Incisive Nifty Trend Analysis

[DSM]

Putuval, I totally agree with you 100%. I think Prada rode the trend right from the top to the bottom but not sure if he booked his gains before going short again. In essence, I guess the lesson for us is to scale out of a position when in profit and within 70%, 80% and 90% of the target, rather than wait for the small percentage and get trapped in expectation of 100% target.

As you rightly said, courage and convictions are good, and as is so well said, the market can remain irrational longer than you can remain solvent, hence courage and conviction has to remain secondary to holding on to gains and not letting profit turn into a loss.

To be frank most of us would have been confounded by the strong run of the Nifty and my understanding is that the unexpected fall in commodity prices, Japanese monetary easing and now the talk European talk of negative interest rate has brought in additional liquidity, risk on attitude and given a totally unexpected boost to what otherwise would have been retracement in the market.

The market has turned negative today with the banking pack leading the decline. Now we need to see if the downturn is going to last for another day or two (to induce shorts in the system) and then run up which will get the new shorts to buy back at higher levels and push the market higher.

The market is in a fine balance in the fight of the bulls and the bears, and we need to see what happens next, and if the battle is won by the bulls or the bears. We have interesting times ahead.

Courage and conviction are good but it could wipe out the margin, which could have been better if stopped out and re-entered later for better results. The above approach of staying put for 500 to 600 points work for people who already has capital to sustain the downtrend.

What I meant to say, is that people do need a strategy to identify when they should exit their current longs and plan to re-enter at a later point of time. They can stick to their conviction but then they will again need a strategy when to re-enter again so that their trades follow their conviction again.

It could be pure luck that one moved to a profitable position from extreme loss position when the market recovered in the past three weeks. What could have been the situation if one witnessed a bear market similar to the one that happened in January 2008. The fall continued for a good 10K points in Sensex. How would the trader take care of that situation ?

 

[RAAMAKANT]

During each moment the markets are open, you have an opportunity to enter a position, lighten up a position, add to a position, or exit a position. These are all opportnities to enrich yourself by taking profits or at least cutting your losses.

From
Trading in the Zone by Mark Douglas.

 

[Bewinner]

Prada...
great call on DLF...though it is half way done...but I think it will be there on the target

 

[bear]

anybody still holding shorts? what is the stoploss

 

[rajasree1]

please NIFTY spot stop at 6091

 

[Option.Trader]

i think all bets are off with HUL story unfolding... news of Unilever buying huge stake in HUL to the tune of 29000Cr... this should hammer down the rupee and then send Nifty up up and away... i think this time Nifty should test its high of the year... 6113...huge shorts still built into HUL as per options table should really shoot it up further... absolute carnage for bears in HUL

There is a saying " Markets can be irrational longer than you can be solvent"
No point going against the tide...from the time i posted above, nifty has moved close to 150 points. Last 9 days trade, nifty has consistently made higher lows each and every day... in anyone's trade book thats an up trending chart... also no point in hedging as at the most it can cut your losses.. and we are in market to make profits not to just cut losses.. Nifty will give enough indications when the trend has changed and we will get better prices even at that level... so be friends with the trend

 

[SEVEN STAR]

there is a saying " markets can be irrational longer than you can be solvent"
no point going against the tide...from the time i posted above, nifty has moved close to 150 points. Last 9 days trade, nifty has consistently made higher lows each and every day... In anyone's trade book thats an up trending chart... Also no point in hedging as at the most it can cut your losses.. And we are in market to make profits not to just cut losses.. Nifty will give enough indications when the trend has changed and we will get better prices even at that level... So be friends with the trend

do you mean to say hedging..all that stuff will not work or a ta should know to keep sl..and identify the trend ...
I as a trader i do only one thing i keep my sl in place..
At some point price have to come down .or go up..
One can never be bearish or bullish through all the days...months and years..........

I take only few trades....entry exit and sl..properly calculated..
I APPRECIATE YOUR POST..

 

[Option.Trader]

do you mean to say hedging..all that stuff will not work or a ta should know to keep sl..and identify the trend ...
I as a trader i do only one thing i keep my sl in place..
At some point price have to come down .or go up..
One can never be bearish or bullish through all the days...months and years..........

I take only few trades....entry exit and sl..properly calculated..
I APPRECIATE YOUR POST..

Not really... what i meant was no point in holding onto your biases, which in this case was that Nifty is in a downtrend...holding onto shorts from 5850 when nifty has rallied upto 6050 and hedging those just doesnt make much sense... instead you could play out the trend and then decide to go short at much better levels.

 

[DSM]

Just my 2C :

There are traders who trade 1M chart, others 5/10M. Some will trade basis 15/30M. And many others who will hold on to a trade for days, weeks or months.

The question is which method superior.? Which method provides higher return.? We live in the day when the market can reverse on a dime, where computerized systems create false patterns to induce buyers. This is my opinion after analysis of thousands of charts. (Just for e.g yesterday bank stocks wiped out many shorts, induced longs and again reversed sharply to trigger SL for longs) The traders who can benefit from such stop-runs are either those who trade on very short term of 1-5-10M. Rest of the traders including those trading on daily timeframe were toast and stopped.

Again my analysis of charts leads me to believe that positional traders with very long term timeframe who have beyond 10% SL levels and trade in a time frame of weeks to months can make money in the market, as do very quick traders who day trade on the smallest of time frames.

SL's, time frames and methodolody is unique and different to traders, and to say, that this is what is right, in retrospect, because this instance confirms to my belief and thinking and is what happened is give a very simplistic argument that only denotes one's bias and preference.

I find it difficult to believe that traders who are in the market for so long can look at only their methodology (which no doubt may be right for them) take a view that the way they trade is the most suitable and appropriate way of trading, exclusive to everything else.

Reminds me of the arguments of the kindergarden children who say that 'my mommy is the best' and go on to prove to everybody why that is so. The question here is : Are we here to make money? to debate trading skills and tactics? or to prove as some are prone to : How superior they are to everybody else and how their analysis and system is flawless and 'the best'

Cheers and happy trading.

Not really... what i meant was no point in holding onto your biases, which in this case was that Nifty is in a downtrend...holding onto shorts from 5850 when nifty has rallied upto 6050 and hedging those just doesnt make much sense... instead you could play out the trend and then decide to go short at much better levels.

 

[gunsho]

SL's, time frames and methodolody is unique and different to traders, and to say, that this is what is right, in retrospect, because this instance confirms to my belief and thinking and is what happened is give a very simplistic argument that only denotes one's bias and preference.

Well said :thumb:

Even for a same guy doing positional and intraday, one will agree, a BNF positional trade with 200 point SL is digestible. while in intraday, that is a nice target to reach .