Thoughts on Day/Swing Trading

[respectinvestor]

@smart_trade...trying to be of some utility....I read your posts from the beginning...damn good..

a/c to me DLF is a sell and an attempt can be taken on DLF on the short side

at the same time I may be wrong also...but I do have logic for my trade:

Logic of the trade is following:

DLF today has made a bearish harami pattern on daily charts ...and this pattern has more significance at the top of an uptrend ..considering that DLF has rallied from 192 to 226 in a very short span of time ...

DLF is below its 200DMA @233...SO the stock is in an overall downtrend

Today and even yesterday the stock has made a 8 day high ...

on hourly charts the stock is out of overbought zone in RSI

MACD has been closing in on the hourly charts and on half hourly charts MACD has already triggered a sell...

Again on hourly charts first a hanging man followed by a shooting star with more than double the volume of previous one has been made..(The pattern may change according to the time set for hourly charts).

So an attempt can be taken to sell with 234 as the stop-loss
I have all the logic for the trade.....whether I succeed or fail is another matter...only thing I know is how much I can loose...so I do not define targets...let the markets define it...:thumb:

 

[prst]

@smart_trade...trying to be of some utility....I read your posts from the beginning...damn good..

a/c to me DLF is a sell and an attempt can be taken on DLF on the short side

at the same time I may be wrong also...but I do have logic for my trade:

Logic of the trade is following:

DLF today has made a bearish harami pattern on daily charts ...and this pattern has more significance at the top of an uptrend ..considering that DLF has rallied from 192 to 226 in a very short span of time ...

DLF is below its 200DMA @233...SO the stock is in an overall downtrend

Today and even yesterday the stock has made a 8 day high ...

on hourly charts the stock is out of overbought zone in RSI

MACD has been closing in on the hourly charts and on half hourly charts MACD has already triggered a sell...

Again on hourly charts first a hanging man followed by a shooting star with more than double the volume of previous one has been made..(The pattern may change according to the time set for hourly charts).

So an attempt can be taken to sell with 234 as the stop-loss
I have all the logic for the trade.....whether I succeed or fail is another matter...only thing I know is how much I can loose...so I do not define targets...let the markets define it...:thumb:

Hi,
I need some clarification here.
has it formed the bearish harami pattern on dailies today?
sorry for a newbie doubt, but i see that the last candle is white; but bearish harami needs a white candle followed by a child black candle, contained completely inside it.
please correct me if am wrong.

 

[respectinvestor]

Hi,
I need some clarification here.
has it formed the bearish harami pattern on dailies today?
sorry for a newbie doubt, but i see that the last candle is white; but bearish harami needs a white candle followed by a child black candle, contained completely inside it.
please correct me if am wrong.

@PRST...you are perfectly right...and the point which you have raised...only a good trader can see into it...you are right...it is Bearish Harami on daily patterns..Bearish harami has 4 variants...White body contained within white body, white in Black, Black in White and Black within Black...what you mentioned is definitely the more popular one ...black within white and white within black

and to tell you honestly I felt good when you raised this question...so I will go further ahead and tell you what am I going to do with position On DLF now.
1.)..for some one who is short in futures...with a stop-loss of 234 ...it makes sense to decrease the stop-loss to 230...so now risk is further reduced by 4 points...reason is its the third consecutive day when the stock is not able to get past 226(cash)...so may be for the short term we have one well defined supply zone for the stock

2.)The discount in the price of future and cash is consistently between 3-4 points...so for a short position its an indication that may be we are on the right direction..I suppose a person would have been short at somewhere between 215-221..thats the range of DLF october futures today...

3.)Since I am basically a position trader..with a somewhat longer view of 3-5 days...I am basically looking at daily charts to give me direction...

4.)My strategy is a simple one...I want to be caught in a trend...so if a strong trend develops from here DLF may reward strongly on the downturn..ADX an important indicator of a strong trend is both below +DI and -DI....so DLF @225 after a strong rally from 192...and being in an overall downtrend....(below 200 SMA) I preferred to bet on the strong trend developing on the downside....DLF beinf a realty sector stock provides some further cushion...against an adverse upside from these levels...

Trading is all about speculation ...I speculate based on some sound logic..which may prove to be wrong...at the same time if logic is there I will take the trade...now at least I have decided that my loss be reduced from a level of 234 to 230...and honestly I never know what is the target...I would like the markets to tell me how much it loves me....so I stay put at the same time stop-loss is not sacrosanct...I may further reduce it.....point is simple if I loose ...I loose a dime...and if I make I make a fortune...once a trade is there logic is gone...let the markets tell me how logical I was...

I hope I clarified many other things also...this is the way I trade...hope I make some sense:thumb:

 

[respectinvestor]

@prst...for any further clarification go to www.stockcharts.com...its the best site I have come across explaining the technical analysis in a simple way...its way ahead of most of the fancied books on the subject...there is a section called chart school...visit it...and you will be able to develop a better understanding of most of the technical indicators in use...any way I do not find much value addition beyond a few like ADX,RSI.SLOW STOCHASTICS,MACD....:thumb:

DLF future october @ 216...SO now it makes sense to reduce the stop-loss further @ 225 at least...so as for now my chances of making loss significantly reduced...and if Markets love me ...it will show its affection by converting my conviction into currency for me..

