Trading Nifty
- Thread starter Gaurav Kumar
- Start date
Dear Ranj_2K,
Markets move in patterns on weekly, monthly, daily and quaterly charts.
What i look is for these patterns. One should not be rigid in the markets. So if the pattern is not being followed by the market due to any development in US , here or otherwise, a different pattern would be followed. Now i was saying that nifty shall touch 4700. The pattern existed even when US market fell heavily for two days. So i was confident.
Today, the CRR has been hiked by 50 basis points, which the market was not expecting. This could lead to a change in patterns, which would be obvious only at the end of the day.
Markets rarely crash in a straight line. Notice i reacted only when the market came up a bit and gave me an exit option for one of my nifty positions.
You may see that US market crashed on two consequetive days, but our market fell only on one day. Why was that? I for one was always talking of a recovery, and if you read my earlier post it was of a quick recovery this week. The recovery has now happened. How did i know of it? I know no big player, i myself am an ordinary investor just like you all. The only thing i saw was some chart patterns, which gave me that confidence.
Most people look at indicators alone, i look beyond that.
i have done my share of day trading before giving up.
Let me list what i consider a good strategy.
1. Should get good returns, better than mutual funds on an annual basis. I am not ineterested in day to day returns.
2. It should require few trades.
3. I should not be required to sit in front of my terminal the whole day. I shoudl be able to carry out other activites, ithout fear that i shall lose my money even if i go away for a short period.
4. It should not make me tense at any moment.
You may decide to differ from the above.
With best wishes,
Gaurav Kumar
Markets move in patterns on weekly, monthly, daily and quaterly charts.
What i look is for these patterns. One should not be rigid in the markets. So if the pattern is not being followed by the market due to any development in US , here or otherwise, a different pattern would be followed. Now i was saying that nifty shall touch 4700. The pattern existed even when US market fell heavily for two days. So i was confident.
Today, the CRR has been hiked by 50 basis points, which the market was not expecting. This could lead to a change in patterns, which would be obvious only at the end of the day.
Markets rarely crash in a straight line. Notice i reacted only when the market came up a bit and gave me an exit option for one of my nifty positions.
You may see that US market crashed on two consequetive days, but our market fell only on one day. Why was that? I for one was always talking of a recovery, and if you read my earlier post it was of a quick recovery this week. The recovery has now happened. How did i know of it? I know no big player, i myself am an ordinary investor just like you all. The only thing i saw was some chart patterns, which gave me that confidence.
Most people look at indicators alone, i look beyond that.
i have done my share of day trading before giving up.
Let me list what i consider a good strategy.
1. Should get good returns, better than mutual funds on an annual basis. I am not ineterested in day to day returns.
2. It should require few trades.
3. I should not be required to sit in front of my terminal the whole day. I shoudl be able to carry out other activites, ithout fear that i shall lose my money even if i go away for a short period.
4. It should not make me tense at any moment.
You may decide to differ from the above.
With best wishes,
Gaurav Kumar
Dear Gaurav,
Thank you for your informative post, however the above is a totally irresponsible thing to say, please understand most of the people here are not novices and will indeed have questions, if you believe you know what you're doing and have conviction and faith in your method you should be able to answer any question confidently rather than saying "please don't ask me that" this amounts to saying "I don't know therefore please do not ask me".
I hope you will take it in the correct spirit and answer our members questions. This will further strengthen the notion that you actually know what you are doing.
Best wishes
Marcus
Thank you for your informative post, however the above is a totally irresponsible thing to say, please understand most of the people here are not novices and will indeed have questions, if you believe you know what you're doing and have conviction and faith in your method you should be able to answer any question confidently rather than saying "please don't ask me that" this amounts to saying "I don't know therefore please do not ask me".
I hope you will take it in the correct spirit and answer our members questions. This will further strengthen the notion that you actually know what you are doing.
Best wishes
Marcus
Dear Gaurav,
Thank you for your informative post, however the above is a totally irresponsible thing to say, please understand most of the people here are not novices and will indeed have questions, if you believe you know what you're doing and have conviction and faith in your method you should be able to answer any question confidently rather than saying "please don't ask me that" this amounts to saying "I don't know therefore please do not ask me".
I hope you will take it in the correct spirit and answer our members questions. This will further strengthen the notion that you actually know what you are doing.
Best wishes
Marcus
Thank you for your informative post, however the above is a totally irresponsible thing to say, please understand most of the people here are not novices and will indeed have questions, if you believe you know what you're doing and have conviction and faith in your method you should be able to answer any question confidently rather than saying "please don't ask me that" this amounts to saying "I don't know therefore please do not ask me".
I hope you will take it in the correct spirit and answer our members questions. This will further strengthen the notion that you actually know what you are doing.
