Dear Mr.Rkkarnani,
I understand that if we are in long position & on the day start if Daily candle is not touching 3 EMA then you have booked profits & entere again on touch of 3 EMA on the same day.
My query is -
1.How to decide on the distance away of open & 3 EMA value?
2.Is there any criterion on which we should deicide?
3.Is this exit needs to be done on day open or at 1525 hrs?
Kindly reply.
Regards
Sorry to jump in here but its an interesting question and I would like to share when/how to book based on 3 EMA.
The thumb rule says that book profit at open if markt opens away from 3 EMA ....note 3 EMA value at the point of booking .. re-enter when that point is reached by NF.
It also depends on how big the gap is between 3 EMA and price .. I think I have explained this in the past also ... if the difference is only 20-30 points .. no point booking ...but if the difference is more than 50-60 points.. then it makes sense to book immediately and wait for a retracement.
The only tweak I have introduced is that if this gap away happens very early in the trend (i.e immediately after the entry signal of 315) ..and if the market has been in a congestion zone (i.e we have had 2-3 whips in the past) ... in this scenario mkts usually trend very strongly and can gap up and keep moving up (or visa versa) without retracing. In that scenario dont book at open .. wait for 3.25 PM and then book.
Mkts have clkosed above 5140 today so the 315 longs are in 150+ point profit.
Rkkarnani - yesterday was a good day to buy or ADD as if you see Nifty took support at 15 EMA and that 3 EMA was not touching yesterdays candle. So today an upmove was anticipated anyways ....
Cheers
SH