Thank You. All

The year 2013 is coming to an end. This year was an eventful one for me both personally and professionally. I am happy that I could nurture "Nifty Nirvana" well during the year despite many personal issues.The readership has really exploded. The book was accepted well by the readers it seems. More than 1500 downloads so far. Much more than my expectations.

The blog greatly helped in the evolution of the Decision Point method.Apart from that the blog provided me so many opportunities to interact with amazing people from around the world which include many well known traders.At the moment I would like to thank all the readers of Nifty Nirvana.I am very grateful to you for supporting this blog and contributing your ideas.

I believe that I have in some small way made a contribution to the trading  community that has given me so much.I assure you that I will strive to deliver valuable content consistently  in future also. I pray for your continued support. Thank You All

Wish you all a happy and prosperous 2014
 

31122013

Nifty gaped up within previous day range. Went short on the break of IRL. Scratched the trade when price bounced from swing high. Another short on BOF of IRH. Closed the trade later at a 10 point profit. The whole day Nifty was within a 12 point range.

30122013

Nifty gaped up above PDH, but could not stay there. Went short on BOF of PDH on break of PDC. TP around 6345. Then a barbed wire around 6350 (NS BRN 6300) for a long time.Tried a short on the BOF of range high. Scratched it. Another short on break of LOD . Expected to break PDL and move into the fluid. Scratched this trade also as the trade did not move as expected.

2014,The YTC

New Year is round the corner. For most of us it is time to take new resolutions and start chasing goals only to flame out soon. Why?

We are doing it wrong. We are just chasing dreams. We never cared to define a process to achieve the goal. Discipline or will power is not going to work here. Committing to the process is what makes the difference.

While cooking, we need to follow a recipe. Even for making a cup of coffee, there are certain well defined steps to be followed. In the beginning we may not get the desired results but still we need to finish the process. Stopping the process half way is not going to give us any results.

Coming to trading, we do not need level 3 data, costly computers or the latest version of charting software to trade successfully. These are all excuses we find to procrastinate and delay taking action. We are afraid of failure. Preparations to get something done should end somewhere.  It is high time that we stop searching and start doing.

First step is to select a suitable method and commit to it. Before risking money in the market ensure the selected method is working well. There are so many methods in public domain that we can use as a template to develop our own thing. Do not waste your hard earned money unless you trust the structure and tactics completely. Once you select the method trust it and commit to it completely.

Then eliminate all the unwanted things and stay out from distractions. Trading forums and chartrooms are doing more harm than good. These can be helpful in acquiring some basic knowledge at the initial stages but becomes a distraction later. Too much of conflicting information is too bad for our trading. So called discussions will drain our emotional capital.

Knowing something is not enough. We must act on it. It is not a secret that 90% of the people you find on our trading forums have not executed a single trade in their life time. They will read the trade and will never trade the trade. Remember trading is a skill you can learn only by doing. Just start doing it. There will be road blocks and hindrances. Don’t worry about it. We can deal with it as we move along.

As traders we must always be concerned about two things, Time and Capital. Capital includes our emotional capital.  Are we making efficient use of our time and capital? We are wasting too much of time on things that make little difference. Still we are searching for new tactics and debating unrelated topics at the forums wasting time and emotional capital.

Now let us focus on the execution. Trading consistency always follows execution consistency. Let 2014 be the “Year of Trading Consistency”. Let us commit to the process. Let us follow the recipe.  Let us take massive action to achieve this goal.

Commit, Eliminate and Act

I wish all the readers of “Nifty Nirvana” a Happy and Prosperous New Year

Break !!!

Taking the  much needed break. I am on a leisure trip with my family. Will be back only on 27th.

This time we are visiting Munnar, Madurai, Palani and Valparai.Trade well and take care.

20122013

Nifty opened near PDC and refused to go below PDC.First candle acted as IR. Going long was not an option as there were BRN and MSP above. There was a BOF of BRN skipped it as it was counter bias and IRH,PDC,IRL,PDL as barriers below. Went long on the BPB of MSP.Covered around 6240. Nifty traded in a range for a while. BOF of range low ( MSP) was a long signal. Waited as there was no momentum. Finally went long on the BPB of range High.Captured the entire 40 point move and covered at BRN 6300.

