i saved amit ji's post regarding this.. pasting it from my notes.
"VWAP is the Volume Weighted Average Price of a security. It shows the average price of the positions traders carry at the moment. In NOW terminal it is shown as ATP .
We play on simple technique that find out which is a side which is trapped and how much are they under water. At 2:45 the weighted average of Nifty future was showing 5035-40 whereas NF was quoting at 5085....a clear gap of 40-45 points. This means that the market is heavy at the bottom or lots of trades have happened below 5035 ......and the longs are comfortable but shorts are now feeling the heat. They will come for covering their short positions......also at 3:10 the brokerages will square off all loosing positions which are not covered by margins. So here instead of booking profits add on every dip ......the bears are dying to cover their short positions.
After 3:10-3:15 there is panic in bear camp.......the die-hard bears come to cover after 3:20 and it is adding fuel to the fire. We just have to watch market going up like a rocket.....last 20 min give us a very quick move up.......and we get best price when the bears say " damn.....cover at any price...." and that is where we liquidate our long position built up anticipating this to happen.........it is a fun to trade this move.... "
Pasted from <http://www.traderji.com/general-trading-investing-chat/96368-general-trading-chat-3405.html>
http://www.traderji.com/general-trading-investing-chat/96368-general-trading-chat-3405.html
"VWAP is the Volume Weighted Average Price of a security. It shows the average price of the positions traders carry at the moment. In NOW terminal it is shown as ATP .
We play on simple technique that find out which is a side which is trapped and how much are they under water. At 2:45 the weighted average of Nifty future was showing 5035-40 whereas NF was quoting at 5085....a clear gap of 40-45 points. This means that the market is heavy at the bottom or lots of trades have happened below 5035 ......and the longs are comfortable but shorts are now feeling the heat. They will come for covering their short positions......also at 3:10 the brokerages will square off all loosing positions which are not covered by margins. So here instead of booking profits add on every dip ......the bears are dying to cover their short positions.
After 3:10-3:15 there is panic in bear camp.......the die-hard bears come to cover after 3:20 and it is adding fuel to the fire. We just have to watch market going up like a rocket.....last 20 min give us a very quick move up.......and we get best price when the bears say " damn.....cover at any price...." and that is where we liquidate our long position built up anticipating this to happen.........it is a fun to trade this move.... "
Pasted from <http://www.traderji.com/general-trading-investing-chat/96368-general-trading-chat-3405.html>
http://www.traderji.com/general-trading-investing-chat/96368-general-trading-chat-3405.html
