A new Life, A new Career, A new Dream - I am a Trader

[jagankris]

EOD Summary

No trades today. I had intended to start the new series with a positive note but got frustrated with a huge gap again. This is coming as a serious -ve of my system. In the month of June 4 gaps have been created. And in all case except one I sat with no trade. One time I was lucky because market just opened at my signalled price. But in other cases during strong momentum Nifty is hardly retracing back to entry price. So the result is I just watch Nifty's rise/fall with no trade.

Task for weekend

Need to study the pattern during gaps in past data, need to implement this feature in my system and backtest.

I appreciate your good discipline in not trading.
Rules were already given to you

 

[timepass]

EOD Summary

No trades today. I had intended to start the new series with a positive note but got frustrated with a huge gap again. This is coming as a serious -ve of my system. In the month of June 4 gaps have been created. And in all case except one I sat with no trade. One time I was lucky because market just opened at my signalled price. But in other cases during strong momentum Nifty is hardly retracing back to entry price. So the result is I just watch Nifty's rise/fall with no trade.

Task for weekend

Need to study the pattern during gaps in past data, need to implement this feature in my system and backtest.

What's wrong with a "No Trade Day" ??

The gaps are created by the big players to cause the ordinary day trader to sink. So, if you didn't trade, it doesn't mean that you were inactive or useless. You protected your money, didn't you ?

I think that the job of a trader can be likened to that of a chowkidar - long hours of doing nothing except watching the surroundings. Damned difficult job, staying alert all the time.

 

[jain.er]

In some thread I remember reading treatment of gaps

1. If market opens above high or lower then low of yesterday then its a gap opening. Watch the high low of 1st hr and go long/short above/below it in the direction of gap.

Today if you had used this principal you would have made around 40-50 points but I had a drawdown of 10points before.

 

[Taiki]

I appreciate your good discipline in not trading.
Rules were already given to you

Yes bro, what i have observed is on such huge gap up/down days hardly trend changes and hardly they retrace for others to enter. So will implement those rules and follow them from now. Re posting them here again..

These are the rules posted by Jagan bro in Ravi bhai's thread for trading gaps

Full Gap Up: Long

If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:30 am and set a long (buy) stop two ticks above the high achieved in the first hour of trading. (Note: A 'tick' is defined as the bid/ask spread, usually 1/8 to 1/4 point, depending on the stock.)

Full Gap Up: Short

If the stock gaps up, but there is insufficient buying pressure to sustain the rise, the stock price will level or drop below the opening gap price. Traders can set similar entry signals for short positions as follows:

If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:30 am and set a short stop equal to two ticks below the low achieved in the first hour of trading.

Full Gap Down: Long

Poor earnings, bad news, organizational changes and market influences can cause a stock's price to drop uncharacteristically. A full gap down occurs when the price is below not only the previous day's close, but the low of the day before as well. A stock whose price opens in a full gap down, then begins to climb immediately, is known as a "Dead Cat Bounce."

If a stock's opening price is less than yesterday's low, set a long stop equal to two ticks more than yesterday's low.

Full Gap Down: Short

If a stock's opening price is less than yesterday's low, revisit the 1-minute chart after 10:30 am and set a short stop equal to two ticks below the low achieved in the first hour of trading.

Thanks again

 

[kr123]

all the best my friend..

 

[timepass]

These are the rules posted by Jagan bro in Ravi bhai's thread for trading gaps

I must've missed it. Taiki, can you please post a link to that particular post in Ravi's thread ?

 

[Taiki]

I must've missed it. Taiki, can you please post a link to that particular post in Ravi's thread ?

http://www.traderji.com/options/87987-day-trading-nifty-options-10.html#post821617

 

[Smart_trade]

All traders seem to be in their comfort zone of "No Trade Today"....today after gap up, market ( NF and BNF atleast ) gave atleast 3 opportunities to go long and the long trade was never under any threat till the end....nothing wrong in staying away in sideways markets...but in a trending day like today one must trade as the risk is very low on such days, market was doing nice consolidations and a thrust upwards, a classic trend day action....

Just my views after reading a few posts here....carry on with the flow of this thread.

Smart_trade

 

[jagankris]

Yes bro, what i have observed is on such huge gap up/down days hardly trend changes and hardly they retrace for others to enter. So will implement those rules and follow them from now. Re posting them here again..

Dear Taiki,

Case 1
what i have observed is on such huge gap up/down days hardly trend changes
Just would like to share a story which happened in 2004.

I just started day trading in the broker's office in my dad's account with out knowing any thing about the share markets,TA etc etc.Lost 23,000 rs in a few days.So stopped trading.But a situation came.My father didn't have F&o account but only equities.

Central elections - Final vote counting.
Every body were expecting a particular results.If results positive for a particular govt then gap else gap down.TN results were one among them.

I calculated the probabilities and I guessed that results wouldn't be positive.
So forced my cousin to go short 10 lots of Nifty but after persuasion I settled for 3 lots - 200 each.

The next day as expected counting results were announced and Nifty gap down 85 points.I covered every thing asap leaving a 55k Profit .
That day Nifty closed 32 point + :lol::lol:

That trading euphoria continued and lost the money in a few days in May17th crash due to Chimpu's idiotic policies affecting stock markets.

Case 2
-------------
Last year or before I don't remember.Nifty gap down to 5750 levels frenzily moved up to 5885 from there again crashed to 5680.

So not always markets moves in the direction of the gaps.

Gaps days are usually nice days to trade - with possibilities of sideways.
like case 1

or Frenzy highly volatile double side move.

As usual be prepared and expect the unexpected .

 

[timepass]

All traders seem to be in their comfort zone of "No Trade Today"....today after gap up, market ( NF and BNF atleast ) gave atleast 3 opportunities to go long and the long trade was never under any threat till the end....nothing wrong in staying away in sideways markets...but in a trending day like today one must trade as the risk is very low on such days, market was doing nice consolidations and a thrust upwards, a classic trend day action....

Just my views after reading a few posts here....carry on with the flow of this thread.

Smart_trade

ST, I am not really comfortable with the trending days, maybe because I am expecting sudden reversals. Trading options intraday, it is very difficult to set a stoploss because half the times the options revert to the original direction after taking out the SL .

I am more comfortable scalping the minor reversals on non trending days. Small score, but easier to identify and trade. Stuff like "if a bar of the other color pierces the BB (20,2), it will most likely hit the SMA(20) (the middle line) and maybe the other end of the BB"... things like that