Nifty trend
- Thread starter Capricorn
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Basket selling by some very large institutional seller executed at bid rates by institutional broker like Enam, IDFC capital etc.
No one in this world know who the seller was, who the broker was who executed the trade. Experienced traders know one thing that some large guy is swallowing all the bid and selling hugely, so exit all long trades.
When an institutional seller sells, the seller swallows all the bid rate in the order book. Within 5 minutes, Nifty Future felt from 6070 to 5976 as all the bid rates in the order book were swallowed.
Everything else is a myth. Business channels will give you a reason because it was expiry day this selling happened. On expiry day, Nifty could move up as well as it has done in past series.
Technical traders will give you all kinds of reason- 61 Fib got hit or SMA crossover or RSI hit magical 80 ! These are man made human reasons.
No one in this world knows when an institutional seller will sell or buy. Only the brokerage guys in institutional team knows it when they receive the order which is few second before the selling starts but they dont conduct their own trades to avoid conflict of interest.
But from my experience, once a trader become experienced in watching this couple of times, he knows something is wrong and he can exit the long once selling starts. He may or may not take short but with experience, he knows it is better to exit long as selling is quite intense, fast and furious.
No one in this world know who the seller was, who the broker was who executed the trade. Experienced traders know one thing that some large guy is swallowing all the bid and selling hugely, so exit all long trades.
When an institutional seller sells, the seller swallows all the bid rate in the order book. Within 5 minutes, Nifty Future felt from 6070 to 5976 as all the bid rates in the order book were swallowed.
Everything else is a myth. Business channels will give you a reason because it was expiry day this selling happened. On expiry day, Nifty could move up as well as it has done in past series.
Technical traders will give you all kinds of reason- 61 Fib got hit or SMA crossover or RSI hit magical 80 ! These are man made human reasons.
No one in this world knows when an institutional seller will sell or buy. Only the brokerage guys in institutional team knows it when they receive the order which is few second before the selling starts but they dont conduct their own trades to avoid conflict of interest.
But from my experience, once a trader become experienced in watching this couple of times, he knows something is wrong and he can exit the long once selling starts. He may or may not take short but with experience, he knows it is better to exit long as selling is quite intense, fast and furious.
Do you mean to say that on every expiry day Nifty Future goes down like it did on Oct 28?
In sept series, sept 30, 2010 was an expiry day. The Nifty Future opened at 5999, went to low of 5963.2 first in the morning session and then surged to hit days high- 6031 in afternoon. It closed at 6030.1. It did exactly the opposite it did on Oct 28.
Price moves in the direction of 'collective trend' be it expiry day or non expiry day.
There are some cold tough unknown realities of trading which the best traders have come to accept it, live with it and embrace it. This large sell order was one of them.
Doing a short in this fall depends on traders experience. Oct 19 was also a similar pattern where Nifty Future felt from 6166 to 6024 in last 90 minutes. There are many other similar patterns as well which a trader mind absorbs/internalize it over a period of time.
An experienced trader can spot this fall quickly. The experienced trader brain neurons and synapses communicate quite fast to send a signal something is wrong. So any experienced trader who is long lets say at 6040 or 6050 in nifty future will quickly exit his long. This is the practical application of Cut your losses short.
Think about it- You are a large institution and you phone your broker to sell 75,000 contracts of Nifty Future at market rate. This order will not even come in level 2 quotes or in NSE order book. Your broker will start swallowing all the bids- Like a big shark who swallow everything which comes on its way.
The selling will stop when these 75,000 contracts will be executed. No technical indicator in this world can tell that. No support will work. It will break all supports swiftly. Traders will try to catch a falling knife- Like i know many traders brought at 6005-6010 in nifty future intra day for a quick 20 points long because price has bounced from that level earlier. It breaks 6005 without any trouble and hit their SL.
Once selling starts, technical indicators will give sell signals. Technical indicators works good in these trend market. So traders see their indicators and they also join selling race because their indicator gave a signal. There is no way to verify it quantitatively which traders are following which system and at what point their system give sell signals. All we know herd behavior in market.
This is the 'collective consciousness' in the market. Each and every trader has its own support, resistance, different indicators, different way of trading on different TF. But what every one do gets aggregated in sum and is reflected on the price.
The day when i had removed all the indicators, shut down business channels and started to watch how the price behaves noting in the journal and revising them everyday, i got tuned with the collective consciousness of the market. Still a long way to go for me a trader.
Thanks for your contribution. We are all learning it together. :thumb:
In sept series, sept 30, 2010 was an expiry day. The Nifty Future opened at 5999, went to low of 5963.2 first in the morning session and then surged to hit days high- 6031 in afternoon. It closed at 6030.1. It did exactly the opposite it did on Oct 28.
Price moves in the direction of 'collective trend' be it expiry day or non expiry day.
There are some cold tough unknown realities of trading which the best traders have come to accept it, live with it and embrace it. This large sell order was one of them.
Doing a short in this fall depends on traders experience. Oct 19 was also a similar pattern where Nifty Future felt from 6166 to 6024 in last 90 minutes. There are many other similar patterns as well which a trader mind absorbs/internalize it over a period of time.
An experienced trader can spot this fall quickly. The experienced trader brain neurons and synapses communicate quite fast to send a signal something is wrong. So any experienced trader who is long lets say at 6040 or 6050 in nifty future will quickly exit his long. This is the practical application of Cut your losses short.
Think about it- You are a large institution and you phone your broker to sell 75,000 contracts of Nifty Future at market rate. This order will not even come in level 2 quotes or in NSE order book. Your broker will start swallowing all the bids- Like a big shark who swallow everything which comes on its way.
The selling will stop when these 75,000 contracts will be executed. No technical indicator in this world can tell that. No support will work. It will break all supports swiftly. Traders will try to catch a falling knife- Like i know many traders brought at 6005-6010 in nifty future intra day for a quick 20 points long because price has bounced from that level earlier. It breaks 6005 without any trouble and hit their SL.
Once selling starts, technical indicators will give sell signals. Technical indicators works good in these trend market. So traders see their indicators and they also join selling race because their indicator gave a signal. There is no way to verify it quantitatively which traders are following which system and at what point their system give sell signals. All we know herd behavior in market.
This is the 'collective consciousness' in the market. Each and every trader has its own support, resistance, different indicators, different way of trading on different TF. But what every one do gets aggregated in sum and is reflected on the price.
The day when i had removed all the indicators, shut down business channels and started to watch how the price behaves noting in the journal and revising them everyday, i got tuned with the collective consciousness of the market. Still a long way to go for me a trader.
Thanks for your contribution. We are all learning it together. :thumb:
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