Incisive Nifty Trend Analysis

[prada]

I entered the trade when Nifty broke 5880 yesterday. So that roughly works out to be 90 pt SL. I usually enter a trade only when I have high conviction. This is a high conviction trade. I don't see Nifty going too high from current levels. I would only be glad to short it on every rise from here.

That's almost a 150 pts diff before you enter a call to hedge your position... why not come out before that and enter at higher levels... 200 pts swing will usually take out the invested amount in no time in case of a bad draw.. interested in knowing the philosophy behind the trade..

 

[Option.Trader]

I entered the trade when Nifty broke 5880 yesterday. So that roughly works out to be 90 pt SL. I usually enter a trade only when I have high conviction. This is a high conviction trade. I don't see Nifty going too high from current levels. I would only be glad to short it on every rise from here.

Fair enough... though would like to pick your brain on this when it does go to 5970

 

[DSM]

Market has a way of clearing most SL, and then moving on in the original direction.

During the Tech. boom, many traders were wiped off... As the saying goes, the market can remain irrational longer than you can stay solvent. Hence, sticking on to one's conviction is important, but always hedging one's position or having appropriate SL. Prada is ofcourse long term positional player, and will be certainly experienced to know how to play on his convictions.

Today's market movement makes me wonder what it takes to get the index to drop down 60 points, inducing shorts, triggering SL for longs, and then, moving in the opposite direction to close 120 points higher.? Shorts loose, long loose and the 10% make money off the rest 90%!

Is this FII's acting in tandem? Can other players move the markets in this way? Just wondering.

Prada reading in, would appreciate your insight into today's market movement.

That's almost a 150 pts diff before you enter a call to hedge your position... why not come out before that and enter at higher levels... 200 pts swing will usually take out the invested amount in no time in case of a bad draw.. interested in knowing the philosophy behind the trade..

 

[sridhar]

My feedback on how i am using options data.

I look at the data in the morning, before market opens or just after market opens. It gives me an idea of where the upper & lower limits of the market are. 5 min. chart also shows a likely movement direction. Based on this I decide on which option pairs(CE & PE) to watch for the day.

Trades are entered only on the buy side based on a combination of EMA 5 & 26/50 crossovers. Look for a target profit of 3,5 & 10%. Have been trying this out in march.

My main problem is that once i taste success i become greedy & keep hankering after 20% gain. So need to temper my greed & reduce temptations.

Will update in due course.

 

[prada]

Its difficult to interpret the strategy of smart money. Yesterday morning's dip could be attributed to panic selling once technical levels were breached. However the surprise rally we saw thereafter could clearly be seen as the strategy of the smart money to clear out weak shorts out of the system. If clear cut strategy is not in place, it is quite easy to lose your hard earned money in whipsaws.

Market has a way of clearing most SL, and then moving on in the original direction.

During the Tech. boom, many traders were wiped off... As the saying goes, the market can remain irrational longer than you can stay solvent. Hence, sticking on to one's conviction is important, but always hedging one's position or having appropriate SL. Prada is ofcourse long term positional player, and will be certainly experienced to know how to play on his convictions.

Today's market movement makes me wonder what it takes to get the index to drop down 60 points, inducing shorts, triggering SL for longs, and then, moving in the opposite direction to close 120 points higher.? Shorts loose, long loose and the 10% make money off the rest 90%!

Is this FII's acting in tandem? Can other players move the markets in this way? Just wondering.

Prada reading in, would appreciate your insight into today's market movement.

 

[DSM]

I guess some big player or players in tandem can synchronise large orders. And they have algo programs to help them. Most traders will have close or obvious SL levels which can snowball to bigger dips/pullbacks. The smartmoney then knows when to enter or cover to their advantage, and thus retail loses more often than not.

Its difficult to interpret the strategy of smart money. Yesterday morning's dip could be attributed to panic selling once technical levels were breached. However the surprise rally we saw thereafter could clearly be seen as the strategy of the smart money to clear out weak shorts out of the system. If clear cut strategy is not in place, it is quite easy to lose your hard earned money in whipsaws.

 

[prada]

Kotak Mahindra Bank- CMP- 660

Dream run seen by this stock in the last few years seems to have come to an end. Deep correction is on the cards. Sub 600 levels and even lower is coming. So if your invested in it , its time to pull out your money.

 

[Option.Trader]

I guess some big player or players in tandem can synchronise large orders. And they have algo programs to help them. Most traders will have close or obvious SL levels which can snowball to bigger dips/pullbacks. The smartmoney then knows when to enter or cover to their advantage, and thus retail loses more often than not.

I think we attribute too much to this smart money theory... i think **** hit the roof yesterday when they unwound over 2000 cr of options ... i think its a fallacy to think they are always right... search around in google to see how much loss they have incurred just on the rupee... even today they bought 1200 cr in options.. mostly in speculative puts i think

 

[DSM]

True, Big guys loose too. But am still wondering about the bounce back once the market turned down. Who could have influenced the market to that extent.?

I think we attribute too much to this smart money theory... i think **** hit the roof yesterday when they unwound over 2000 cr of options ... i think its a fallacy to think they are always right... search around in google to see how much loss they have incurred just on the rupee... even today they bought 1200 cr in options.. mostly in speculative puts i think

 

[prada]

Staying ahead of the herd is what makes good money for you in the market. 5970 is now history. 5250-5300 is coming where nifty will find solid support! 5530 will be a hurdle before the eventual target is hit.

I entered the trade when Nifty broke 5880 yesterday. So that roughly works out to be 90 pt SL. I usually enter a trade only when I have high conviction. This is a high conviction trade. I don't see Nifty going too high from current levels. I would only be glad to short it on every rise from here.