19122013

Nifty Opened above PDH and sold. Fall was so fast that I could not t get an entry  on BOF  PDH. Went short on BPB of BRN. I expected a second leg down move. Covered near PDL. Tried a short when nifty reversed from the flip and breakout above the range high failed. Scratched it.Avoided the long as there were BRN and MSP as barriers  I was expecting a BOF of MSP or BRN. Short on BOF of BRN. This gave some 20 points

18122013

.
Announcement day. Stayed out till the announcement is over. Tried a short on FTC of vertical move. The fluid below was the attraction. But BRN 6200 option strike lend support. Long above the consolidation. This one also ended as a scratch. BOF range low was a long opportunity. Skipped it as it was very  late. This moved well without me.PDC/PDL wrongly marked as LOD

17122013

Nifty gaped up above PDH. Counter trend outside gap. Went long on the break of first master candle. I was very confident about the trade but it failed. Thought of going short when third time TST occurred but hesitated to pull the trigger.Later Nifty traded in a tight trading range. Shorted the BOF of range high. Price broke PDC as well as PDL. Exited when market started chop.
@ Kavi. Second trade is your pattern. Isn't it ? Hope you traded it

16122013

Nifty gaped down below PDL. First signal was a BPB of  PDL short below the first Master candle. Skipped the trade as the trade was into the option strike 6150 of NS and I was expecting a range move till WPI announcement is over.BO of IR failed. Went long above IRH. Closed when Nifty failed to settle above BRN. Attempted two more long trades on BOF of IR and BOF of LOD. Both the trades did not move as expected. Whole day Nifty was in a 25 point range.

High Low Range

If you are a day trader , you might have noticed that recently it has become very difficult to trade intraday moves. Nifty gaps ups or down and spend the whole day in a tight trading range making short term trading difficult.

One reason  is after the introduction of XX50 option strikes, the play ground has shrunk. Most of the daily moves are due to the action of the day trading crowd. Big boys and institutions were not interested in these  moves between the option strikes which we called BRN. Now they are defending the xx50 levels also

Another reason is volatility compression. Markets are cyclical and alternate between high volatility and low volatility. We are going through a low volatility phase. This is temporary and will pass

Sunil Saranjame of timamo has written an excellent article on this phenomenon.Click to read 

Download the E-book

Finally here is the book for a weekend read. Being regular readers of the blog, I am afraid, you will be disappointed with the book. In fact there is nothing new in it as I have already shared everything through the blog. Anyway please go through it and let me know your feedback. I am more interested to know the negatives than the positives so that I can focus on the negatives next time.

I have already written more than 130 articles in the blog for the last two years. I am monitoring the incoming traffic to the blog regularly and I have more than 250 regular followers. I am very sad to learn that I am not getting any hits through  social networks like Twitter,Facebook and Google+. This shows that the readers of this blog never cared to share any of these posts through their social networks.

I request you to help me reach out.Please do share the book and promo video. Just click on the buttons below the posts to share it through your Twitter, Facebook and Google+. While sharing on Facebook, select the right thumbnail.  Thank You.

Download

Dynamic Levels

There is too much of confusion about IR and other levels. I will try to clarify. There are two types of decision points. Fixed and Dynamic. Fixed levels are past levels which will not change like PDL,PDC,PDH,DO etc.. Big round numbers are also fixed levels.Other current day levels are dynamic which will be revealed by the on going market action.

We trade the market as if it is in a range all the time.But many times we may need to take action before knowing the exact structure. In other words we have to trade the provisional or probable ranges or stand out. What we do is to assume a provisional range and take action.Later we may need to change these levels slightly. Go through today's price action

We will never know for sure where the orders are . So we start with provisional levels and modify it later. First we identify the IR. We ignore the lower tail and mark the round number as IRL. High of the pink box is IRH. If we want to go long above IRH then there is no way but to long above this box. It is a BOF. Later the boundaries get extended to  the green box.. Now there is no point in projecting the pink box to future. New levels are green box.extremes.

Likewise the purple box levels get modified to the blue box levels. There is no point in continuing with the old levels when dealing with future price action. It is not possible  for me to mark all the modifications on the chart. Most of the time the final levels are marked on the chart.

