Thoughts on Day/Swing Trading

[Smart_trade]

Dear ST,
You have marked three no trade zones. In second where you have marked AB C etc, does not break ant pivot. But in one and three it has broken previous PH. But trade is not taken as trend in higher Time frame is down. And no PL is broken afterwards. Hence as market goes it is seen as consolidation area. Am I correct?

Very correct ,LVG...taking trades in the direction of higher timeframe trend is a sure way of staying out of wrong /choppy trades . The longer timeframe trend was down.....so we take only short side trades.....in sideways moves, market could be consolidating or further distributing. We wait for it to speak as it comes out of sideways range and gets into a trend.There are few techniques which will indicate whether sideways phase is a preparation for reversal or further downtrends continuing, we will talk about those in due course. As per these techniques, it was very clear that the market was to trend further down....but we stay out of sideways phase where chances of whipsaws are much more and get in the trade once market clears the sideways zone.

Great going....

Smart_trade

 

[rajputz]

I owe you a thanks ST sir. Learned alot from this thread of yours. Marvellous.

 

[Satyen]

Thanks Da ........ Love to learn

Regards
Sattya

 

[Agardas]

ST Sir,

oh Guru..tussi gr8 ho


Rgds..Ranveer

 

[seetharamank]

a very wise approach to trading sir please keep posting such good ideas

 

[seetharamank]

[/COLOR]

hi ST
one small doubt here, ( hope I do not pester u too much with my 'small doubts')
would the case not be the same at around 5610.. there were 3 vertical green bars even there...

regards

Yes Anurag....we can book profits around 5610 as it not only has 3 vertical steep bars but the market is at previous resistance....once after the small dip when market takes out a pivot high around 5610, we can enter another initial position and finally book the profits as mentioned in my post.

Look at the top green bar around 5620....it is a very large bar.....probably it will have a very large volumes too , it opens at the lower end of the bar and closes at the top.....it is this candle which generally is a climax candle....all buyers have bought and short sellers capitulate and there is no one left to buy......and market comes down ....

Don't hesitate in asking any doubt...all doubts most welcome as these doubts give me an opportunity to look at things differently and think whether there is a better way and improve in the way I would trade ...so it helps me too....

Smart_trade[/QUOTE]
what a grand teacher u are sir&ur humble words make me respect u more please continue teaching us sir

 

[Smart_trade]

Today's Bank Nifty fut 5 min chart. See the gap in the pivot low which broke down and rally pivot high ,which indicated that the downtrend will accelerate....also see the creeping trend at the bottom indicating that it is time to book our gains........

Smart_trade

 

[Smart_trade]

TD POINT REVERSAL

In trading we continuously view the price action from different angles to collect as much evidence as possible about the direction and the trend the market is displaying. If we get 2-3 techniques giving us same indication, it will stack the odds in our favour.

One such technique which help me a lot in knowing the trend reversal is a technique developed by Thomas DeMark. It is called TD Point Reversal.

I am posting the same BNF 5 min graph to demonstrate this technique. For trend reversal to down , following are the steps :

1) Identify a Pivot high on the chart ( marked as PH )

2) Go back 4 bars and in the look back period of 4 previous bars find out a lowest close. ( 4 look back bars are marked as -1,-2,-3 and -4 ....minus sign is put to indicate previous 1,2 etc bars.Here the lowest close is in bar marked -3 )

3) If in next 4 bars after the PH bar, the market closes below the lowest close of 4 look back bars level, it is almost certain that the trend has changed to DOWN....

4) 2nd bar after PH bar closed below this level ( marked in red horizontal line ) thus confirming that the market trend has turned DOWN....

In today's market action many techniques such as trendlines, pivots, Oscillators,TD Point Reversal....all speaking in one voice that market trend has turned down and that stacks odds in our favour and give us confidence to go short in the market.....


Smart_trade

 

[undefined]

Dear ST,
Am trying to learn from your thread. I am attaching the same chart which you have posted, in which I have made a seperate PH (previous day). Does it signify a downtrend? Pl correct me if I am wrong. Also did the mkts not go down much from my Ph because it was almost end of trade for the day. Kindly clarify my doubt.
Regards

 

[pundit]

Dear ST,
Am trying to learn from your thread. I am attaching the same chart which you have posted, in which I have made a seperate PH (previous day). Does it signify a downtrend? Pl correct me if I am wrong. Also did the mkts not go down much from my Ph because it was almost end of trade for the day. Kindly clarify my doubt.
Regards

Dear Unidentified,
The PH you marked is actually not PH , PH should have higher low to the previous bar where as your indicated PH has lower low as compared to previous bar, it should not be considered as PH.


Waiting for ST kind comment.