

Market opened within previous day range . First candle itself is a breakout candle of PDL. A major transition to outside day. trading below PDL, DO, PDC. Trade the trend. Avoid temptation to go CT. There were two BOF . But if you notice the First Trouble Area., it is too close . Even if one attempted the second one. there was enough time to exit without a loss.
There were no major decision points on the way down except a BRN which did not hold.

Very very difficult to ride the trend till end. Most of us will be shaken out by a pull back



 

The Chinese Bamboo

Self Evident Truths

Self evident truths are propositions that don't need proof. It is a basic assumption upon which further ideas are built. Something so basic that it should not need defining or explaining. In trading also there are some self evident truths that nobody dares to question.

Once the great Aristotle said women have less teeth than men.No body questioned the validity for a long time because for them  theory-not experience-was the source of truth,

Most of the traders do multiple time frame analysis .Some of them run multiple charts on different monitors and their trading desks reminds me of the  Space Shuttle control room of NASA.

So far I have not felt the necessity of looking at charts other than my trading time frame. Actually smaller time frames show much more detail. Everything evident on a higher time frame is visible on a lower time frame much more prominently and much early.

In fact, I would have gone down to much lower time frames, but the problem is my mediocre brain cant process so fast.

I may need some RAM upgrade

My opinion is purely a day trader’s perspective. Swing and  Position trading are different ball games

24022012

An Inside day . Expectation of a range bound market.FTC gave a short signal.Move ended only at PDC and DB. BOF gave a CT long. Then market moved in a range and gave a with the trend BOF signal.. Last BOF signal at PDL, LOD also gave some profit.Never attempt a CT at the location marked by red arrow.. Once a breakout of a range fails most of the time it will break out the other extreme. Those who traded  the high probability locations made good money today.

Some days you are the wind shield and another day you are the bug.

23022012

Not a good day.. First trade was a short when price failed to go up above PDC. Market tested the patience and one could have TP at Gap fill area. The down move ended at some odd level.

The 1PB was not trade able as there were many resistances above it. BOF at PDL trapped many, Market would not have gone above HOD . It happened only because of the order flow of trapped traders at PDL exiting.

This created another trap BPB above HOD. So two failed trades. Most of us will miss the last one.Our focus will be on exiting the third trade

Failure of the break out failure is a good setup in the original trend direction

22022012

Nifty opened around yesterdays level and failed to go up.. FTC at PDH and DT area was a short signal. TP at PDL.. Market gave a long CT trade at PDL. One could have made a small profit only because of the location strength.Very difficult to take a short at  the third trade location because everybody will anticipate a range between PDL and PDH. Those who have taken this signal minted money. Now have a look at the NIFTY spot chart below

Some fast and furious moves originates from Big Round Numbers of spot Nifty

Chicken Sexing

The book that influenced my trading most  is not a book on trading.

It  is not a book actually, but a small  research  paper on skill development This will  give you some insights into the trader development process.


The Art of Chicken Sexing : Richard Horsey

Expert chick sexers are able to quickly and reliably determine the sex of day-oldchicks on the basis of very subtle perceptual cues. They claim that in many cases they have no idea how they make their decisions. They just look at the rear end of a chick, and ‘see’ that it is either male or female. This is somewhat reminiscent of those expert chess players, often cited in the psychological literature, who can just ‘see’ what the next move should be; similar claims have been made for expert wine tasters and experts at medical diagnosis. All of these skills are hard-earned and not accessible to introspection.

But is there really anything unusual about the chicken sexer, the chess grand master, the wine buff or the medical expert? I argue that there is not. In fact, we are all constantly making categorizations of this sort: we are highly accurate at categorizing natural kinds, substances, artefacts, and so on. We do so quickly and subconsciously, and the process is completely inaccessible to introspection. The question is, why is it so difficult to acquire skills such as chicken sexing, when we automatically acquire the ability to categorize other objects. In this paper, I argue that we have mechanisms for learning the cues necessary for categorization, but that these mechanisms require selective attention to be given to the relevant features. We automatically acquire the ability to categorize certain objects because we have inbuilt attention directors causing us to attend to diagnostic cues. In cases such as chicken sexing, where we do not automatically develop categorization abilities, our inbuilt attention directors do not cause us to attend to diagnostic cues, and our attention therefore has to be drawn to these cues in another way, such as through training.