Decision points are not exact levels but minor zones. Do not mark it with a drawing pen. Mark with a highlight pen. Millions of people are executing countless strategies at the same time in markets. Expect some overshoot and overlap. Please do read my earlier article Brackets and Envelops

Hope I could convey what I wanted to say without confusing you. Otherwise let me know.

13122013

Nifty gaped down below PDL. IR formed.Did not attempted BPB of IRL as BRN was very near.Long on BOF of BRN. Scratched later. I was expecting a bounce on week end  after continuous fall. So skipped the short at IRL.

Vuca,Vuca.Hey

The word “Vuca” means “wake up” in Zulu language. But the acronym VUCA is originally a military term which became popular at the end of the cold war. Today it has become a widely used description of the current global economic situation. VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity

Volatility is turbulence and refers to the nature, speed and magnitude of change that is unpredictable. Volatility creates uncertainty where past events cannot be used to predict the future outcomes which make decision making difficult. Numerous and difficult to understand causes adds layers of complexity to the process which may lead to chaos and utter confusion. This leads to the last acronym Ambiguity. The end result of VUCA is the inability to capitalize opportunities and identify threats before it becomes lethal.

Companies worldwide are spending billions of dollars to train their managers to operate in VUCA environment. They mainly focus on another VUCA for this. Managers should have a clear Vision about the future of their institutions to counter volatility. Leaders must learn to look and listen to make sense of the volatility and to lead with vision. They must have proper Understanding of the big picture. Managers should have Clarity to counter chaos and take effective decisions. Ambiguity can only be countered by Agility, the ability to apply solutions quickly.

As day traders, we are operating in a VUCA environment from open to close everyday. We are taking countless decisions on a day today basis. How many crucial decisions a CEO or manager has to take during his tenure?, I wonder. In my humble opinion day trading must be included in the business school syllabi. Let them learn something from us.

Anyway, learn to navigate through the VUCA environment with Vision, Understanding, Clarity and Agility.

Remember the song Vuca,Vuca hey hey. Wake up, Wake up.

12122013

Nifty gaped down below PDL. IR formed. Did not short below the IR as BPB of PDL because of BRN 6300. I expected a range between PDL and BRN. Rest of the day Nifty was in a tight range of 13 points. Did not attempt the firsr BOF of BRN. Second one attempted and scratched.Thought of going long on the break of the Cigarette range high but did not due to IRL and PDL were  too close. Could capture the last BOF which gave good returns. .

11122013

Nifty Gaped down below PDL. Short on BPB of PDL. Stopped out of the trade. Tried a long on BO of MSP. It did not go beyond PDL/HOD/IRH. Scratched the trade. BOF of HOD was a nice short through the fluid. But missed it . Long on the BOF of LOD. Entered early as I suspected a reversal from MSP. But Nifty broke MSP and HOD . Nice move up

10122013

Nifty opened within previous day range. Sold and broke PDC and tested PDL. IR formed. Short below IRL . I expected it to move well through the fluid. TP when second push failed to extend. Another short at BPB of range low. This one failed.Stopped out for a point. Went long on the BOF of range low on break of MSP. Made 20 points.

09122013

Nifty gaped up 150 points well above PDH . I was looking for a FTC short. Market did not give an opportunity. There was a BOF of BRN. Skipped it as the initial move was very strong on the sell side. Went long on the BOF of IR. Later scratched the trade. BRN in between was resisting the up move.

06122013

Nifty opened near PDC. IR formed. Long on TST of PDL (BOF of PDC)on break of IRH. TP at BRN. Did not attempt the BOF of BRN short and TST of PDC long due to IRH. This level was 6250 NS. Finally short on BOF of BRN and TST of HOD. Scratched

A Video Promo

05122013

Nifty Gaped up above PDH. Failed to continue above IRH. Short when third attempt to go above 6320 failed. I was expecting a bounce from BRN. But it went further down. TP around 6280.

04122013

Nifty gaped down below PDL. Fist candle was an MC and acted as IR. Did not trade the BPB of IRH as PDC was very close. Went short on BOF of PDC/Range High/HOD. TP  around 6210.Missed the next move down. I was looking for a long above MSP.

03122013

Nifty opened within previous day range. It was trading around BRN 6200 of NS. Noticed two opportunities. Long above the morning MC and a short on BOF of Absorption level. Did not take them. Choppy day.