Best wishes
Marcus
Dear Marcus,
I am indeed answering questions. My reactions was not to questions, but pointed barbs by certain members.
As i have repeated earlier, that paths to making money are many. If members comment "that reading his post is a waste of time", i think i have the right to react.
My reaction is only to such comments. As i have said earlier we are here to share knowledge and not fight with each other and show who is superior.
I agree nobody is a novice.. I have not said others are...
With best wishes,
Gaurav Kumar
U
Copied from Gaurav's Post:=
"1. Should get good returns, better than mutual funds on an annual basis. I am not ineterested in day to day returns.
2. It should require few trades.
3. I should not be required to sit in front of my terminal the whole day. I shoudl be able to carry out other activites, ithout fear that i shall lose my money even if i go away for a short period.
4. It should not make me tense at any moment."
V.Good strategy.
"1. Should get good returns, better than mutual funds on an annual basis. I am not ineterested in day to day returns.
2. It should require few trades.
3. I should not be required to sit in front of my terminal the whole day. I shoudl be able to carry out other activites, ithout fear that i shall lose my money even if i go away for a short period.
4. It should not make me tense at any moment."
V.Good strategy.
Dear Gaurav,
Well I misunderstood, I assumed you were annoyed with questions, thanks for the clarification, please do keep posting and discussing your strategy.
As for criticism my advice is do reply to constructive criticism but ignore destructive criticism.
Would it be possible for you to discuss what sort of patterns you look for specifically?
Well I misunderstood, I assumed you were annoyed with questions, thanks for the clarification, please do keep posting and discussing your strategy.
As for criticism my advice is do reply to constructive criticism but ignore destructive criticism.
Would it be possible for you to discuss what sort of patterns you look for specifically?
Dear Friends,
Let us review our position.
Nifty went up as i had been suggesting that it would. The only problem is that RBI hiked the CRR much more than expectations. This created a possibility that the market may after the initial fall, rise to around 4460 level (future) and then fall. this forced me to book partial profit when the market recovered from the initial shock, as also take a hedge position. At the end of the day, the market kept going up.
My positions are as below
1.Nifty purchased at 4530 on 23/7/07 , current price 4508, M to M = -1100
2. Nifty purchased at 4410 on 30/07/07, sold today at 4460, Net profit = 2500.
3. Nifty Sept series shorted at 4440 on 31/07/07, current price 4491, M to M = - 2550
Overall, i am on a M to M loss of 1150 (effectively) which has reduced from the M to M loss of 6500/- yesterday.
Note i have not booked a loss so far. I have carried out four transaction in last one week, out of which two today were on account of an unexpected developement.
Also note that if i do not do anything now, the M to M loss will be approx constant from here onwards. This gives me an opportunity to coolly analyse where the market is headed. Volatile movements would not bother me.
Once the market is less volatile or i am sure of the direction of the market, i can take appropriate action.
Let us say i were to be sure that market is to fall, i would exit the long position, and short one more and make profit.
If on the other hand i am sure that the market is to go up now, i would exit the short position, add to the long position and end up in profit. Note i did not utilise any stop loss. All trades were carried out on analysis, not on chance.
As far as money invested plus back up. One nifty purchase, plus i has thought that i shall hedge only if it falls below 4350 (that was the thought before CRR hike), so 180 points or 9000/- Mto M plus funds to hedge. So at best 75000/- was the money involved. so returns may be calculated on 75000/- . Of course if the market would have moved up say 150 points above my buy price then i would have removed the provisions of money as back up, as they would not have been required. So the money to be invested / kept aside would have been lot less.
On a personal side, i have several stock futures invested in. The diversification helps reduce the amount of back up funds required, but since i have not talked about stocks on this forum, this paragraph is irrelevant, except for information on how much back up funds are required.
Last, the impact of the CRR hike needs to be understood before taking further steps. The rally could be merely a relief rally, or it could be that the market perceives that the hike is not likely to have a significant impact.
In either case a hedged position allows us breathing space and we are no longer constraint to act in a hurry. We can now afford to watch the market without fear, understand the movement and take decision accordingly.
Next post tomorrow morning
with best wishes,
Gaurav Kumar
Let us review our position.
Nifty went up as i had been suggesting that it would. The only problem is that RBI hiked the CRR much more than expectations. This created a possibility that the market may after the initial fall, rise to around 4460 level (future) and then fall. this forced me to book partial profit when the market recovered from the initial shock, as also take a hedge position. At the end of the day, the market kept going up.
My positions are as below
1.Nifty purchased at 4530 on 23/7/07 , current price 4508, M to M = -1100
2. Nifty purchased at 4410 on 30/07/07, sold today at 4460, Net profit = 2500.
3. Nifty Sept series shorted at 4440 on 31/07/07, current price 4491, M to M = - 2550
Overall, i am on a M to M loss of 1150 (effectively) which has reduced from the M to M loss of 6500/- yesterday.
