28082014

Nifty opened near PDC and moved up. Went long on the BPB of PDH/RN. Trade did not move. Scratched. The last impulse acted as a range for the whole day. Did not trade the afternoon session due to expiry.

27082014

Nifty gaped up above PDH. IR formed. Nifty traded within this range almost all the day. Could not capture the fall. Skipped the BOF od PDH as it came very late. But it moved well through the fluid. No trades today

26082014

As expected a range day. Market formed a Barbed Wire range within last down impulse. Tried a short on BPB of the range. Scratched . Skipped the long as there were too many levels above it. BRN, PDL and PDC

25082014

Nifty opened below PDH and moved up. Long on BPB of PDH. The deep pullback hit my stop. Could not get any reliable signal to enter long again . Went short on the BOF of range high/HOD. This moved well Trailed till PDL and exited. Market has not forgotten how to fall.

22082014

Nifty opened above PDC . Traded in a 20 point range the whole day between IRL and PDH. Tried a BOF trade of IRL. Scratched it when price failed to go above PDH. Being weekend expected some nice move  near closing. Nothing happened

21082014

Nifty continued to trade within previous day range. A Barbed wire around BRN 7900. Tried thrice to escape from this range and failed. These three BOF of range extremes gave good trade opportunities.

20082014

All the day price chopped around and made a barbed wire around BRN and PDL. Attempted a short below PDL on BOF of Range High/BRN. Stopped out

19082014

Nifty gaped up above PDH/BRN and traded in a 20 point range the whole day. Attempted two long trades.BPB of BRN and BPB of Range High. Both the trades failed immediately on entry.

18082014

Nifty opened below PDC. went up breaking  PDC/BRN  and PDH. Long on BPB of PDH. Stopped out when price bounced from all time high. It was a TRAP pattern, a BOF of MSP. Did not enter til price moved above the all time high. Went long on BPB of RN as I expected the bullishness to continue and there was no overhead resistance TP at 7875. Type one trend day.

14082014

Nifty opened above RN 7750. Missed the up move. Rest of the day it was chop within BRN and PDH. Tried two short trades both counter trend trades. Stopped out of these trades.

13082014

Nifty opened below PDC/RN. Unexpectedly broke above PDH. There was no follow up buying and went short below RN 7750. trade refused to move beyond IRL. Covered at a small profit. Another short on the second BOF of PDH. It broke IRL and stalled at NS BRN. Covered when second push failed. Tried another PP trade long . This trade also did not move as expected. Bounced from PDH/PDC area

12082014

Nifty gaped up and traded in a 20 point range for a long time. Went long on BOF of range low. Exited the trade when price failed to stay above the range and broke the BO candle low. Price refused to come down and broke the range high again. Long on BPB of range high. Ignored BRN as waiting for its break will increase risk. TP near RN at the end of the fluid

11082014

Nifty gaped up 50 points . Bias was positive. Still tried a short below IR as price failed to continue above the opening bar. Scratched when price bounced from NS BRN area. Rest of the day Nifty traded within this 20 point range. Did not attempt the last BOF trade of LOD as it came very late and it was the best opportunity of the day

Taming the Trend

To trade the markets successfully, we need to define a structure for the market and also need to align with the trend. Unfortunately there is no way to correctly define the structure and the trend. All the technical analysis is an attempt to do this.

My approach is based on two assumptions.

1. There are two kinds of players in the market. Day Traders and “Other Traders”. Day traders trade intra day moves and never hold overnight position. Other Traders are willing to hold their positions and not interested in small moves like Day Traders
2. All the traders basically attempt to buy low and sell high in the market. Day traders play with smaller time frame charts and others go with Daily Charts.

I will try to explain it with the help of a picture. 1,2 and 3 are Daily candles making lower highs and lower lows. Daily chart is in micro down trend. Today, on the fourth day game will be played within candle 3 which may act as a range. I have shown the enlarged view

Break above PDH will be a major transition as daily will change to rally mode. Our expectations are a ranging action inside the previous day candle or a breakdown below PDL if selling continues. We assume “Other” traders will sell in force near the top of this range.

Look at example “A”. As range traders we try to buy the lows and sell the highs. As price is trading in a higher range, we prefer to buy the lows to go with the trend. Expect opposite order flow from “Other” traders as we approach the PDH. Do not expect these trades to run. Once price breaks down from the higher range to a lower one we try to sell the highs. Here both the groups are selling. Let our profit run.