02122013

Nifty opened near PDC and spiked. did not channel as expected.Skipped  BOF of IR High as there was no space . Went long when the BOF failed.This spike acted as a range for the remaining day. Short on the BOF of range high. Covered the trade when price refused to go below IRH.

29112013

Nifty opened above 6150. Went long above the first candle even though it was not a correct IR. The move surprised me. I expected a channel move till BRN only. Then it was a tight trading range rest of the day. Shorted BOF of range high. This did not move as expected.

28112013

Nifty gaped up above PDH and broke BRN. IR formed. Skipped the BPB of BRN as my bias was not bullish. Shorted the FTC. closed the trade at BRN. Did not attempt any other trades being expiry day.

27112013

Nifty opened above PDC and sold. Skipped the BPB of PDL /PDC as 6050 of NS was very near. Shorted the BOF of MSP and TST of PDL. Covered this when price refused to go below the range low. Went long on the BOF of LOD. ( wronly marked as HOD) scratched when it bounced back from PDL. Long on the BO of PDL . Covered at HOD. Another short on BOF of HOD. TP at PDL.

Trading Course

Adam Grimes has launched his FREE trading course. Week 1 videos are now live. There are three videos. It will take you nearly two hours to watch these videos. I have gone through them and they are excellent.

Adam Grimes is a well known author and his book "The Art and Science of Technical Analysis" is a best seller. The course is based on the original training material he developed for "Waverly Advisors" an investment research firm. According to Adam Grimes the course will be structured in four parts

• The Foundation of Profitable Trading: (3 weeks) focuses on the math behind profitable trading, and different ways to find an edge in the market.
• The Patterns of Profitable Trading: (5 weeks) each week focuses on a specific trading pattern with the student doing testing and analysis to verify the pattern in live market data. This is also a critical part of developing your own system and approach based on these patterns.
• The Skills of Profitable Trading: (6 weeks) extends the work of the previous section by drilling deeper into some patterns, looking at ways to combine tools, screen for trades, and working to understand the consequence of decisions in the marketplace.
• Special Topics (5 weeks): This is the section that may be expanded or, perhaps, delayed, depending on how complicated production turns out to be for the rest of the course. Currently, I plan to do a week on these topics: daytrading, system development/system-assisted discretionary trading, options I, options II, and long-term investing.  

Do not miss this opportunity to go through professional training  material. You can also interact with Adam Grimes through the forum. Register here to access the material. This is a life time opportunity for a Retail Trader.Please do make use of it participating actively at the forum.

26112013

I was totally confused and did not know what was happening. In hindsight, I suspect it was a wide channel down. First trade was the BOF of IRH. target was IRL. TP when the break of BRN failed. Shorted when the low of MC broke. I think I was the last man to sell there. Went long on the break of the range high. Two trades ended as loss. Price was chopping around. So did not attempt any other trade.

25112013

Nifty gaped up and spiked. First trade was a BPB of PDH. TP at BRN. There was a FTC above the spike high. I did not attempt it. I was ready to long on TST or BOF of PDH . But market reversed before that,fooling me. BPB of HOD/BRN gave a long signal. Was not confident about the trade as I was trading into BRN 6100 of NS. Still I could make 20 points.

22112013

Nifty opened above PDC. IR formed. Skipped the BOF of IRL ( I came late Otherwise I would have shorted the IR low and lost ). Long on BPB of IRH. .This  trade did not move.Scratched. Shorted when price reentered the lower range as BOF of IRH.Stopped out. short below PDC/MSP . Covered at BRN 6000.Did not take the final BOF of PDL/BRN

21112013

Nifty gaped down below PDL. First MC acted as IR. Short on BPB of BRN below IRL. Tp around 6050. Did not get any other reliable entry. All the day Nifty was slowly drifting down.

20112013

Nifty opened near PDL. First candle acted as IR.Went long on BOF of PDL. I thought the previous day range will continue. Stopped out. Missed the up move. Short on BOF of IRH and TST of PDC. This trade did not move. scratched. Another BOF  at PDC/HOD. Went short below MSP. Price broke MSP/BRN/LOD and went south. TP at 6140.

