Quote

"Your focus as a trader should be on the behavioral aspect of the market. It is the actions of the crowd of market participants moving prices. It matters more that you can recognize their actions or lack of action, than the specific reason why they should be taking action. This is about understanding the greed and fear that drives financial markets, and how to control your own actions within that context".

 Marc Principato

28022013

I was not trading during the day. I am not very comfortable trading announcement and expiry. On hindsight, market was respecting all our Decision Points and one could have captured the entire down move in three trades.Nifty Price action trading

27022013

Nifty opened within previous day range and could not go above DO. Suspected some absorption there  and shorted below the swing low even though PDC was very close. Went long on LOL of PDC/PDL. TP at BRN. Did not attempt  any other trade as I was scared to trade around BRN (NS&NF) near expiry.There could be so many whipsaws.

26022013

Today I was not trading live. Nifty opened within previous day range. BPB of PDL gave a short. signal. Another opportunity was a short below BRN when two attempts rise above 5800 failed. There was nothing to do other than trailing the stops. But in reality you may end up as a loser on such days attempting unnecessary CT trades

25022013

Nifty opened within previous day range. IR formed.. BOF of PDL gave a long signal.TP at IR high. Went short on TST of IR High on break of the small range.TP  on BOF of LOD. Long on the break of pull back swing high at PDL. TP at PDH. As expected market chopped rest of the day

Cornerstones

Trading consistency will be preceded by Execution Consistency. There is always a gap between the analysis and actually executing the trade. This is the difference between how you believe to act under certain situations and how you actually act when time comes

Execution consistency is all about Decision Making. As traders we are continuously making decisions. Being consistently profitable is becoming better at this decision making skill. The most important and the most difficult thing in trading is to achieve execution consistency

Before we start working on Execution Consistency, we need to ensure that our trading method is robust. Trading method is the foundation on which the whole thing is built. This foundation must be rock solid and weather proof. In my humble opinion, the load of the entire structure rests on the three corner stones. These are Location, Direction, and Exit. Unless you have well researched and proven methods on these aspects you are not going to make any progress.

Location.

There are tons of materials available on the Internet about trading. If you go through this you can find that 90% of the material is about identifying the right location to trade. Fib, Gann, EW. MAs , Support and Resistance are all  efforts to identify these high probability locations. All the oscillators and indicators are doing the same thing.

Direction

Once you identify a high probability location, the next task is to identify the direction in which the trade is taken. A funny thing I have noticed is that people are very rigid and not flexible on direction. For example if they identify a location below the current price, they assume this level will give support and try to go long. They are trying to dictate the Market.

Exits

Once you enter a trade, you need to exit it. It could be either at a profit or at a loss. You need to exit where your original premise gets invalidated, sticking to solid money management principles. Profitable trades should be managed without giving back much.

I believe we have a well defined method in respect of all the three aspects. What we need is to trust the method and work on execution consistency. We are many laps ahead of our competition. Believe me, 95% of the people are still struggling to find the right locations to initiate a trade. If you have doubt, read our trading forums and  blogs..

22022013

Nifty opened near PDL. IR formed. Went long on the TST of IR Low. TP at IRH. BPB of IR high gave a long signal. This trade failed. Missed the final rapid down move.

21022013

Type 1 trending day. Nifty was drifting down the whole day after a gap down below PDL. A counter trend outside gap open where all the positional longs got trapped.. BPB of BRN was the only signal as per my method and this gave good profit

20022013

Lackluster day. Nifty opened above PDC-PDH. I was looking to go long. Did not get a good opportunity. Tried a long when four attempts to go below the MSP failed. Later scratched this trade . Nifty was forming a classic Barbed Wire around PDH-PDC with DO and MSP as extremes

19022013

Nifty opened near PDC. Formed a cigarette pattern around BRN. Went long on BOF of range low. This trade moved much more than I expected.I did not expect it to move beyond PDH

15022013

Nifty opened within previous day closing range and sold. BPB of PDL-PDC gave a short signal. Did not move as expected. TP when it started making a cigarette. Short on down side break of this tight range. Exited when it failed to move and long on the BOF of range low.This one moved well.TP at HOD

Consistency.

The ultimate aim of every trader is to become consistently profitable. Whether you like it or not, trading consistency will remain elusive for many of us.