Click here to read the rest

21022012

There was some problem with data feed during market open it seems.One could have taken trade 1 as a continuation of yesterdays move. But the first bar spoilt everything . Second trade was a disaster. Third one the retest of a broken support  ended exactly at the FTA.. Fourth one was a good trade when the second attempt to go down failed to continue.Last BOF did not move, a breakeven trade,
Tomorrow If the market opens around today's close ,5600-5630 may act as a range


Trade the price levels not patterns.

How to Learn Day Trading

If you are ready to take a little effort, you can learn it really fast.

I assume you have some basic knowledge.

First thing you have to do is selecting your time frame. If you cant stand the Formula 1 speed of 1M chart select 3M or 5M.

Now decide how many points of Nifty you need to capture. If it is 10 add another 5 points for commission and slippage. So you may need minimum 15 point move.

Next step is to open your historical chart. Mark all the 15 points or above moves on this chart. Note down or better mark on the chart the following

1. Location from where the move started ( HOD, LOD. PDH etc.}

2. Location where the move ended

3. Locations where the move paused

4. Notice and note down the pattern which triggered the move (BOF, TST, BPB etc)

5. Mark where you could have entered with the least risk. With a minimum RR of 1:1

6. Decide on your high probability patterns and high probability locations

Do it at least on 100 charts. The more the better.

Now go live with Mini Nifty. Stick to your locations and patterns. When in doubt stay out. Don’t chase. Maintain strict discipline. Slow and steady will win the race.

Don’t worry if you cannot invent  You can always do Reverse Engineering

Food For Thought

Look at the above picture. You might have seen this pattern many times.

Market is in a bull trend. It pull backs and makes a low at point A. Afterwards it goes up and later returns to the same price level and print a beautiful pin bar.

As a trader what will be your action in this area?

Some possibilities are

1.You will keep a stop loss order just below point A if you are holding long position

2.You will sell just below point A expecting a breakout to the down side

3.You will go long above the pin bar with a stop loss below the candle

Will you buy at the circled area?  Who bought there? Who absorbed both stop loss selling and breakout selling?  Why?

 Please let me know .

Clash of the Titans

A mistake many Nifty Future traders make is that they forget that they are trading a derivative. Many fail to monitor the Nifty spot Index level. We pay attention to Big Round Numbers on NF but fail to notice BRN on the underlying. If NF stalls at an unexpected area always have a look at nifty spot. Most probably it may be approaching  some crucial area

Big players will be  having huge option exposures,As you know strike prices are in multiples of hundred . They will fight out tooth and nail to defend their territory. Fierce battles are always fought around these strike prices.


Trade very carefully around these areas,especially on expiry days . There is very high probability of getting  whipsawed a lot, if you are playing for ten  and fifteen points

I feel ,generally Nifty moves in swings of 20 points. NF levels may vary a little as per market sentiment because of the premium or discount component. . In my experience 3 minute charts are ideal to capture 20 point swings. 5 Minutes are also good .Higher time frames are useless and 1M is too fast for me.  Majority of the traders are using 5M charts. I prefer 3M because it gives early signals than the 5M

  

I will always allow  the majority to enter after me and take my position to profit

17022012

Not a good day for my methods Market gave four opportunities. Three trend trades and one counter trend. Three trend trades made no money . Could not take the CT trade as I was holding a long position and was worried where to exit. At least I made my broker happy
Next week need to attend office. Anyway I will analyse and post my ideal trades.

Data Packets

Markets are dual auction processes which produce continuous stream of data. Human mind is not capable of absorbing and  assimilating this streaming data in real time. Hence we chop this continuous data into small pieces and make convenient packets. Then we make a visual representation of these data packets with the help of our charting programs .

