let us take an example:
What happens if MDP gives a data tick as 401 with high volume instead of 398 as that of ESignal. Let us assume that previous resistance is at 400 and The chart definitely gives a breakout signal. So the consequence of trading on false data .......
A reason we use filters is because resistance in not a price level but a price zone. If the previous resistance was 400, then we need a bar close above this with volumes, to confirm it as a breakout. If the high made is 398/401 and next bar retraces, its not a breakout...
I'll give u personal example... I went short at 4908 and the previous high was 4910 and i used 4912 as my SL, the SL got hit and it got executed at 4912.45. I again went short at 4906 and then it ran in my direction. MDP reported the high as 4911. It missed a few tick and my order was one of them.
The question here is, is it MDP's fault that i lost 4 points( plus brokerage) ?
No, It was faulty SL placement. Market just made a high of 4927 and then made a lower pivot high of 4910. My hard stop should always be one pivot higher when trading very narrow range. In a narrow range, there will be spike that attempt to hit SL just to force a direction swing. My ideal hard stop was 4927.... I put the SL too close and Nifty ate it just to remind me about my own rule. He charged me 4 points for the service rendered.
Even six months back, i would be so pissed off at getting my SL hit that i would not be able to re-enter at 4906. I would curse and blame everyone (but myself ) for my loss.
Six months back, I would mess up the day because of the 4 points, I would be hyper upset and end up not taking any more trades. Now a days, the same incident is just a nice story to tell new traders...
If MDP misses a few ticks and Esignal gave all the ticks... would this chart look different....?
