31072014

Nifty opened below PDC and traded within IR till 13.30 Six attempts to move above PDC failed. Short below IRL .Almost stopped out by the deep pull back, but did not trigger my stop above the entry bar. Trailed and got stopped out at 7740 level. Did not attempt any other entry. The fluid created by yesterday up move worked well even on expiry day

30072014

Nifty opened within previous day range. First candle acted as IR. For a long time it was a BW around PDC. Went short on break of IRL. Covered on the BOF of PDL. Long trade on the BOF of PDL was a surprise move. Trailed till the end

Reading: Taps on DP

I am reproducing below a blog post written by Deven Malhotra in his blog . Please go through it and post your valuable feed backs on his blog.

Taps on DP

A Pattern, I have observed many times & am using it is TAPS on DP. Its coming frequently in Nifty nowadays. The criteria, I look for is:-
1) A Range Formation between 2 DPs.
2) Price starts knocking at one of the DPs (>2 times). The more the knocks, the better.
3) HL or LH formations as per the BO requirement. If the Taps are on DP above you, see for HL requirements & LH for Taps on DP below you.
4) Tails on that DP are better (For me, Tags on BB are equivalent).
5) Enter Above/ below the DP on BO.
I will give few examples without BB from recent days..

Click to read the rest

Selective Attention

Human brain has limitations in information processing. We cannot consciously attend to all our sensory inputs at the same time. Brain has its own ways to overcome this information overload. It filters out the less relevant information and process only the remaining important information for decision making.

How does the brain classify information relevant or less relevant? How do we train our brain to respond to the relevant ones and ignore the trivial? It is by selective attention.Selective attention is simply the act of focusing on a particular object or information for a period of time, while simultaneously ignoring irrelevant information that is also occurring

Discretionary trading is all about decision making. Our success as a trader will depend on the quality of the decisions we make. Ultimately this will depend on the quantity and quality of the information on which we act. Less information to process means less cognitive load and better decisions. Quality inputs create quality output.

Do a selective attention audit on yourself frequently. Critically evaluate your information inputs. Do they really matter? Are they making any difference in your trading performance? Can it be discarded? Surprisingly you will find many of the variables you use now are not contributing anything but simply creating cognitive load.Discared them

 Less is more in trading. Lifting their arsenal itself is a problem for many. How can they fight?

28072014

Nifty opened above PDC and refused to go up. IR formed.Short below IRL as FTC above IRH. TP when price bounced from PDL. Another short on BPB of  PDL/RN. Covered when second push down failed. Skipped the short below LOD as 7720 was a strong flip. Long on BOF of LOD. Expected some move due to short covering. Closed on the BOF of RN/PDL.

Share Something

This week let me share some contributions from the readers. In fact many readers have actively contributed to the method directly and indirectly.I would like to thank all my readers for their encouragement and support. The method has evolved over time and I am sure many have benefited from the concepts a lot even though they are trading different methods.

Here is another great work from our Dilipbhai. He has compiled all the posts written in 2013 in PDF format. Thank you very much ,Dilipbhai for the great work. Please do click here to download the file

Decision Point trading is  purely a discretionary method.Knowing the concepts are not enough. we need to learn to take the right decisions at the right time. There is no substitute for screen time. The easiest way is to simulate the trades on a software.

Here is great news. You need not buy expensive software and data to do this. U R Dave has prepared an excellent video on how to do this on MT4 platform. Click here to watch the video.

Ravi Rana has written a nice post in his blog  on how to extract real time data from NOW and NEST  and use it for real time charting. This will help you to save few thousand Rupees every year on real time charting.
Click here to read his post

SpacemanSpiff and NPA Trader were kind enough to share some more useful and related links. Kindly check the comments to access these links

Please do not forget to thank Dilipbhai ,U R Dave, Ravi Rana,Spacemanspiff and NPA Trader for their contributions. Be  Thankful

“In everyone's life, at some time, our inner fire goes out. It is then burst into flame by an encounter with another human being. We should all be thankful for those people who rekindle the inner spirit.” ~Albert Schweitzer