19112013

Nifty opened near PDC. Skipped the BOF of PDC/PDH   as IRL and MSP were below it. Attempted two trades. BOF of IRL and BOF of HOD. Both the trades did not move as expected. Nifty traded in a 25 point range the whole day.A barbed wire around PDH/PDC

18112013

Nifty gaped up above PDH. IR formed. Nifty was trading in IR and an envelop range for four hours. TST of DO-LOD-IRL-DB gave a long signal. Closed the position at BRN. Could have stayed a little more time

Observe the Obvious

If you are a regular reader of this blog , you might have noticed the market respects  the Decision Points repeatedly. Almost always the price stalls at a decision point and decide about its new direction. Most of the time these levels are very accurate and they  work like charm.

What is so special about these levels ? In fact there is nothing magical . It is all simple common sense.Let me explain.

A lot of traders use moving averages to trade the markets. They identify locations to initiate their trades in many ways. Some people enter on price crossover and some others on average crossovers. These traders use different moving averages to make decisions . This varies from 3 period to 200 period. Further,some of them use simple averages and others stick to  exponential moving averages. In short these traders are identifying different locations to enter and exit their trades.

Story is not yet over. Traders are using these method on different time frames. Day traders normally use 1,2,3,5,10,15 minute charts. Try to mark all these levels on a chart. It will cover the entire chart space.

Now think about other methods like trend lines, Fibos, EW , and many other indicators. These people use different settings on different time frames. All these traders  are divided and identify and trade different levels. In short there is no unity only diversity.

Now coming back to the Decision Points.These levels are fixed and visible to all the traders. There is no confusion or ambiguity about the levels. Previous day high is the previous day high for all. A BRN is a BRN for all. So all the traders monitoring these levels are going to act at the same level. Decision Point traders are united and they rule the divided rest.

Decision points are not my invention. Traders were using the levels for long. I just gave them a name. That is all. Decision Point traders are a few in numbers, I agree. But they are able to move the market because they trade big. They trade big because they are profitable.Most of the time they win because others are divided.

Do not trade what "you" see on the chart, trade what "all " see on the chart.

14112013

Nifty opened below PDH and spiked. Expected a channel move. Long above IRH. Scratched the trade. Went short when price broke below IRH. I was expecting a move till DO/PDH. Covered on BOF of BRN. No other trades today

13112013

Nifty gaped down below PDL. Almost all the day it was in a broad channel. Without knowing it, attempted two shorts and lost money. Last BO trade of IRL was also a scratch. 2 in 1 pattern. A channel and Barbed wire

12112013

Nifty opened near PDL and spiked. IR formed. Went long on the BOF of PDL/BRN. TP around 6140. BPB of BRN was another short signal. I skipped it as price was moving down in a channel.But it moved 30 points.

11112013

Nifty gaped down below PDL. Totally messed up the morning session. Hesitated to short on BOF of IRH. Bias was bearish so went short on break of IRL. Got stopped out and missed the long trade. Went short on BOF of PDC-PDL. closed the trade near IRL. Another short on BOF of range high. Covered at LOD

Six Blind Elephants

In a forest, there lived six elephants. These elephants were blind by birth. They heard a lot about men and were wondering what men were like. After arguing a lot, they decided to find one and determine it by direct experience.

One day a poor man stranded into the forest losing his way. The blind elephants caught him. The first elephant felt the man with its trunk and front leg. He declared “Men are flat”. One by one, the other elephants felt the man. They too agreed.

Elephants left the place, happy with their new discovery, leaving the dead man aside.

You know this man and the elephants well. Who are they?

If you want to know the answer, click here and find out.

Free System Testing

Many traders think their trading system will lose its edge if they disclosed it. They keep it secret as if it is some nuclear bomb code or cryogenic engine technology. I can understand, if it is some High Frequency Trading algorithm they developed after spending a few million dollars. But almost always it could be a crappy curve fitted Amibroker code based on some indicators every Tom Dick and Harry is well aware of.

Unless we are operating on a millisecond timeframe and attempting to exploit a wafer thin edge with an automated trading system, there is no point in keeping the method secret. That is all beyond the reach of a retail trader. Even billion dollar funds are struggling with it.

I think, there are two reasons for keeping the system a secret. The first one is they want to sell it and make some money. Otherwise the system could be so crappy that they themselves have no confidence to share it and they are not able to defend it on public scrutiny.

