Nifty Futures Trading

[uasish]

Sunil,

I use 1 min chart when i trade with RSI 9,that also mostly scalping.Let me give an example,suppose there is a sudden up-burst of Nifty Fut in a straight vertical fashion for 15 points,instantly there will be a 3-8 points retracement (only when it is not surpassing a known resistance point,in case of known resistance-point-breaking-vertical-rise ,this will not give 90 % win rate,other than those cases)OR a 1-2 min (in Time axis correction) stalling in a 3-5 points range,there in those specific stages the RSI will react slowly & show divergences,here the funda to trade is ,if i see price again going Up & the RSI also doing the same but unlike Price RSI's up motive is with less vengenance,then when Price is near or on it's immediate past High & RSI is FAILLING TO DO SO,then 9 out of 10 cases a BUY gives few scalping points,here my 50 % exit is when RSI touches it's past immediate high (the same very act Price has done earlier & i am already in trade with 20-25 points Gain where as RSI is going it now).
Reverse is for Short trades.

Asish

 

[TrendPlayer]

Thanks to all who are trying to make RSI divergence clear..just thot of adding this:

RSI bullish and bearish divergence:

RSI was designed by Wilder to anticipate price changes rather than merely react to them. Wilder comments "When divergence begins to show up after a good directional move, this is a very strong indication that a turning point is near. Divergence is the single most indicative characteristic of the relative strength line."

Bullish divergence occurs when a stock or index makes a low high in price and the RSI indicator makes a higher low. Bearish divergence is just the opposite -- price will make a new high, but RSI makes a lower high. Typically, bearish divergence is marked by a rising trendline above the price action and a falling trendline on the RSI indicator and visa versa.

The reason this divergence occurs is built into the calculation of RSI. The formula divides the average up closes for a period by the average down closes. Bearish divergence will usually occur in the following manner. A stock will have a strong advance where the average up closes sharply outweigh the down closes. A peak will then be reached in both price and the RSI indicator. The stock will then have a mild sell-off, or perhaps move sideways for a few days. When this selling and consolidation occur, RSI will decline because the average days up/average days down figure decreases.

Finally the stock again rallies and tests or slightly exceeds its previous high. Because the RSI calculation includes the period of decline and consolidation, it will be lower than the first RSI peak. The opposite will hold true for bullish divergence. In visual terms, after a strong directional move to the upside, traders should be suspicious of a prolonged consolidation. Such a formation will always mark a period of RSI deterioration. The opposite is true as well. After a sharp down move, horizontal consolidation will lead to an improvement in the RSI number.

When the swing trader sees divergence, he or she should become alert to the possibility of a significant reaction or even a reversal in trend. It should be cautioned, however, that bearish RSI divergence in itself is not a sell signal. The swing trader should wait for a signal in price, such as a moving average crossover or break of a trendline, before taking action.

 

[Sunil]

To Sunil,Vineet & other seniors,

Any body using Avg traded price or tick average in decision process as a filter or reference point etc,
I sometimes use it as a concurrence indicator for taking up spring trades or w trades (say price takes out previous lower low after setting up current low on higher side)
Backtesting is next to impossible because tickavg is dynamic through out the day,
Your views will be appreciated.
Thanks
Raju.

Raju,

As mentioned, I did remember that something similiar was mentiond by Asish Da...

I found this post about Median Price by Asish Da in our Library Thread.

Also, please take note of this edition of the above post here

Were you looking for this?

Seems I missed something unique & interesting...
Please throw some more light or with an illustration in live trading hours...

 

[Sunil]

dear sunil...
i have a feeling you got it wrong,please correct me...what you have in charts is an example of a regular bullish divergence and not a hidden bullish divergence...
plz correct me if i am wrong.imho,the regular bullish divergence and the Dragon Fly Doji gave a great entry for traders......

thanks,all the best and keep up the good work

oops...!!!
You are right, L2T...
I got the nomenclature wrong....
That's indeed a "Regular" Bullish Divergence

Infact, I had missed browsing this website properly, which you had posted in this thread on 3rd Dec, due to that Nepal (CFA trip). It has answered some of my personal queries too...

dear columbus,

http://www.babypips.com/school/hidden_divergence.html

hope this helps

All those who are interested in knowing more about this oscillator divergences, should visit the above website...

L2T, I would like if YOU could copy & paste its contents in our LIBRARY thread, whenever you have free time...
or, if u feel, even a simple mention about the website link will do...

 

[Sunil]

In EOD charts, we see lower tops & higher bottoms formation...
I cannot really call it a symmetrical triangle or a pennant...
A sort of ascending triangle may be reasonable with the neck being at spot 3110-3150 region. Spot 3110 is the first crucial double top resistance, before we think of higher levels.
RSI(14) at Friday's close:
5min = 40
60min = 78 !!!!

Today, bulls would really like to see the gap up being sustained..

Oh yeah... come to the battleground

 

[kalwarik]

sensex 10000 plus wow

 

[Sunil]

In EOD charts, we see lower tops & higher bottoms formation...
I cannot really call it a symmetrical triangle or a pennant...
A sort of ascending triangle may be reasonable with the neck being at spot 3110-3150 region. Spot 3110 is the first crucial double top resistance, before we think of higher levels.
RSI(14) at Friday's close:
5min = 40
60min = 78 !!!!

Today, bulls would really like to see the gap up being sustained..

Oh yeah... come to the battleground

Yummy, tasted blood (literally) early in trade (more TSQs also helped) + 3092 (friday's HOD was given the respect it deserved)

 

[learn2trade08]

good morning...
shorted nifty at 78 stop at 83....counting on luck this time.
oops all the best.

 

[Sunil]

if LOD breaks now, then 5min charts will suggest LH LL setup, with well-defined trailing stops...
gotta wait

 

[rajuwaste]

good morning...
shorted nifty at 78 stop at 83....counting on luck this time.
oops all the best.

Based on fibonacci l2t isn't it