25072014

Nifty opened below PDC. IR formed. Short below IRL when three attempts of nifty to move up failed. TP On the BOF of BRN. Shorted again when two attempts to go above BRN failed.Price refused to move down. Suspected a BW and exited. For a while it was a channel move. Failed to capture the down move. Avoided short below PDL because of RN which gave strong support day before yesterday. Long on BOF of PDL. TP at the congestion area.. No other trades

24072014

Nifty opened near PDC and sold. IR formed. Did not enter on up move as IRH,PDC and BRN above the area. Short below PDC as BOF of BRN. Expected it to touch IRL. TP when price failed to continue down.
Long on BO above BRN. Could not capture the move fully. Stopped out below first pull back

Big Picture

23072014

Nifty opened above BRN 7800 and fell sharply. IR formed. Short on BOF of BRN/DO. It gave a bounce at IRL but hit the target PDH/PDC. Covered when second push down failed. Long on BOF of PDC/PDH on break of  IRL. Stopped out at trailing SL. Short on break of then LOD. Price stalled at RN 7750. Covered at a small profit. There was an order for long above PDH. Nifty jumped it. No more trades..

22072014

Nifty opened within previous day range. Went long on BPB of PDH. TP when price stalled at RN 7750.
For a long time price traded within a 10 point range. There were two BOF at Range high. Shorted the break of range low on second BOF. Covered when price bounced from PDH. Long on break of pivot high as PP after the TST of PDH. Moved well. TP at market closure.

21072014

Nifty gaped up above PDH and BRN. Entered long on BPB of BRN. Trade did not move. Stopped out. Another short on BPB of PDH. This one also stopped out. Rest of the day Nifty was in a Barbed Wire around PDH. No other trades

18072014

Nifty opened near PDL and fell. Short on the BPB of PDL. TP when it bounced from BRN. Second trade was a long on the BPB of PDL. TP when price failed to cross PDH. Shorted the BOF of PDH below PDC. Price bounced from IRH closed the trade at 9 point profit. Last trade was a PP above PDH/HOD. This trade failed . Exited at breakeven

17072014

As expected a range bound day. Nifty traded within the last impulse wave of the previous day. Attempted two trades. TST of Range low and BOF of PDH. Both trades ended as scratch. First one reached the target but I exited it when price failed to cross RN

16072014

Nifty Gaped up above PDH. There was no momentum to the upside.Price drifted down and found support at PDH. Went long on the BOF of PDH and TST of PDC. Trade did not work as expected.Long on the BO of HOD as PP. Trailed till RN 7650.

Structure and Patterns(E-Book)

For a long time I was thinking about making all the important posts in an E-Book format. I could not do it because of time constraints and of course because of my laziness.Surprisingly I received a mail yesterday morning from Shri. Dilip Patel from Gujarat. I was pleasantly surprised to see the E-Book attached with the mail..

He has compiled all the posts under Structure and Patterns into a beautiful E-Book. The book is really a professional work. Well formatted with live hyperlinks and book marks.Apart from this he has compiled all the posts of 2013 in PDF format which I will upload later

Dilipbhai, Thank you very much for the selfless service. I am sure that this book will be very useful to the blog readers.This will serve  as a ready reckoner of DP concepts and a casual read to brush up the ideas once in a while.You can download the book clicking here. Please do not forget to thank our beloved Dilipbhai..

11072014

Nifty opened above PDC and moved up. I was looking to short as I was bearish. Short on BOF of BRN 7600. As expected price moved to IRL, the FTA.TP at IRL. Price moved up and tested the BRN thrice. Last one was a minor BOF. Shorted to cover the trade below PDC as price stalled. Tried a long on BOF of BRN. Covered when it failed to cross RN 7550. Avoided short trades as Nifty was down 150 from days high. Being friday I did not expect any commitment from traders
I will be back only on Tuesday.Driving to the hills.This time Romancing the Rain at Wynad