It is always better to share your system publicly, I feel. The system need not be profitable. Do it even if you find something potentially profitable. Market is so deep that it will not be affected by few people trading your method.

Sharing it publicly will have some huge benefits. Other traders trying your method will prove its worth fast. You will always get feed backs so that you will have a better idea about the positives and short coming of the method. Then you can focus on its strengths and modify it to eliminate the shortfalls.

Even if your system is crappy, don’t worry. You will understand it is not viable much earlier without you having to waste a lot of precious time on it, so that you can move on to something else.

Share your system. It is as good as hiring a few system testing professionals to evaluate it, and it is free.

08112013

Nifty gaped down below PDL and made a range between BRN and PDL. Went short on the break of range low. Covered when second push down failed. Another range move. BOF of range low gave a long signal. I was not comfortable trading into BRN which was a strong flip zone. Entered above BRN and got stopped out.

07112013

Nifty opened near PDC and went down breaking PDL. IR formed as a barbed wire around PDL. Went long above the IRH . I was expecting a move to BRN. But price broke BRN and PDH. Covered on FTC. Tried another long trade on BOF of MSP/PDH and test of BRN. Target was HOD. But it suddenly reversed with a big bearish bar. Scratched. Went short below BRN into the fluid area. Nice move down to LOD.

06112013

Nifty Opened near PDC. The first two candles of the day acted as the Initial range. There were too many levels inside the range. BRN,PDC,and PDL. Attempted a long trade on BOF of IRL. Long above MSP. I expected it to go to IRH atleast. Scratched it. No other trades today.

05112013

Nifty gaped down below PDL/PDC. BPB Short below IRL. TP at BRN. BOF of BRN after a range move gave a long signal. Bought above MSP. Exited the trade at DO. Nifty went up further and BO of PDC-PDL/DO gave another  short signal. Shorted below MSP.My target was BRN or LOD. But the trade did not move. Scratched.Did not attempt the last down move as there were too many levels around

Reading:The Four Poisons

The Four Poisons

 

There is a Korean martial art called Kum Do. This is a brutal game that involves a fight to the death with very sharp swords. The way it is practiced today is with bamboo sticks, but the moves are the same. Kum Do teaches the student warriors to avoid what are called “The Four Poisons of the Mind.” These are: fear, confusion, hesitation and surprise.

In Kum Do, the student must be constantly on guard to never anticipate the next move of the opponent. Likewise, the student must never allow his natural tendencies for prediction to get the better of him. Having a preconceived bias of what the markets or the opponents will do can lead to momentary confusion and—in the case of Kum Do—to death. A single blow in Kum Do can be lethal, and is the final cut, since the object is to kill the opponent. One blow—death—game over.

Instead of predicting, anticipating, and being in fear and confusion, you must do exactly the opposite if you are to survive a death blow from the market movements. You must watch with a calm, clear and collected attitude and strike at the right time. A few seconds of anticipation, hesitation or confusion can mean the difference between life and death in Kum Do—and wins or losses in the stock markets.

 If you are not in tune with the four poisons of fear, confusion, hesitation or surprise in the markets, you are at risk for ruin. Ruin means that your money is gone and the game is over.

How can you avoid the four poisons of the trading mind: fear, confusion, hesitation and surprise?

Replace fear with faith—faith in your trading model and trading plan
Replace confusion with the attitude of being comfortable with uncertainty
Replace hesitation with decisive action
Replace surprise with taking nothing for granted and preparing yourself for anything.

Success in trading is a long journey with many twists and turns. You can and will get there if you are patient, watchful, non-anticipatory and always on guard for the exact moment when you can strike. Trading is a game of survival and the spoils are money. It’s your money, your life and your future. You have the power to survive and flourish if you remember the lessons from  Kum Do.

By Janice Dorn, MD, PhD

Link to the original article

Work in Progress

01112013

Nifty moved within  a 30 point range the whole day. Attempted a BOF of Range High. Scratched it later. Price was hanging around 6300 of Spot Nifty. NF was trading at a premium of 50 points.I think  there was a BPB of PDH/PDC for those who traded NOV contract chart. Levels may differ as I was trading the continuous current chart.Wish you all a happy Diwali and profitable Samvat 2070.