In my opinion there are three stages of trader development.(Read). These are defining the structure, deciding upon the tactics and taking massive action. The third stage is the most difficult one to conquer. In fact it is a never ending journey where you evolve continuously as a trader. Be prepared to go through many drawdown, losses and pain

Trading consistency will be preceded by execution consistency. There is always a gap between the analysis and actually executing the trade. This is the difference between how you believe to act under certain situations and how you actually act when time comes ( Read).

Having a good method with an edge and being good at analysis alone is not going to make you a better trader. The ability to push the button under pressure is equally important. The difficulty in trading is physically being able to execute the trades. Proper execution alone can make your edge work.

I can tell you one thing. This is not going to be a smooth sailing. Be prepared to feel a lot of frustration. When you hesitate and skip a good trade, price will go exactly where you expected it to go. In frustration, later you will either make a premature entry or chase a trade and will cause a draw-down. Sometimes you may get a nice entry, but Market will come back, trigger your stop by a tick, and will go where you wanted it to go. Time and again this is going to happen especially if you are trading a discretionary method

Trading is all about execution and it is a lot harder than most people think

14022013

Nifty opened near the bottom of the previous day range. IR formed. Not a significant one.Went long on BOF of PDL. Covered when it failed to move above IR High/DO.Short on BPB of PDL. Did not move as expected.Scratched. BOF the range high gave another short signal. TP near BRN

@Mohit

Mohit said...
Hi Sir,
I have started paper trading using your method to practice before I start live trading. First I mark the trades on my chart, then I look at your chart for guidance. Please look at today's trades.
1. Entries are marked with blue lines.
2. Please tell if the trades marked are correct or not.
3. I viewed the broad range during mid-day marked by you as two set of ranges.
4. Please tell if the last trade could be taken or not.
Thank you!
Mohit
This is purely a discretionary method .Actual trades may differ from person to person. It all depends upon your feel and read of the market.If you understand the core concept ie the acceptance and rejection of levels, you can trade it in  million ways.You may understand the method in a week ,but learning to execute it without hesitation will take much longer.Now regarding your trades
1.Entry one is good . you will have two layers of defense. Stop below DO( also IRL)/PDH .
2.Trade 2 is a little bit risky. FTA IR High is too close and trade is a CT trade.. If the signal was a BOF of HOD, I would have traded it. But it was only a TST. No order flow from trapped traders.The only plus is the stop location, above HOD.
3.You considered this as two different ranges. Then you can attempt the BOF of lower range.high.
4.You could have waited a little more to TP at PDC. Before hitting PDC price broke PDH/DO/IRL. Pull back did not go above these levels.
5.Better to avoid the last trade. It was the fifth push down.First entrants is in 40 point profit time to book profits for them.Critical Mass is short now and look for a reversal.
You need not trade my trades. Understand the core concepts and trade what you see. It may take some time to streamline your thought process. After a while it will be alright. Unfortunately people won't stick. They will flirt to some other method.

13022013

Nifty Gaped up above PDH. An outside trend gap.I expected a pull back to PDH which did not happen Missed the up move.Skipped FTC above HOD as FTA IRH was too close.   BPB of IR High  was the only trade I have taken. This trade moved well.

12022013

Nifty opened within previous day range. IR formed. BOF of PDL gave a long signal. TP at PDH. Entered short on TST of PDH when it fell below IRH. I expected it to move towards LOD. Did not move as expected . Scratched.Skipped the BPB of PDH as it came very late

11022013

Nifty gaped down below PDL. IR formed. Went long on BOF of IR Low.Price moved to PDL as expected.  TP at PDL. Another two hours price moved in a 10 point range. BOF of range low gave a long signal.. This trade did not move as expected. Scratched

Today I messed up all the levels. Some of you might have noticed it ,I think. I came to the market an hour late and found Nifty trading in a range.I totally forgot about the intraday gap in icharts. I wrongly considered the last 4 bars of previous day  as todays action and traded the whole day..I noticed this error only when techtrader pointed out this. Thanks techtrader.

