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

Tuesday, March 10, 2015

10032015

This is an illustrative example of the concepts being discussed.Markings are just visualizations on historical data in hindsight analysis 
Nifty opened within previous day range. long on BOF of PDL/PDC. TP when it failed to stay above BRN. A short of BOF of BRN did not move and trade got stopped out. Next TST was a good opportunity, but missed. Shorted the break below PDL. But could not capture the full move. Did not attempt the BOF of LOD

30 comments:

  1. ST,

    I Didnt understand your first long trade without confirmation and against trend. The 10.15 bar was long legged doji and 10.18 bar also have wick above. so not a strong rejection . it took three bar to move above 10.12 breakdown bar.. what made to to take counter trend trade on weak signals. i missed it completely.

    Secondly . What made you take 3rd trade short . near morning range low. and the down move already coming from 8800. dont we expect failure there to take longs?I also missed this trade too.

    Thanks and Regards
    Bharat

    ReplyDelete
    Replies
    1. After a trend day price usually will consolidate within the last impulse for a while
      Then it may break down or reverse. On 05032015 same thing happened. BOF itself was the confirmation. I was not confident to take a blind entry. Price tested the bottom thrice and the fourth attempt also failed
      Momentum moves usually will have two legs. Price was entering a new area and expected some stops below then LOD

      ST

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    2. Sir

      It is regarding "Momentum moves usually will have two legs." Today there was a momentum move from the top with one leg of the momentum move from 8781 to 8737, and second leg from 8763 to 8727. Is my understanding correct?

      URD

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    3. Yes. But we cannot capture these kind of moves.
      Ideally the fist leg should cross a DP and pull back need to stall at this DP. Look for a TST/BPB short
      Alternatively it can bounce a little from a DP and second leg runs breaking DP and early extreme. Look for a BO
      In type 2 always there is a danger of reading this as a BOF. So wait for confirmation before going for a reversal trade against a momentum move
      Today market is not respecting levels well. despite the sell off in Dow market is holding but choppy. Current up move is not respecting flips. I wonder what will happen at HOD

      ST

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    4. Sir,

      Thanks for it. But can't we use this information to our benefit while managing the trade?

      URD

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    5. Sure. The defined structure of a trader cant accommodate or explain every move that can happen
      So we need to stick to our own frame work and attempt only those fits our plan. We will always miss more moves that we can capture

      ST

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  2. ST
    my first trade was same as of you but short trade i could not initiated even prev day close BOF last long system rejected my long at 8726 how i will improve my thought process please guide

    ReplyDelete
    Replies
    1. Nothing more to learn. keep practicing
      http://jamesclear.com/learning-vs-practicing

      ST

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    2. Sir

      That is a very good article. Very well explained, the importance of practicing. I can correlate it. Thanks for it.

      URD

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    3. URD

      I am a fan of James Clear.
      My E-Book was the result of his challenge. AFAIK , I am the only person did it among his readers
      http://jamesclear.com/writer-challenge-2013

      ST

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    4. Sir,

      And that E-book was a gem. Congratulations for the achievement. You always have been an inspiration for me.

      URD

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    5. Thank you sir for this nice reference. That blog seems to be really great resource.

      Delete
  3. there is good short opportunity near TST area .why didn't you attempt short there ?

    ReplyDelete
    Replies
    1. I hesitated as my earlier short failed

      ST

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  4. Dear ST

    Thanks for the chart.
    Question: Do you draw all lines like PDL, PDC, PDH, DO, RN & BRN on chart every day morning.

    Thanks
    Raju

    ReplyDelete
    Replies
    1. I wont draw it full. But will mark them all with small lines a little left to the current candle

      ST

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  5. ST,
    For your 1st trade ... where you marked TP, why its not a pull back of BO BRN but TP ?

    ReplyDelete
    Replies
    1. It was a CT trade and when it broke the swing low I exited

      ST

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  6. Thanks for the Chart ST Sir.

    how to confirm about the LOD? is that confirmed by , the price is already down about 100 points and 2nd time TST at 8720 area strongly rejected?

    Neethi

    ReplyDelete
    Replies
    1. Real LOD cannot be confirmed till the end. Actually it happens as a FTC
      That is a BOF of price extreme after an extended move. Trades are kind of blind ones

      ST

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    2. Hi st,
      Why didnt u mark irh today
      I didn't take your second trade because of irh


      Kishore

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    3. 10.30 up move enveloped it. Then focus on the new extremes

      ST

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  7. Hi ST, for the last short, what made you choose entry below 1:21 bar instead of below 1:24 bar or 1:15 bar . Thanks for your help.

    ReplyDelete
    Replies
    1. I wanted the price to fall below PDL.FTA was RN and wanted an early entry to ensure some space
      I thought a few stops below 1.21, the pullback low after the bounce will take price a little further to trigger stops below 1.15

      ST

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    2. Hi ST,
      Would you please post the possible trades and exits for 9th? Thanks.

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    3. Good morning ST. reminder :)

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    4. http://screencast.com/t/SbUuqP3zG2TL

      ST

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