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. 

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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