@Mohit Sharma

MOHIT SHARMA said...http://oi48.tinypic.com/2di505v.jpg ( 07-02-2013)
Hi Sir,
I wanted to ask some doubts;
1. My data shows the DO different from your chart. Please tell if the IRH is marked correctly.
Don,t be too technical in your approach.Everything should be obvious and every trader must notice the levels. No secret levels will work. We need a lot of people to act here. I will take the yellow box as IR
2. Whether the first trade is valid as BPB of IRH or Master candle over PDL?
I will consider this as a direct BO of IR High/PDL without a pull back.In our scheme MC should break the DP. It should be a BO candle
3. Whether the points marked with black lines could be taken as BOF of respective decision points.
Here again too technical. Wait for the break of a flip zone and swing point for a reversal trade
4. Can the fourth black line be taken as a BOF of IRL?
It is a BOF . But No entry triggered. For a CT trade it should at least break the nearest flip zone
5. If suppose we take the IRL BOF trades on 4th or 5th black line, will u scratch the trade if the price closes below IRL?
My original  stop will be always beyond the extreme.If FTA is too close, I will enter after this area only. In such cases if it comes back I may scratch
6. Please give some direction for profit-booking and trailing stops, I only know about using pivots/flips zones for trailing stops which is a trend-following method. Since your style is that of range trading, do we use some different methods like fixed profit points/price action at FTA,etc.?
Same is applicable here . On the long side trail stops behind swing lows in the beginning. When the trend matures exit when  it breaks the flip zone not to give back earned profits.
When a matured trend hits a prominent DP exit the trade.If you are sitting on un deserved profit, exit and re assess the situation. You can always reenter. Everything can not be quantified and brought under written rules. There is no substitute for screen time.

08022013

Open within previous day closing range. IR formed BOF of IRL gave a long signal. TP at MSP. Reversed the trade and went short. Closed it at PDL. LOL BOF of IRL/PDL gave another long signal which failed to move.Scratched the trade and went short on the break of LOD. Nice move.down.BRN gave support

Situational Awareness

Trading is all about Decision Making As traders we are continuously making decisions. No doubt profitable trading requires good decision making skill. Good decision making in trading requires right perception of market environment, ability to analyze the complex signals in real time and projecting the future probabilities of price action.. This requires Situational Awareness.(SA). SA is the foundation of successful decision making.

Situational Awareness is a military terminology. But it is very well applicable where complex decision making skills are required. SA training is given to the personnel where complete, accurate SA is essential such as aircraft pilots, fire fighters rescue forces and security staff.

Situational awareness is the perception of environmental elements with respect to time and/or space, the comprehension of their meaning, and the projection of their status after some variable has changed, such as time, or some other variable, such as a predetermined event. The most common theoretical framework of SA is provided by Dr. Mica Endsley  Endsley's model illustrates three stages or steps of SA formation: perception, comprehension, and projection. ( Read More)


People typically operate on five distinct levels of SA namely  "tuned out," "relaxed awareness," "focused awareness," "high alert" and "comatose. The basic level of situational awareness that should be practiced most of the time is relaxed awareness, a state of mind that can be maintained indefinitely without all the stress and fatigue associated with focused awareness or high alert (Read More)

Situational Awareness in trading is about changing your strategies based on change in situation. Next step is to think of situations before they develop and anticipate markets next move. As traders we must learn to operate in a complex market environment by making appropriate decisions and taking effective action.

07022013

Nifty gaped down below PDL and moved down . I was looking to go short on a pull back to PDL/DO. First bar acted as IR. Nifty broke above IRH/DO. Missed the sudden up move.I did not expect such a move. I was expecting a fall below IRH to go short. Went short on TST of PDH. My target was PDL/PDC, but this moved much more. Long on BOF( TST ?) of IRL( I ignored the tail)..Reversed the trade on  BOF of PDL. TP at LOD.. BOF of LOD gave another signal to go long.This trade also moved well.

06022013

Nifty opened within previous day closing range and this happened to be the previous days range. IR formed . Too narrow to initiate a trade.. Went short on BOF of PDH..Thought it will bounce of the IR low. But the MC and Price flip helped to avoid a premature exit.. TP at PDL. Went long here. TP when Nifty failed to remain above IR Low.

05022013

After two days fall Nifty consolidated within a 20 point rangeWent long on TST of IR low. Scratched the trade. Missed the next sudden up move. Short on BOF of PDL. TP at LOD

04022013

Nifty opened within previous day range. IR formed. A cigarette pattern formed. Did not short the break of low as I suspected PDL to give support. BPB of IRL/PDC gave a short signal.TP at BRN.

01022013

Nifty gaped up above PDH. CT outside gap. My expectation was a channel which did not happen. Went long on BOF of IRL. Scratched this trade. Market made 3 pushes to break above IRL. Went short when the fourth attempt also failed. Nice move down. Another short ar BPB of PDH. TP when the move failed to continue below the previous low.