Imagine a soap factory . Mixed chemicals are pumped  to the production line for molding. After molding ,each soap is packed . Further ,five of them are bundled together. A dozen of these bundles are then packed in a card board carton..Six cartons makes a stack. These stacks are transported five at a time and loaded to a truck waiting outside. A shipment container  can accommodate 12 truck loads.of 20 stacks.. The idea is clear I think.

As a retail user I do not need cartons or containers

I salute the good old tape readers.

16022012

Market gaped down within previous days range. First bar of the day was a mid close bar which acted as a one bar range. BOF of this range gave the first opportunity, Nifty gave us another opportunity when a BOF  happened near Big Round Number 5500.Third entry was not at all comfortable as there were too much of traffic to the left. fourth BOF at HOD was a disaster. Nifty traded all over the place except the first trend

Avoid Traffic . Love the extremes

Trading for a Living

Is it possible for me to trade for a living ?

Statistics says very few can do it. Derivatives are weapons of mass destruction and 95% of the people erode their capital and go broke within a few months. Can I survive in this jungle ?

Before deciding to make such a move. I have to think about my current financial status. Where do I stand now and what are the chances of my survival.

Both of us , me and my wife. are working and our monthly income is around Rs 80000/-. Both of us contributing almost equally. . I have completed the required service for VRS and expect to get a pension of Rs 20000/- per month.

We have built our own house and do not have much debt on it.Major expense in the near future is for my daughters education and marriage which I have to provide irrespective of my profession,.

So survival is not a problem at all. Even if I don't make any income trading for another year nothing will happen.Only thing I have to do is to protect my capital during the learning curve.

I will be happy If I can make Rs 40000/- per month which I am currently getting as salary, I want to concentrate on a single market, Single Instrument and a single time frame. ie 3 minute charts of Nifty Futures.

In order to prevent over trading and limit my trades to quality swing able setups I have limited my maximum trades as 4. Maximum loss per day allowed is 2R (R=Risk)
Let us do some calculation
No trading days in a month =20
Average Profit per day        = 40000/20=2000
I plan to take position with 4 nifty lots ie 200 nos
Net Points to be captured a day 2000/200=10
Generally My entry is within 10 points of risk , so Risk =200*10=2000 on a trade.
Never want to risk more than half a % of my capital.
So I may  need  2000*200= Rs 400000/-
Maximum Loss a day is 4000 ie 1% of capital
I need to capture  10  nifty points a day to live

Can I do this ?              

Let me shout                                              
YES, I  CAN

15022012

Today is a text book spike and channel day.. Nifty gaped up above PDH . First candle was a trend candle followed by a reversal signal bar which failed. A low risk entry .One could have held this long till the TL break.Retest of the top gave a short signal. Second push down failed and gave a long signal..

Never attempt counter trend trades on a strong trend day like this.

Bucking the Trend

When I did a postmortem of my losing trades, I was surprised to see that most of them were counter trend trades. Why has one of the most effective trading techniques fallen by the wayside?

"Trend is your friend" is the first rule I learned when I started this journey. Since then I might have read it thousands of times. Why I am disregarding this old rule and lately  trying to trade counter trend and lose money.

Nothing I know about trading is more effective than trading in the same direction the market is moving. Still I do the opposite many times. Is it because counter trend setups looks more juicy and with the trend set ups looks difficult? I don’t know.

Once the market establishes direction, it generally maintains that direction for a period of time.

 There is really no need to buck the trend.

Waypoints

Waypoints are sets of coordinates that identify a point in physical space. Waypoints have  become widespread for navigational use by the layman since the development of advanced navigational systems, such as GPS.

In olden times also people traveled using reference points. Traditionally these have been associated with distinctive features of the real world, such as rock formations, Rivers, Mountains etc.Later on artificial reference points such as Buoys, Light Houses,Radio Beacons Sign boards were created to aid navigation.

In order to navigate the chart space  traders also use some reference points. If we are not aware of these reference points we will not be able to trade successfully.. It is a fact that big money traders move the market on a day to day basis especially in small time frames. They are creatures of habit and they react to these reference points in the same way again and again.

Pay attention to waypoints such as PDL,PDH,PDC,DO,HOD,LOD,DT.DB etc.

