Nifty Futures Trading Part 2 (Positional)
- Thread starter Czar
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- Tags acd method logical trader nifty futures nifty positional trade nifty trading vix
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An R.S.I perspective:
3 occasions r shown on the pic. each and every time we have moved up after a divergence on rsi and trend line violation on the upside of rsi line and price line as well. But can anybody see the difference between the rsi formation of present with the last 2 times? there is two type of divergence we can get in a bullish or bearish divergence.
1) bullish/bearish divergence
2) Failure swing. (which carries much more importance than normal divergence)
this is the divergence with the price line only but one bottom has to be above/below the oversold/overbought zone. This higher bottom above/below oversold/overbought zone symbolizes more strength than a normal divergence does.
so in first two occasions we have got failure swing+trend line violation on the upside. on first occasion we got two failure swings b4 price moved up and broke the t.l and gave a brkout. that's called a triple bullish divergence. more strong one.
But what we have got now in third scenario.
only one divergence (not a failure swing).
RSI successfully tasted the trend line. (is one of the finest signal in oscillators). (a fresh shorting opportunity without a doubt)
Price far away of breaking down trend line.
so, what can we conclude?
Still it's a prefect shorting scenario. If not , it's not a buying scenario at all.
Thank you.
3 occasions r shown on the pic. each and every time we have moved up after a divergence on rsi and trend line violation on the upside of rsi line and price line as well. But can anybody see the difference between the rsi formation of present with the last 2 times? there is two type of divergence we can get in a bullish or bearish divergence.
1) bullish/bearish divergence
2) Failure swing. (which carries much more importance than normal divergence)
this is the divergence with the price line only but one bottom has to be above/below the oversold/overbought zone. This higher bottom above/below oversold/overbought zone symbolizes more strength than a normal divergence does.
so in first two occasions we have got failure swing+trend line violation on the upside. on first occasion we got two failure swings b4 price moved up and broke the t.l and gave a brkout. that's called a triple bullish divergence. more strong one.
But what we have got now in third scenario.
only one divergence (not a failure swing).
RSI successfully tasted the trend line. (is one of the finest signal in oscillators). (a fresh shorting opportunity without a doubt)
Price far away of breaking down trend line.
so, what can we conclude?
Still it's a prefect shorting scenario. If not , it's not a buying scenario at all.
Thank you.
Above chart posted 22nd of oct nifty was at 3060. and now the same chart is being posted to take look at developments thereafter.
1. RSI trend line broken.
2. price trendline broken, givining confirmation to RSI brkout.
3.But this time no divergence is there, but it has given advanced brkout .(price not able to brkout previous top but RSI making higher top called adv brkout)
Conclusion: STAY out of short for ST.BUY on DIPS (DIPS is important).
NOTE: I missed out to plot RSI advanced breakout on the chart. But just watch last reading of RSI thats 36.55 and its higher than the previous 2 top where price is still below previous tops.
satyam, you are right, mathematical calculation of rsi is such that we call it leading indicator.RSI has the tendency to break TL before actual prices.
Also i forgot to mention, in S & P 500 chart we had a same rsi divergance but interestingly unlike nifty, one rsi bottom is below 30 and one above 30
Also i forgot to mention, in S & P 500 chart we had a same rsi divergance but interestingly unlike nifty, one rsi bottom is below 30 and one above 30
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