Thoughts on Day/Swing Trading Part 2

[Smart_trade]

what r the chances of an failure of pivot break and eventual double bottom on daily charts?

I would rate that chance as less than 25%...but anything can happen in the markets...so we trade with our stoplosses.

ST

 

[Shantala]

Power of 9 and Reversal at 13 are 2 different phenomena on TD seq.

At 9th, we get bounce against trend, but still trend remains intact.

At 13th, we get complete reversal of trend.

So, nothing is negated and there is no question of reversal above 5700.

 

[trade4joisar]

There is no recount. The buy set up is completed in daily bars.The rally was to start on 8th,9th or 10th set up bar. Today ,14th June 2013 ,is the 10th day and I am expecting a rally.It seems to have made its short term bottom in 5700 area. How far the rally goes will decide our next course of action.

Smart_trade

Nothing is negated. The rally expected was a anti trend rally which we get after 8th,9th,or 10th set up day. It came on 10th day. This rally was there for couple of days. Now the original downtrend has resumed. We have to go down much more and next 15-20 days will be bearish, small rallies notwithstanding.

We may finally bottom at below 5500. But the exact day and levels will be known as the downmove unfolds. But that stage is atleast 15 days away...Market behaving exactly as it should, in a text book sequential pattern.

Smart_trade

Hello ST sir,

Thanks for clarification.

Actually it was my mistake, without understanding whole concept, i mis read it. And now with this message i understood what you were saying in previous message.

For sequential pattern I am still in learning state.

 

[trade4putuval]

Finally, I got this post, thanks to trade4joisar. I had a query regarding 5 minutes. Though I had already posted it in my thread, http://www.traderji.com/futures/67625-diary-315-trader-19.html#post821969, I am reposting the same here again!




Hi Smart Trade,

I have done some reading of your post, http://www.traderji.com/day-trading/49521-thoughts-day-swing-trading.html.

I have a query to raise on RCOM yesterday's trade with respect to 5 mins TF. Since the above post is already closed, I had sent a private message to you, hoping that you will find this thread and answer my queries. Traders following the above thread, if you know the answers, can also answer or provide a link in the above post which explains the scenario similar to what happened to RCOM yesterday.

Here I go....

Refer the chart of google finance in 5 mins of RCOM.

At the start of the day, there was a big white candle. Somewhere we read/understood/misunderstood that the length of the candle at the beginning of the day decides the trend of the stock. In other words, if a longer candle is formed at the beginning of the day, it means the price is targetted in the direction of the candle, meaning, upward movement for a bullish candle and downward movement for a bearish candle. Is there any such rule?

I had entered short 10 paise short of yesterday's high, but due to the length of this candle, I had to exit at 1 Rs profit. But then it went on to make a low of 114 before recovering to 120 (Respected Fibo level of 114). I would not like to make the same mistake again, hence the query!!!

 

[Smart_trade]

Finally, I got this post, thanks to trade4joisar. I had a query regarding 5 minutes. Though I had already posted it in my thread, http://www.traderji.com/futures/67625-diary-315-trader-19.html#post821969, I am reposting the same here again!




Hi Smart Trade,

I have done some reading of your post, http://www.traderji.com/day-trading/49521-thoughts-day-swing-trading.html.

I have a query to raise on RCOM yesterday's trade with respect to 5 mins TF. Since the above post is already closed, I had sent a private message to you, hoping that you will find this thread and answer my queries. Traders following the above thread, if you know the answers, can also answer or provide a link in the above post which explains the scenario similar to what happened to RCOM yesterday.

Here I go....

Refer the chart of google finance in 5 mins of RCOM.

At the start of the day, there was a big white candle. Somewhere we read/understood/misunderstood that the length of the candle at the beginning of the day decides the trend of the stock. In other words, if a longer candle is formed at the beginning of the day, it means the price is targetted in the direction of the candle, meaning, upward movement for a bullish candle and downward movement for a bearish candle. Is there any such rule?

I had entered short 10 paise short of yesterday's high, but due to the length of this candle, I had to exit at 1 Rs profit. But then it went on to make a low of 114 before recovering to 120 (Respected Fibo level of 114). I would not like to make the same mistake again, hence the query!!!

This requires a long answer. I will do it in the evening as I get some free time and also will tell you how I would trade this chart....kindly bear with me.

Smart_trade

 

[hvenki]

Dear joisar sir,
first of all can u send ur email id to [email protected] & also am eagerly waiting for shareholding data u used to post. kindly do the needful.

 

[Smart_trade]

Finally, I got this post, thanks to trade4joisar. I had a query regarding 5 minutes. Though I had already posted it in my thread, http://www.traderji.com/futures/67625-diary-315-trader-19.html#post821969, I am reposting the same here again!




Hi Smart Trade,

I have done some reading of your post, http://www.traderji.com/day-trading/49521-thoughts-day-swing-trading.html.