These are all some guide lines. Do not make it a rule. Sometimes even if our trade is well aligned with the trends the trade may not be a winner. Look at situation B. Price gaps below PDL.Day Traders stay with the trend and short the range low. BO fails and reverses back above PDL Trapped day traders order flow will trigger a momentum up move giving great opportunity to the “Other” traders to sell into. This will trigger another down move trapping longs this time.

Market is never going to give us a static edge. Knowing well what is going on and changing the tactics as per the situation makes one a winner. There is no substitute for screen time experience.

08082014

Nifty gaped down 80 points from previous day close. It was 140 point fall from yesterday evening. I was not expecting much fall again today . Price never came above IRH. Attempted two trades BOF of Range High/BRN. and a BO below LOD. Both trades did not work.

07082014

Nifty opened near PDL. Got rejected. Avoided long as PDC and BRN was close. Short on BOF of PDC/BRN. Target was LOD. Price broke PDL and consolidated below it. Exited the trade. Long on PP when price came back to the old range. TP near 7730. Missed the down move as I expected some consolidation and attended some other work.There was a BOF of LOD . Did not go for it

06082014

Nifty gaped down below PDC. IR formed. There was a BOF at PDH. Went short when the move broke IRL. Scratched when price bounced from NS BRN. Attempted one more short below NS BRN level.Exited when price chopped around BRN 7700.

05082014

Announcement day . Nifty traded within the previous day closing range. There was some chop during announcement. Skipped this BOF of BRN and range low. Waited for the market to stabilize. Went short on the BOF of PDH. Nice down move. Exited when price moved above the pull back high. Nifty stalled below the range flip for a long time and gave a nice PP long trade  above BRN. TP around 7775. Done for the day. Traded on battery back up . No power since morning.

04082014

Nifty opened within previous day closing range. IR formed went long above IRH as three attempts to fall below IRL failed. Nifty stalled near BRN and drifted down. Exited at a small profit. Tried a short below IRH as BPB. Trade failed stopped out above the pull back swing high. Long on BOF of IRH. Trailed and stopped out below BRN. Could not capture the last leg up.

Gift from Dilipbhai

Here is another great gift from our beloved Dilipbhai. He has chosen the right occasion. First Sunday of August being  the Friendship Day. I am sure all the friends of Nifty Nirvana will find it useful, will love it and cherish. He has compiled all the postings under "Rants n Raves" into a well formatted E-Book with great effort.

Dear Dilipbhai, Thank you very much for your contribution.God bless you.

You can download the book clicking the link. Kindly give your valuable feed backs. Please do not forget to thank our beloved Dilipbhai and please do share this through your social networks.Thank you all

Download

Practice Patience

Recently I checked a live discussion of the method just to know how well it worked. It was during market open. To be frank many people are not approaching trading the right way. They bring in their day job culture to the trading desk.

In our day job we are supposed to start doing work immediately after switching on the system. Just idling and watching is not considered as work. Traders are so impatient and need to trade desperately on market open itself. They jump on to a mediocre trade and lose. Then hesitate to take the next best opportunity. Fear of missing out sets in and they  impatiently  enters another trade and get stopped out. This cycle goes on.

Further everybody wants their trade to play out immediately. They have no patience to sit tight and trail. Every small adverse move drains their patience and the trade is exited well before extracting its potential.

I do get a lot of mails from many new traders. One question is often repeated and they want to know how long it will take to become profitable. Frankly, I don’t know. It may take a few weeks, months or years. But people are so impatient that they start to complain after a week of live trading. Many of them might have shifted to some other method losing their patience, I am sure.

Impatience has become the basic character of the generation. We need everything to be instant like Instant messaging, instant information, and of course instant food. We want everything and we want it now. We have no time to learn the method. We have no time to wait for good setups and we have no time to wait for the trade to play out. Please do understand that this impatience is a derivative of fear and greed, the cardinal sins of trading.

“One moment of patience may ward off great disaster. One moment of impatience may ruin a whole life” — Chinese Proverb

01082014

Traded the August chart. Nifty gaped down below PDL. IR formed. Did not trade the area between BRN 7700 and PDL 7750 as this area was PDC and PDL in continuous charts. Nifty sold touching PDL. Went short below IRL. After a scary pull back it was smooth ride till NS BRN level.
U R Dave has posted his trade journal for the month of July.Great going URD. Congrats ( Read )