If you want to win, swim with  the sharks and hunt with the hounds.

14022012

Always try to catch the first move of the day..If we are attempting only good setups like BOF, BPB at major trader decisions points we will never lose much . Even if the trade is not working we will be able to get out at breakeven or a small profit.example trade 2 and 3
Always be aware of the FTA. For trade 1 there is a very high probability that the move may stall at PDC which is also a Gap closure area.FTA is the location where you may encounter an opposing order flow. FTA is the first target of the trade..

Think Location, Location. Location

13022012

There were three trade able  breakout failures today.. Every price action trader might  have booked profits at the circled area. Some might have gone short here.A failed FBO trapped many bears at the boxed area and fueled further rally .
Limit the trades to high probability set ups at major decision points

Execution

I am not an expert in trading. I do make mistakes all the time.

In fact, there are no experts in trading. If somebody claims to be an expert in this field, he is a fraud. There are many people who are much more skilled and experienced than you or me. Skill and experience makes one consistently profitable.

Most of the traders are well aware of many profitable patterns and setups, still they fail to make money. why?

You may be having a trading plan with a proven edge. Still you fail. Why?

Knowing the patterns and having a trading plan is not enough. It is all about execution of your plan. It is a lot harder than most people think. When we see a setup that fits our rules we have to take it. Most of us are discretionary traders, so we have to think about our entries and exits. But when we see them, we have to take them whether the trade works or not.

If you freeze and you are not able to pull the trigger at the right time, you are not going to win in this game.

Execute or be executed. Believe and achieve...or doubt and die

Opening Price

As a general rule the opening price for the day will either be the high or low for the day at least 50% of the time.

If the market opens above the previous days close, the bias is bullish .So if it  is trading above the opening price level of the day, it is potentially going up.

If the market opens below the previous days close, the bias is bearish. So if it is trading below  the opening price level of the day, it is potentially going down.

Always be aware  where the market is in relationship to the open.If the price action goes below the open adopt a negative stance and  if the market goes above the open  adopt a positive stance.This approach is very simple but it is also very effective as an indicator to have you thinking in the right direction.

A lot of volume will be generated in the first few  minutes of the market opening based on the price action during this period.For every new position there will be an equal amount in the opposite direction. Someone has to be wrong, so what tends to happen is that if the market was for instance going down after the open, and reverses back up through the open, the traders who are short will reverse position. If the price action continued to go down the buyers will quit (by selling) and force the price to go lower.

Derivative markets move in  self feeding  loops

Trading and Investing

"When a trade goes bad it becomes Investment"

In reality trading and investing are the same.Actually there is no difference between the two as far as our intention is to profit from the rise or fall in price of a  security.

Investors are those who wish to become a part owner of the company and who wants to control the management of the company.

If your intention is to profit from the price move of the security, you are a Trader. Time frame of the trade and the tools used to make the analysis of  price can be different. Some use Fundamental analysis others technical indicators or charts of different time frames. Some stay in the trade for a few seconds only and some others stay for months.


Surprisingly  when one talks about trading , the person sounds irresponsible and labelled as a gambler although he may be a great risk manager.  While if one talks about investing - the person sounds very matured ,conservative and risk averse.

Anyway , I am A Trader and I trade 3 minute chart. I day trade and never take an open position home

10022012

Failure of a failed breakout is a good"with the trend" trade opportunity.Most of the time after trend termination there will be a retest of the extreme before reversal..

09022012

Day opened within previous days Range. Nifty gaped down slightly but refused to go down and formed a double bottom. Good opportunity to go long with a target of Previous day close. As expected Nifty closed the gap and started trading in a range.This range gave two BOF opportunities.
Trade failures at  good locations. DT, DB, PLOD,PHOD.LOD, HOD and gap S/R

08022012

Another inside day. Expectation is that sideways move will continue till price breaks out of the previous days range.It did not happen. Price action was a continuation of the previous days action . Small gap up acted as a break out and the pull back failed to go below the breakout point. alternatively one can enter the breakout of the open and a small pause pull back
Later there were three BOF entries and a a good opportunity to go long when the last shaved WRB failed to continue.
Notice how the market respected PLOD, LOD , and PHOD,
Location , Location and Location. Pay attention to these levels , always