Regards and Happy Trading.....:thumb:

 

[respectinvestor]

@prst...some more of it ....on DLF..

@ 12.45 pm with DLF CASH @ 220.6 on the daily charts a DOJI pattern has develoved...DOJI is indecision...now the point is indescision regarding what...the indecision is according to me about the upwards direction of DLF..so if its all abour taking inteligent speculative bets...then this pattern gives me further conviction that I may have thought correctly...

I can write such posts in market hours because I am least bothered about 3-4 points adverse reaction from my position...If I prove to be correct then I know I would have nailed the top of DLF...and if I am wrong...I will book my losses...say thank you...study again and after studying 70-80 stocks I will agin try to zero down on that one stock which may develop a strong trend and reward me....

I seriously do not know whether I make a sense or not...or I am writing pure bullshit...people in the forum would be a better judge of this...:thumb:

 

[respectinvestor]

@PRST...MACD had triggered a sell on hourly charts....after having triggered a buy arround 195-200 levels on horly charts...on hourly charts both of these triggers are a good one...first ..a buy trigger from below ..and now a sell trigger from above...these are the best of MACD ...which may not work also...at the same time these triggers carry a higher probabilistic bets...so need to be taken....

Now something on my exit plan ...I do not have as if now any exit plan if the position is in profit

In case of adverse reaction ....I will be looking for 20SMA 9 EMA crossover on half hourly charts to be alerted to the possibility that I may have taken a wrong trade....this also means that instead of taking profits I may have to take reduced profit or may be even a loss...well that does not affect me...because I am simply looking for a trend and be caught in it...at least now I have a cushion that my losses would be minimal...because Big Money is always made by getting caught in a trend and not by being correct to the tune of 3-4 points...at the same time I am also in awe of some of the tradrs who bet big time taking huge leverage and consistently making money...:thumb::thumb:

 

[respectinvestor]

@ 2.05 pm DLF oct futures @ 212.55 and DLF cash @ 218.30..

The discount between cash and futures have increased now to 5.5-6 points..

The markets have just now told me that it loves me...DLF broke today"s low..

Being short at a good price yeserday definitely helps...

again I will try to be patient....no plans to move out of this position...I will run away like a coward...in losses....but the point is markets have told me right now ...I Love you...and it will take care of me...so will stay put...and see how much it loves me...:thumb:

 

[prst]

@ 2.05 pm DLF oct futures @ 212.55 and DLF cash @ 218.30..

The discount between cash and futures have increased now to 5.5-6 points..

The markets have just now told me that it loves me...DLF broke today"s low..

Being short at a good price yeserday definitely helps...

again I will try to be patient....no plans to move out of this position...I will run away like a coward...in losses....but the point is markets have told me right now ...I Love you...and it will take care of me...so will stay put...and see how much it loves me...:thumb:

Hi,

thanks for the explanation.
Harami pattern was misunderstood by me.
Just went through it briefly in Steve Nison's book and didnt study it fully.

Can you please explain about The discount between cash and futures prices and how it influences our trading decisions?

thanks

 

[prst]

@PRST...MACD had triggered a sell on hourly charts....after having triggered a buy arround 195-200 levels on horly charts...on hourly charts both of these triggers are a good one...first ..a buy trigger from below ..and now a sell trigger from above...these are the best of MACD ...which may not work also...at the same time these triggers carry a higher probabilistic bets...so need to be taken....

Now something on my exit plan ...I do not have as if now any exit plan if the position is in profit

In case of adverse reaction ....I will be looking for 20SMA 9 EMA crossover on half hourly charts to be alerted to the possibility that I may have taken a wrong trade....this also means that instead of taking profits I may have to take reduced profit or may be even a loss...well that does not affect me...because I am simply looking for a trend and be caught in it...at least now I have a cushion that my losses would be minimal...because Big Money is always made by getting caught in a trend and not by being correct to the tune of 3-4 points...at the same time I am also in awe of some of the tradrs who bet big time taking huge leverage and consistently making money...:thumb::thumb:

another point is that, the macd and stochs on daily are moving upwards, without any hint of bearishness.
that will be a deceiver

 

[respectinvestor]

Hi,

thanks for the explanation.
Harami pattern was misunderstood by me.
Just went through it briefly in Steve Nison's book and didnt study it fully.

Can you please explain about The discount between cash and futures prices and how it influences our trading decisions?

thanks

@prst..

First of all do not be so humble...you have never misunderstood the bearish harami pattern and going by the text book definition of it it can not be said to be a bearish harami...even Candlestick Charting Explained by Gregory L. Morris recognises the pattern mentioned by you only...you will be able to read about the pattern mentioned by me @www.stockcharts.com go to section chart school.....

Of greater relevance is the message it tries to give...and the message is what I am more interested in...the message is..

The uptrend has been halted ....and one never knows it may resume its upward journey...at the same time it is open to interpretation..and so I took it as possible case of reversal and going by the price action today I am correct to an extent

Coming to the discount between cash and future prices...futures trading at a price lower than cash price is indicative of the fact that traders are becoming bearish on the stock...and in a hurry not to miss the opportunity to sell it have pushed it further down thus creating the difference

hope it clarifies...

Regards and Happy Trading:thumb: