There is a substantial risk of loss associated with trading Derivatives . Losses can and will occur. My methods will not ensure profits

Friday, February 14, 2014

14022014


Nifty gaped up within previous day range. IR formed. Went short below IRL for a quick 10 point trade. TP at BRN. Thought of doing a TT at BRN. Level was so strong confluence of PDC/PDL/BRN. But did not do it. Went short on BOF of IRH. Scratched the trade when it bounced from MSP. Could not capture the down move. Double BOF of PDL gave a long signal. Nice trade of 50 points. TP at 6060 level.

24 comments:

  1. Hi ST,
    Question: Why the first BOF at 13:58 was not taken, but the second BOF at 14:09 was taken. (I am talking about your last trade)
    What made to stop taking first BOF.

    Reason: I took the first BOF scratched and took the second. Curious How first trade could been avoided ?

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  2. good evening sir today i took short position BF of IRH I did not scratch it because my SL was beyond the BOF bar and booked profit at BRN and took long position BOF of BRN and booked profit around RN today was a good day for me

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  3. xrtrader1

    Usually I enter on break of the BO bar especially counter trend trades.

    An effective BOF should trap a lot of traders. Think about what happened today.
    A lot of traders shorted below 6018 pivot low and another batch below BRN. Now the BO fails. Where are the stops?. Early shorts stops are far above. BRN shorts above the BO bar high.
    Price did not break these areas and drifted down Another break of LOD. Few more shorts.BO fails. Now where are the stops? all short term traders shifted to MSP.
    I went long above MSP riding these panic exit.Price crosses HOD triggering the stops of position traders.Further up move.
    Hope it is clear.

    ST




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  4. How Tp comes 6060

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  5. xrtrader answer is simple first BOF did not move above BOF candle watch pitcure

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  6. Hi ST,
    We all have heard if there is BOF of range extreme we can have BO of other. Today, there was a range of 6000 to 6030. First there was a BOF of range, so expected BO of other extreme, i.e. at 6000. BO again failed at 6000. Can we consider that as one of reasons to successful break of 6030? I have been observing such failures on both extremes. Sometimes BO attempt on either of the side third time becomes successful sometimes not. May i know your observation

    Thanks

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  7. Anon

    TP is Take profit area
    I covered the long near 6060

    ST

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  8. Anoop

    Nice trades.
    Focus on BOF of extremes and manage risk.Survival should be the first priority in Markets.

    ST

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  9. URD

    I dont think we can reach any such conclusions.

    It is based on a very simple assumption. In a range if price fails to break an extreme,it will move to the other extreme.That is normal.
    In case of a BOF we can anticipate a strong move to the other side as trapped traders exit. This may break the other extreme and trigger SL orders to move further.
    But if there is a lot of opposing order flow even these stop triggering will not have follow through.
    In short after a BOF, the probability of the other extreme breaking is very high. That is all.

    ST

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  10. ST,
    One more thing, Nifty spot 6000 level is missing on your chart.
    Any reason...

    Thanks

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  11. ST, excellent explanation of your BOF of BRN trade. Thanks !!

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  12. URD

    I was paying attention to NS levels. Forgot to mark on chart

    ST

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  13. Thanks for the explanation ST.
    Very clear.
    Fyi.. I have taken your system and modified it to the suite me.
    But the Basic Structure is inspired from you.

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  14. PATrader

    Other factors like critical mass plus time(ie afternoon session of weekend day) played a vital role in triggering the move

    ST

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  15. Yes, this time factor demonstrated itself last Friday also.

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  16. Kishore

    Market was falling continuously for two days and the critical mass was holding shorts. Due two weekend these people will cover and avoid two day holding risk.
    Further no body will create new short positions at the afternoon session.
    Shorting was a very low probability action. Hence I was looking to go long and did not think about shorting at all.

    ST

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  17. Sir,
    I refer to the BOF of IRH trade. 3 Swing pivots were located in the 30 points range between IRH and BRN.(at 12.00 Noon, 11.30 Noon and 10.27AM). Was there anything that suggested that this BOF move will be strong enough to break all the 3 pivots? High volume of BOF?
    Thanks
    S.Karthikeyan

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  18. SK

    Why you are bothering so much about these minor swing points?
    We have already defined a framework to trade. We trade DP to DP and Range extreme to range extreme.Price may or may not respect these swing points in between .Manage accordingly.
    While driving do not bother much about every pot holes and humps on the road

    ST

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  19. Sir,
    Thanks for the guidance.
    S.Karthikeyan

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  20. Sir,

    One humble request. Do we need to give attention on break of IRL particularly chart of 14.2.14, where IRL was between IRH and BRN in the morning session. I m getting butchered at this area.

    Regards
    Abbas

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  21. Abbas

    Sorry. I did not understand your question properly. Make it clear

    ST

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  22. Dear Sir,

    First downward movement happened in the morning and price touched BRN-PDC-PDL.
    After that it started moving upward and stalled near IRL and gave 2 signal for BOF ( as price failed to go up). I had taken trade on both the signal below breakout bar and both trade failed.
    I seek your guidance that where I went wrong and how to avoid such trades.

    Regards
    Abbas

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  23. Abbas

    PDL/PDC/BRN is a stronger level than IRL. There is not enough space for the trade to move.This is an Envelop pattern
    http://niftynirvana.blogspot.in/2012/10/brackets-and-envelops.html

    ST

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  24. Thanks ST,
    For guidance and that too with illustrative example.

    Regards
    Abbas

    ReplyDelete

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