31102013

Expiry day. Entered long on break of IRH. Exited at a small profit. Skipped the BOF of PDH and BOF of strike price. Both the trades worked well.I am not comfortable trading expiry especially the afternoon session Expiries are always manipulated.50's are slowly getting BRN status due to the new option strikes.

30102013

Nifty Opened a little above PDH. IR formed. Failed to continue above IRH. Made a Barbed wire around PDH for a long time. Long on the the BPB of Range high above IR high. I did not believe the up move with so many candles with upper tails. Covered at 20 point profit. Missed the down move as there were so many trouble areas on its way

29102013

Nifty opened inside previous day range. Broke PDC/PDL/BRN and pulled back. Skipped the BPB trade due to the RBI announcement. After the announcement, Market turned bullish and entered on the first breakout. After that it was only trailing all the way. Nifty coolly broke PDH and BRN 6200. TP around 6220. Nice 70 point move.

28102013

Nifty was in a channel almost all the day. The only opportunity was a BPB short which gave 20 points.TP around BRN

Pink Eye

Suffering from Viral Conjunctivitis. May not be able to update the blog regularly

I wonder how long it is going to get cured. 

Read

Breakout Blues

From the comments I received recently, I am afraid people are treating the method as a breakout trading method. Most of the traders are getting caught on the wrong foot trying to trade breakouts. This could be due to the higher percentage of breakout trades in my analysis due to the higher market volatility.

Breakout trades are least priority trades in my scheme. I assume the market is in a range all the time and the preferred trades are fading the range extremes. Range is a series of “Failure to break” and “Breakout Failures” of range extremes. These three trade setups are my bread and butter methods.

People find breakouts attractive because it is very easy to identify and it is extremely rewarding if they get it right. Predicting a successful breakout is one of the hardest tasks a trader can do. In an established range there could be multiple failures before one succeeds. Most of the breakouts do fail and it is better to wait for the breakout to fail or give a breakout pullback rather than making a direct entry.

I do attempt direct breaks. These trades are called PressurePlays. We must be well aware of the context in which the BO is taking place and ensure a higher probability of success. Be aware that trying to predict a BO is extremely risky and better to stay out if we are not confident. Then it is better to go for a Breakout Pullback.

What if the Market runs without a pullback?  Then let it go. Markets are for ever.

Further traders believe trends start when price break out of a range. I do not subscribe to this view. I think a trend always start from a range extreme and run further breaking the other extreme of the range. I prefer to enter at the beginning as against the middle 

25102013

Nifty gaped down below PDL and made a Barbed Wire around it  the whole day. Attempted two BOF trades. Range High and Range low. First trade did not move as expected. Second one broke the other extreme as expected. But there was no follow up buying. Price fell back in to the range again.

24102013

Nifty Opened at BRN and attempted to sell but got rejected . Missed the BOF trade. Waited for a pull back on BOF. IR formed but there was PDH above it.Could have gone long above PDH. Did not attempt the FTC at HOD as I was not comfortable shorting against a strong up move.Nifty drifted down and I suspected a Barbed Wire around PDH. Successfully did an SS trade here.Shorted the break of Range Low. First lot target was BRN. This made second lot trade free. Nifty gave a deep pull back to BRN. Shorted the BOF of BRN below the BO candle. Skipped the last BOF of LOD

23102013

Nifty opened near PDC. IR Formed. Missed the move down as I hesitated to short below IRL. I thought PDL/BRN level will stop the fall. Went short on BPB of BRN.( Or was it a BOF of BRN to the upside?).TP at the range low. Another short on BPB of Range low. TP around 6150. Long on the BOF of LOD on break of the range high. Expected the move to hit BRN. But this did not happen.Nice 40 point move

22102013

Nifty opened within previous day range and chopped around BRN 6200 of NS.Attempted a long trade on BOF of IRL but had to scratch it.In hind sight the TST of PDH was an opportunity to make 20 points

21102013

Nifty opened within previous day range IR formed. Long on break of PDH/IRH. BO failed. Stopped out. Did not short due to PDC/PRL and BRN. Nifty moved up to PDH and came back. Short on BPB of BRN. This trade also failed to move. Stopped out. Long on BOF of LOD. Went long above BRN and Master Candle to the fluid. Target was PDH. But it went to HOD