10072014

Budget day. Did not trade the morning session. I was watching the budget live on TV. When I came back Nifty was at  7750. Gave a nice BPB of BRN 7700. Trade was a little risky at 20 point loss. Still went on. Initially it scared me for a while but later fell like a stone. TP at 7550 at close. nice 150 point move

09072014

Nifty opened near PDL/PDC. IR formed. Short below PDL as bias was bearish. Price broke BRN but failed to continue. Covered the trade when second push down failed. As expected Nifty traded in a wide  range with PDL and BRN in between which acted as barriers. BPB od PDL short moved to LOD as expected. BOF of BRN long trade stopped out below BRN 7600

08072014

I could not trade today due to some other work. In hindsight market gave some good opportunities to go short. Even if somebody took the BOF long at PDL, market gave so much time to exit without damage. There was some choppiness during budget and here a BO below the then LOD failed

07072014

Nifty opened above PDC/PDH. .Price tried  to go below but failed. Long on BPB of PDH/PDC/BRN. trade failed Exited below BO bar low. Did not go short below BRN as expected a range. Rest of the day Barbed Wire around PDH BRN. no other trades

Three Thoughts

Trading is just like any other profession like Medicine, Law, Accounting, Teaching and Engineering . It is all about skill development. But unlike trading, these professions have an advantage. We can always conceal our failure and mediocrity there. We can always put the blame on others and situations .We rarely suffers due to our mediocrity and inefficiency. Our client or our employer always suffers. Just think about this for a moment. How many people you know, excel in their chosen professions?

There is no such escape routes in trading. We just can’t conceal or hide our mediocrity and inefficiency. Our account will shout it louder. There is no other way but to shoulder the whole responsibility for what has happened. Have you ever thought why most of the traders fail miserably in markets? Let me share some random thoughts.

Every other profession has a well defined knowledge base and curriculum. This knowledge is taught systematically for several months or for many years. There are evaluation methods like tests and examinations to ensure that the students have absorbed the knowledge well. Unfortunately, we traders have no such knowledge base. We have to build it on our own and most of the times we end up with wrong methods

In other professions, after learning the basics, people undergo rigorous training under expert supervision. Doctors undergo clinical practice. Lawyers begin practice as juniors to an expert lawyer. Accountants do article ship and teachers go for education training.

Trading is the only profession in this world where you read a book on weekend and start betting big money on Monday. 

Finally think about how much money we need to spend on education to land up in a good profession. We may need to spend several lakhs to become a specialist doctor. How much we need to spend for an engineering degree and a reputed MBA?. Here in trading, people are not willing to spend on education and pay tuition fee to the market. Everybody wants to mint money from day one.

No wonder, people find it difficult to survive as a trader. There are no short cuts. Select a method with an edge and get yourself trained. Be ready to pay some tuition fee to the market.

04072014

Nifty opened within previous day range . IR formed. Short on BPB of PDC/IRL on break of PDL. I thought it will run through the fluid below BRN. TP at BRN. Long on BOF of BRN which was a minor PP. As expected met the target PDL, which was also a powerful Flip. Long on BPB of PDL. Then it was just trailing through RN , HOD and PDH. Covered at 7780.

Methodology

A recent webinar by Dr. Brett Steenbarger (part). Listen to it
Methods trump Markets

03072014

Nifty gaped up above PDH. Failed to go above IRH which was NS RN. Short on BOF of PDH on break of PDC/RN. Price suddenly reversed and could not capture anything other than brokerage. Then it was a range move all the day. Went long when  the third attempt to go below the range failed. This one also ended as a scratch.

02072014

Nifty gaped up above PDH and BRN 7700. Went long on BPB of BRN. Covered when price fell below NS BRN. Did not take any other trade as price was ranging with NS BRN and RN 7750 in between.

01072014

Nifty gaped up above PDC. There was a BOF at PDH.Shorted below the MC. Target was PDC.Trade did not work Stopped out above PDH. Skipped the long trade as it was a trade to all time high from where a 200 point fall started. Entered short on a BOF of range high . I expected the trade to run as critical mass was long and trapped . But price bounced back from RN/PDH area. Scratched. Both the trades did not work.