30042012

When market spikes at open , generally two things can happen. 1. Trend will continue as a channel move 2.Price will reverse and the spike will act as a range.Today the price broke PDH and I was expecting a PB to the BO point.and was a little late to enter.In a Channel move do not expect a fast move and book profit if you can get a reasonable profit. BOF of PDH gave another long trade.
Compare the chart with the price action of 27-04.Then price spiked into a resistance and the new zone was rejecting. Today spiked well  above a resistance and price gets accepted at the new zone

Idea

Close the Gap

I own and drive cars for the last 20 years and have driven more than 2 Lakh KMs. Luckily, I never had a tyre puncture during this period. I have not changed a car tyre so far in my life time . I have theoretical knowledge reading the owners manual and also have observed  many people doing it.I hope these knowledge will help me to do it when need arises.

But there is a big gap between the two.This is the difference between how you believe to act under certain situations and how you actually act when time comes.There is a lot of difference between knowing something and doing something.Everybody knows how to lose weight. but very few do it.Everybody knows the ill effects of smoking but fail to quit.

Trading is not different. Ignorance or lack of knowledge is not the problem for many. A lot of people very well understand  how the market works and what the market bias is, but yet very few are able to put that knowledge into practice

It is the application of the knowledge that makes the whole difference.Everything that we need to know is freely available and are in public domain. Problem is  most people will never put the efforts and the time to consistently apply that knowledge in their everyday trading process

The sooner you close this gap the better

27042012

Nifty Gaped up above 5200 and moved 50 points within the first 15 minutes without giving any pullback.Break above 24-04 high failed to hold and gave a short opportunity. Those who missed it got another chance RT.  PDH and DO failed to give support. BOF PDL gave a long signal.

I had been to Karnataka on a pilgrimage with my family. We visited Kollur, Murudeshwar, Sringeri, Horanadu and Dharmasthala.and had a nice time at Maravantha beach.

Nothing has changed  in the markets. The good old decision points continue to work

Trading Naked

Trader Analysis

Market is a dual auction process where multiple buyers competing to buy from the market and multiple sellers competing to sell into the market.Price is where a seller and buyer agrees to transact.Price moves depends upon the demand and supply .Let me try to explain this with a DOM view of a trading platform

In the above example 23 lots are being offered at 10559. Nearest bid is 19 lots at 10558. Here no transaction will take place.Either the buyers should bid up or the sellers should quote lower.Suppose those who are willing to sell 23 lots at 10559 revises their order to 10558, 19 orders will get executed at 10558 and the remaining 4 offers will remain un executed at 10558 level

Now imagine somebody punching a market sell order of 275 lots . All the bids shown in the above example  will get filled and the remaining one order will get filled at a far lower price say 10300 where another bid exists.And it is a Flash Crash.

Price move is a function of demand and supply. Urgency or desperation of the participants move price.Any trading method which is not based on this reality will fail.

Successful trading is knowing where a big enough group of traders will succumb to fear and greed, and acting with or before they act, allowing their order flow to take our position to profit.

What we need is not TA ( Technical Analysis) but TA ( Trader Analysis)