Note i have not booked a loss so far. I have carried out four transaction in last one week, out of which two today were on account of an unexpected developement.
Also note that if i do not do anything now, the M to M loss will be approx constant from here onwards. This gives me an opportunity to coolly analyse where the market is headed. Volatile movements would not bother me.
Once the market is less volatile or i am sure of the direction of the market, i can take appropriate action.
Let us say i were to be sure that market is to fall, i would exit the long position, and short one more and make profit.
If on the other hand i am sure that the market is to go up now, i would exit the short position, add to the long position and end up in profit. Note i did not utilise any stop loss. All trades were carried out on analysis, not on chance.
As far as money invested plus back up. One nifty purchase, plus i has thought that i shall hedge only if it falls below 4350 (that was the thought before CRR hike), so 180 points or 9000/- Mto M plus funds to hedge. So at best 75000/- was the money involved. so returns may be calculated on 75000/- . Of course if the market would have moved up say 150 points above my buy price then i would have removed the provisions of money as back up, as they would not have been required. So the money to be invested / kept aside would have been lot less.
On a personal side, i have several stock futures invested in. The diversification helps reduce the amount of back up funds required, but since i have not talked about stocks on this forum, this paragraph is irrelevant, except for information on how much back up funds are required.
Last, the impact of the CRR hike needs to be understood before taking further steps. The rally could be merely a relief rally, or it could be that the market perceives that the hike is not likely to have a significant impact.
In either case a hedged position allows us breathing space and we are no longer constraint to act in a hurry. We can now afford to watch the market without fear, understand the movement and take decision accordingly.
Next post tomorrow morning
with best wishes,
Gaurav Kumar
Dear Marcus,
Market behaviour is a complex phenomenon. What needs to be understood is that we small investors play no role in market directions. What i look for is where big investors enter and where they are to exit.
Let us say that if you were a big player. When you want to pick up a huge chunk of shares, it must be at the expense of small players like us, who should sell enmass. So what are the levels that would create enough of us to short, so that they pick up. As also what psycological impact small moves would have on us, to make us panic and sell. I consider market moves entirely as a reflection of how bigger players would psyche out the rest.
In the same way when they want to exit, they would create a similar pattern on the other side.
Unfortunately, chart patterns are only indicative. As also i believe, that the patterns do not fit for all stocks, nor has it been possible for me to identify them for all the stocks so far. So i do limit myself to stocks where i can identify a pattern.
As an example, i know that ITC shall touch 205. I am long from the price of 155. now the pattern followed by ITC is remarkably different from that of Nifty or other stocks. It took me several months to think out the pattern.
A specific answer to what the pattern is therefore difficult. it arises out of a combination of technical analysis, knowledge of economics (at least somewhat), a bit of fundamantals ( for this i take the help of friends as i dont have time ) as well as psycology.
Let us now take the case of the CRR hike today.. What made the market go up in a frenzy, when the whole market was not expecting such a hike? I think of it as unusual.. So i would like to question who has driven the market up and why, when the logical market move should have been down...Once i get an answer to this question i take a decision as to where the market is headed
With best wishes,
Gaurav Kumar
Market behaviour is a complex phenomenon. What needs to be understood is that we small investors play no role in market directions. What i look for is where big investors enter and where they are to exit.
Let us say that if you were a big player. When you want to pick up a huge chunk of shares, it must be at the expense of small players like us, who should sell enmass. So what are the levels that would create enough of us to short, so that they pick up. As also what psycological impact small moves would have on us, to make us panic and sell. I consider market moves entirely as a reflection of how bigger players would psyche out the rest.
In the same way when they want to exit, they would create a similar pattern on the other side.
Unfortunately, chart patterns are only indicative. As also i believe, that the patterns do not fit for all stocks, nor has it been possible for me to identify them for all the stocks so far. So i do limit myself to stocks where i can identify a pattern.
As an example, i know that ITC shall touch 205. I am long from the price of 155. now the pattern followed by ITC is remarkably different from that of Nifty or other stocks. It took me several months to think out the pattern.
A specific answer to what the pattern is therefore difficult. it arises out of a combination of technical analysis, knowledge of economics (at least somewhat), a bit of fundamantals ( for this i take the help of friends as i dont have time ) as well as psycology.
Let us now take the case of the CRR hike today.. What made the market go up in a frenzy, when the whole market was not expecting such a hike? I think of it as unusual.. So i would like to question who has driven the market up and why, when the logical market move should have been down...Once i get an answer to this question i take a decision as to where the market is headed
With best wishes,
Gaurav Kumar
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