Rants 'n Raves

How to Learn Day Trading

Way to Go

Trading and Investing

Execution

Waypoints 

Bucking the Trend 

Trading for a Living 

Data Packets 

Clash of the Titans 

Food for Thought 

Chicken Sexing 

Self Evident Truths 

Aya Ram Gaya Ram 

Mind Your Words 

System Hopping 

Perfection 

Knack of Trading 

Catch-22 

Emotional Baggages 

Rubik's cube and Trading 


Oceans of Fantasy 

Trader Analysis

Close the Gap 

Automaticity 

Doing without Thinking


Concepts and Tactics 

Reality of the Market 

Fantasies

Self feeding Loops 

Critical Mass 

Visualisation 

Slippery Slopes 

Deliberate Strain 

Rope Trick 

Fundamental Flaws 

Losses 

Uncertainty 

Actionable Analysis 

Decision Making 

Discipline 

The SAR Circus 

Probability 

Small Stuff 

Thou Shalt Fear 

Trading Cults 

Anchoring 

Win More,Lose Less 

Enduring Edge 

Love Virgins 

Think Different 

Number Puzzles 

Unfocus 

Scratch and Win 

Resilience 

Situational Awareness 

Consistency  

Cornerstones 

Functional Fixedness 

The Checklist 

Inefficient Indicators 

Endowment Effect 

Tacit Knowledge 

Conviction 

Goal Setting 

If and Then 

Burn the Charts 

Quit and Win 

Re-read and rediscover 

Capitulation 

Mission Statement 

Emotions 

Practicing to Fail 

Habits 

OODA Loops 

Order Flow Trading 

Lion Taming 

Trading is Hard 

Own Your System 

Swiss Haircut 

Learning to Fish 

Drug Your Trading 

Breakout Blues 

Free System Testing 

Observe the Obvious 

Vuca,Vuca.Hey 

2014,The YTC 

Market Sense

Long Haul 

Testing Times 

HFT Humbug 

Trading Hesitation

Fuzzy Process 

Three Thoughts 

Selective Attention 

Practice Patience 

Connect the Dots 

Seven Pillars
97

Structure And Patterns

Basic Structure

Daily Trading Patterns

Inside And Outside Days

Trends And Ranges

The Opening Price 

Absorption 

Trouble Areas 

Layer Over Layer 

First Trouble Area 

Three Trade Setups 

Trading the Ranges 

Buy Low, Sell High 

Barbed Wire 

VWAP Strategy 

Trends 

Scouting Party 

Spike and Channel 

Initial Range 

Exit First 

Gaps 

Price Channels 
 
Location 

Decision Points 

Round Numbers 

Price Flips 

Brackets  and Envelops

Cigarettes 

Classic Patterns 

Make-or-Break Levels 

Major Swing Pivots 

Liquidity Pools 

Master Candle 

Fluids 

Trend Days 

Pressure Plays 

Trading Plan 

Space 

Score 

Initial Stops 

Sniper Shots 

Dynamic Levels 

TRAP 

Failure to Continue 

Daily Dose 

Trend Traps 

Taming the Trend 

More on Critical mass 

More on Structure
48

07022012

Nifty opened at 5390 within previous days range. Sentiment was neutral and expectation of the range move to continue till it breaks PLOD or PHOD.which did not happen during the day..Today also breakout failures provided two good opportunities.

Market found support at LOD after the first FBO.Then went up and traded just below 5390 for more than one hour. This created three levels of resistance. 5390 .BRN and daily time frame resistance 5400 and HOD..Once 5390 broke it trapped many traders at 5390 and 5400. When Nifty failed to go above HOD these new longs panicked and hurried to exit pulling down Nifty to PLOD.

Always watch out LOL  (Layer Over Layer S/R). It is money in the Bank. 

Trends and Ranges

 

Trade the pullbacks in trends. In trading ranges trade the Breakout failures

Trend is a series of Breakouts and trading ranges are a series of Breakout failures

06022012

Nifty gaped up above the PHOD. But 5400 is a strong resistance in daily charts. Even though the bias is bullish we must pay attention to the big picture. We could have gone long if it opened above 5400. After a pullback Nifty made another attempt to cross the resistance and failed . A good opportunity to short.

We got two other BOF opportunities one long and another short.Finally another opportunity to go long when nifty fall was arrested at the previous day close.
BOF are the easiest and safest trade opportunities.Enter trades only at proven S/R levels.
But ensure that the FTA allows an acceptable RR ratio.

Inside and Outside Days

 

When price trades within yesterdays range it is an inside day. It shows nothing has changed since yesterday and market is likely to trade within the band..Previous days price band acts as a big range. So trade this as you trade a range. Selling the highs and buying the lows.

If the market is trading above PDH or below PDL it is an outside day. If it is above PDH bias is bullish and below PDL bias is bearish.An outside day shows us that something has changed since yesterday.

Inside the range, buy at support when price falls, and sell at resistance when price rises.

If price trades above the PDH the buyers are clearly in control and buy pullbacks

If price breaks below the PDL  the sellers are control and sell retracements.

Daily Trading Patterns

Learn to recognize the daily trading patterns. There are four types of trading days

1.Type 1 days are trend days. market trends either up or down during the trading hours. This can happen after a reversal day or any significant news shifts the sentiment to bullish or bearish.More than two trend days in the markets in a row  are very rare. Trend days are generally followed by  a reversal or consolidation.

2.Type 2 days are reversal days.This happens when a price hits a strong higher time frame decision point during the day and reverses, This will show as hammers or shooting stars on a daily chart.We can expect a trend day after a reversal day

3.Type 3 and 4 days are consolidation or range days.This usually happens after a trend day when the effect of an earlier news dries up and there is no significant events to shift the market sentiment.

More than four swings very rarely happens on a day . try to catch these swings and limit your trades to a maximum of four. Do not over trade.

Basic Structure

Look at the chart below , What is happening ?

This is the basic structure of the market. Market will do this again and again in all time frames.But the price action will unfold differently each time.

03022012

Very difficult to trade type of market today.Nifty opened within yesterdays afternoon range and tested the patience till 2' o clock.Market was making slight higher lows and it showed the higher probability breakout is to the new highs. In such situations one can attempt a breakout trade as there will be a lot of stop orders above this.First pull back after the breakout also can be taken
 Wedge pattern shows accumulation and likely breakout to new highs
 Triple tops and triple bottoms will normally break out on the 4th attempt.

02022012

Entire day nifty was trading in a range. Better to concentrate on breakout failures on such days.A high volume breakout failure is a very safe trading setup.Watch for failures

Disclaimer

This blog is for educational and general information purpose only. The information contained in the blog should not be construed as research report or financial advice.

I am not a research analyst registered under the SEBI( Research Analysts) regulation 2014 and not authorized to give any financial advice. Information contained in this blog should not be used, relied upon or treated as a substitute for specific or professional advice

Information on this site is general in nature only. The content is only general discussion on broad based index Nifty and technical analysis relating to the demand and supply factors.

I do not make any buy /sell/hold recommendation or give any price target. Charts published in this blog are only illustrative examples of the concepts discussed here and are simulations on historical data in hindsight analysis

These simulated results do not represent actual trading and these trades have not been executed in live market with real money. They are identified with the benefit of hindsight and no representation is being made that real trading using these concepts will or likely to achieve results as shown

Any reliance you place on the information contained in this blog is therefore strictly at your own risk. I will not be liable for any damage or loss, direct or indirect incurred using the information contained in this blog

01022012

1.Market gaps down slightly and remains within the range of the previous day.Down move stopped after a small hammer and retest of the low.
2.For the next three hours market traded within a range. Once the breakout to the downside failed, it broke the opposite side of the range and rallied.
3.Rally gave a very handsome return to the patient trader.

Lesson: If the breakout of a tight trading range fails market will successfully break the other extreme of the range