Thoughts on Day/Swing Trading

[AW10]

Wow, that is another piece of gem from you ST. I am certainly taking this piece of input for my next system. Thanks.

My 2 cents on the location of these bars.. First circle was at the second bottom of typical double bottom reversal. Similarly, second circle has the supply zone on left from where price dropped earlier. IMO, the setup that you have given are supported by such reversal point /patterns, then we should be getting higher odds in our favour.

Happy Trading

 

[murthyavr]

Inside Story

The trading idea which I am sharing this week is a very powerful idea and I have used this idea to book profits and initiate new positions. As Nifty futures gave examples of both long and short on the same day ....ie on Friday 17-JUN-2011 , I thought of sharing the same with you.

Price Action study is nothing but study of price bars to judge the strength of bulls and bears and many times the price bars reveal the "Inside Story" of the fight between bulls and bears. As traders we just have to read these signals in time and join the dominant or more powerful group,bulls or bears....

The chart posted is 5 min Nifty Futures chart of 17-JUN-2011. The market has been trending down and look at the price action in the bottom circle. You see 3 skinny and leggy bars with long legs . What does this mean ? It means that the market is attracting buyers at lower levels and the prices snap back.....and bears are unable to press the market further down.Now see the bar marked as A in that circle....it is a bearish bar which closed into the wicks of earlier bars but a clear down close bar....this is the last attempt of the bears to pin the prices down...and the next bar bounces back and proves that bears got exhausted......once we broke the high of the bar A ...we knew that the short term bottom has been in place.

Look at the top circle......the bar preceeding the bar marked as B is an inverted hammer with a long tail......it is something like a 60 Kg weightlifter lifting 150 Kg weight and suddenly dropping it.....the bar marked as B is a bullish bar which has its high lower than the earlier bar and is a last attempt of the bulls to once again lift the weight....and once low of the bar B was cracked we knew that the bulls gave up.......

These are trading ideas and not proper trading methods/systems.....but they can be incorporated in your existing trading methods to give you an edge in the market.

Smart_trade

ST:

Is this something like the Last Engulfing Pattern of Steve Nison in his 'Beyond Candlesticks' book (1994)?

As per Steve Nison, any bearish engulfing pattern during a price decline has bullish implications and vice versa.

 

[adityasaraf007]

ST Sir and all the other senior members......... one request from my side

How did you trade/ would have traded Nifty today........ What was going on inside your mind during this roller coaster ride......... If the trades were based on any proprietary system, just mention that the trade was taken because of it........ no need to disclose the system...........

Specially, did you take any Long trades and where...... how were the stops decided........ etc. etc.........

I hope you got what I mean to say........ I know I am asking for too much......... But.......... Please share your experience, as these sort of day's don't come very often..... Please share if your time permits........ No hurry from my side.........

Your post would give a lot of hidden insights and would let us know about what should be the psychological makeup during such events..........

Aditya

 

[Smart_trade]

Every method will have trades at different places....but as general guideline, the trades are as under :

1) Sell in 9:25 bar, add below 9:45 low.....cover short positions around 5200 ( why ? because it is a major support at Feb 2011 lows at 5180.....and today market bounced from there)

2) Buy a small quantity above 10:25 high....because of steep fall and bounce back from support....but remember that this is an anti-trend position.....so bit cautious here...sell below 12:05 low.....

3) Short below 11:45 low and hold till the end.

At one stage it looked as if we would have a major collapse resulting into down circuit ?? Worry was to get proper fills,server lines not getting jammed when we have to cover,computer does not hang.....etc.....but after 11:00 it was a calm market....

Smart_trade

 

[adityasaraf007]

Thank you ST Sir for the reply......... I seems that you were very calm throughout the day......... Well, a true mark of a professional trader.

Okay, coming back to your reply......

In point no. 2, you said Sell below 12:05 low ------ I think it's a typo

In point no. 3, would you have taken a Long (probably above 11:20), if the markets continued rising after 11:45 pivot low.

With regards,
Aditya

 

[Smart_trade]

Thank you ST Sir for the reply......... I seems that you were very calm throughout the day......... Well, a true mark of a professional trader.

Okay, coming back to your reply......

In point no. 2, you said Sell below 12:05 low ------ I think it's a typo

In point no. 3, would you have taken a Long (probably above 11:20), if the markets continued rising after 11:45 pivot low.

With regards,
Aditya

Aditya,

Sell below 12:05 is correct ...no typo error there ....the reason for this sell is that by this time it was clear that the downmove from 11:20 high to 11:45 low was not a bullish flag and the upmove is probably over...so sold our long position below the low of that 12:05 bearish bar.

If market continued rising after 11:45 Pivot low and taken out 11:20 high....I would have gone long...

Smart_trade

 

[adityasaraf007]

Got it......


Thanks and regards,
Aditya

 

[Smart_trade]

What makes the markets to go up

Markets go up and down and have we ever thought of what makes the market go up ?? Todays market was a very strongly uptrending market. Do we get any clue about such strong markets in real time ?

Markets go uo on money inflow and it goes down when the money is sucked out from it ...so the strong buying pushes the market up. No amount of intelligent analysis, brokers tips, financial news channels wish talk, greed and fear of the market participants will take the market up. It is only strong buying which will take it up.

When the strong hands buy or sell, they may try to hide their real intentions but they cannot erase the trail. They walk with heavy boots and leave behind impressions in the sand which they cannot hide/erase.....I am talking about the volumes...the volumes reveal the market's hand.

I have posted today's 5 min Nifty Futures chart. I have marked uptrend and corrections by red vertical lines.When the market opened, observe first few bars....the volumes are 2-3 times the normal volumes of earlier day. This indicated right in the beginning that we are going to have some fireworks today. Today's market had all tell-a-tale signs of a strong trend day.

See the correction marked by red vertical lines.... observe the angle of these corrections, a shallow correction with volumes dwindling down to 1/3 of the trending period volumes....and when the correction gets over and on breakout volumes surge again this indicated that this upmove is going to sustain,it is durable...we had two such corrections today and many small 1-2 bars dips....

All the action necessary today was buy, add on every breakout and trail the stops to the black supports shown and let the market do the work. Last 30 min rally , even the bears came to help the market to go up by last minute short coverings.

We are traders...neither permanant bulls nor parmanent bears...we just join the more powerful side and relax....and today more powerful side was unarguably bulls.......

Smart_trade

 

[Agardas]

Such a Hardcore Disciplined person and down to earth human being.
WOW ST

 

[krish4166]

Yes we are lucky to have ST and am also lucky to see his threads luckily on Traderji. Let all old, new, winners and losers traders now be more on higher probability profitable trades.
Happy Saturday.