I have a query to raise on RCOM yesterday's trade with respect to 5 mins TF. Since the above post is already closed, I had sent a private message to you, hoping that you will find this thread and answer my queries. Traders following the above thread, if you know the answers, can also answer or provide a link in the above post which explains the scenario similar to what happened to RCOM yesterday.

Here I go....

Refer the chart of google finance in 5 mins of RCOM.

At the start of the day, there was a big white candle. Somewhere we read/understood/misunderstood that the length of the candle at the beginning of the day decides the trend of the stock. In other words, if a longer candle is formed at the beginning of the day, it means the price is targetted in the direction of the candle, meaning, upward movement for a bullish candle and downward movement for a bearish candle. Is there any such rule?

I had entered short 10 paise short of yesterday's high, but due to the length of this candle, I had to exit at 1 Rs profit. But then it went on to make a low of 114 before recovering to 120 (Respected Fibo level of 114). I would not like to make the same mistake again, hence the query!!!

At the start of the day, first candle is a large bullish candle. I am not clear whether price traded in that candle or many times due to opening gap, we get a large bullish candle.

A large bullish candle meant that the market is likely to go up...so I am not clear why you shorted at 10 paise below the top of the first candle. There was no indication of any weakness in the early stage to take a short trade....am I missing something ?

Though the market based on the first candle was looking bullish, it never could make any progress and the high of the day could not be taken out. This was the first sign that the buying not coming at higher levels. Then market went sideways and started drifting down and made a swing low around 11:00 and again attempted to take out the top...this is called "Test" but was not able to take it out the whole day and in the afternoon it started drifting down and broke swing low made around 11:00. This was a high confidence sell and the market cracked after that.

You probably sold in the morning and so you got scared because of the large bullish bar and you got out just Rs 1 below the trade price....if you had sold in the afternoon, you had more evidence that the market is weakening and would have held the position with more confidence with stop of days high or of swing high made around 12:30 and caught the entire fall.....so you short trade was right in direction but early on timing.

Having said all the above, a trader has to understand that trading is all about probabilities...there is absolutely nothing 100% certain about trading and that is why we need stoploss to protect us in a bad trade.

Hope the above helps you in your trading.

Smart_trade

 

[trade4putuval]

A large bullish candle meant that the market is likely to go up...so I am not clear why you shorted at 10 paise below the top of the first candle. There was no indication of any weakness in the early stage to take a short trade....am I missing something ?

Smart_trade

Thanks for the feedback. So I was right about the first candle being a bullish indicator.

Actually, I did not see the long bullish candle before I executed the trade. I was somewhat lucky to get the trade 10 paise below the day's high. But after executing the trade, when I checked the 5 minute chart, I found this long candle, and had the feeling that the price could head higher than my price too. So i thought it better to exit, rather than keep a SL knowing that the price can head up any time.

Though the market based on the first candle was looking bullish, it never could make any progress and the high of the day could not be taken out. This was the first sign that the buying not coming at higher levels. Then market went sideways and started drifting down and made a swing low around 11:00 and again attempted to take out the top...this is called "Test" but was not able to take it out the whole day and in the afternoon it started drifting down and broke swing low made around 11:00. This was a high confidence sell and the market cracked after that.
Smart_trade

RCOM failed in this regard. But if at all, there was a big candle in the first half an hour of the day, how do we decide whether to go long or not? One way is to enter the trade and keep the stop at the low of the candle. But if the candle is very large, keeping such a wide stop loss is also not encouraging. Your comments on this!!!

 

[HEM]

a trader has to understand that trading is all about probabilities...there is absolutely nothing 100% certain about trading and that is why we need stoploss to protect us in a bad trade.



Smart_trade

A real truth of trading.........Very well said by ST brother........:clapping:

 

[Smart_trade]

RCOM failed in this regard. But if at all, there was a big candle in the first half an hour of the day, how do we decide whether to go long or not? One way is to enter the trade and keep the stop at the low of the candle. But if the candle is very large, keeping such a wide stop loss is also not encouraging. Your comments on this!!!

After a large bullish bar, market always goes in a consolidation mode...so it goes sideways or takes a small dip...once consolidation is over and a small dip comes, and now if the market makes a new high, we have to buy with stoploss of the consolidation low.

In extremely strong markets at its initial stages, the market does not dip..but continues upward move immediately after the first bar.....in this case buying and keeping a stoploss at low of the strong first bar is not a good RR trade....here wait for a small bar, aggressive pivot, inside bar etc to give you entry on top of these bars with stoploss placed at low of the bar. Or take long trade at the close of 2nd bar if it has closed above the 1st bar high with a stoploss of 2nd bar low, some even keep it at low of the entry bar after it gets completed. All these combinations can give a high Reward /Risk trade.

Smart_trade