Monday, 22 September 2014

22092014


Today Nifty opened 50 points CT full gap down.  It seemed like first three candles made initial range.
1) BPB of IRH.  It did not move well.  Had to scratch it at breakeven as it did not seem to be going up.
Then Nifty remained in the narrow range for almost 3 hours.
2) BO of Range High.  There was a minor BOF at other range extreme which gave confidence to go for direct BO though there was a BRN very close.  It moved remarkably well breaking all DPs.  Booked at 67 points of profit when it came back below PDH. 

10 comments:

  1. Davebhai,

    We were below yesterdays rang and gapped down.. then pullback abov irh.. why u avoided short below 10.15 when price failed to move thrice above days high at that time . ? als o there was BRN above it. so double confimration .. i took it and exited above 11.33.

    Secondly i took longs above 12.30 on sideways brekdown failure and ph break. ane exited below 1.36 looking to failure bar at yesterdays low.. .what was the thought process at that time. to not to shift the sl there.

    Thanks and Regards
    Bharat

    ReplyDelete
  2. Bharatbhai

    We are trading around all time highs, in a bull market. Most of the time the gap downs are bought in a bull market. Today after the open there was no sign that it was going down further. Instead it made higher range above the initial range and traded in that higher narrow range for long time, and ultimately broke out on the up side. When you trade the range, trade the range extremes only.

    You need to trail your winning position as long as you can if you really want to make money. That is what I did. Tried to get maximum juice out of it.

    URD

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  3. Daveji,

    Your BO trade is incredibly great!

    What was your thought process behind taking a BPB Long trade, immediately after a big outside gap?

    S.Karthikeyan

    ReplyDelete
    Replies
    1. SK

      1) 50 point full gap down in a strong bull market trading close to all time highs. Usually this kind of gaps get bought into in a strong bull market.
      2) After a big gap down, we expect consolidation. It did consolidate for almost half of the day trading in the narrow range. After consolidation, it has to move. Finally it broke out and I went along with it, with small risk.
      3) Those who shorted either on Friday expecting this gap down or today in the morning session, would put their stops above the range high and BRN. So I expected lot of orders at range high and BRN.
      4) I looked at the ranges as one on top of another. First three candle made the initial range. Then there was a long narrow range above this initial range. Further there was a minor BOF at range low.

      URD

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    2. Daveji,

      Thanks for the detailed reply.

      S.Karthikeyan

      Delete
  4. Hi Dave,
    This is more of feel/Intuition kind of trade isn't it ? With so many DP's above.

    ReplyDelete
    Replies
    1. xrtrader

      Please see my reply to SK above. I expected this trade to move to PDL or max to PDC. I was surprised by this strong move. With so many DPs above, you either enter into the trade earlier expecting them to get broken or enter after they are broken. I preferred to enter earlier.

      Did you enter on BPB of PDC?

      URD

      Delete
  5. Hi Dave,
    Thanks for wonderful explanation. Still working for next 2 months. So no full time trading yet.
    Will be doing soon. Thanks for your amazing post.

    ReplyDelete
  6. If there was no BOF of the range below, would you still have entered at the RH or waited for BPB of DH? My bias was short today and so I took the PP trade below 8082 after the BOF of range high and scratched it at 8086. After that failure, I was trying to avoid the BO of DH and then the market kept shooting up and I could not gather the strength to enter long...

    ReplyDelete
    Replies
    1. Anon

      No. CT direct BO trades are taken only when there is a BOF of other range extreme. I would have gone with the BPB then. Initially at market open my bias was also short as it opened below PDL, but the price action then forced me to change my bias. Whenever there is such long narrow range, try to trade the BO with minimal risk.
      Do not worry if you missed the move. Learn your lesson and move on. Markets are forever. There is always another opportunity.

      URD

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