Saturday, 21 February 2015

Trade Your Conviction

To Karthikeyan Subramanian,

It is regarding your query that you yesterday asked after reading my post on Range & DP's.  Here I try to illustrate more with the example what I really wanted to explain.  I hope you get your answer.

Trade your conviction, trade what you know, trade the level that you are confident about.

Look at the chart below of 02/12/2014. Look closely on what happens at the bottom.  How did the price action behave there?

Below is the chart and my findings about it.  I could find the levels 8555 and 8545 significant.  As I have explained it in the chart, I feel these levels will hold the next time price retests them.  That is my conviction from reading the price action, i.e. these levels will HOLD.

Now I just sit tight and wait for the prices to reach those levels and prove that my conviction was right. My conviction was that it would hold.  If it really holds, I will wait for some kind of BOF type pattern or even a TST to go long if other factors support it.  If prices prove that my conviction was wrong, it would break that level.  Even in that case I can look for BPB type of entry to go short, believing that the strong support level got broken and I should go in the breakout direction.

Now look really what happened on 3rd December, how price action respected these levels and bounced off from these levels.

That is it.  Trade what you see, what you believe.


  1. Daveji,

    You have made a new post to explain in detail about the strength of a DP and what should be done as the price revisits that level. Thank you so much for leaving no stone unturned to ensure that I can see things as they are and draw the right inferences.


  2. Thanks URD. Appreciate your effort.

  3. Dear Dave,

    A simple and clear explanation with charts.
    Appreciate your guidance always.
    Also we request you to post the Nifty trading charts, whenever you trade.


    1. Raju

      Thanks. Will do so when time permits.


  4. Hai, I have been following your trading charts at EOD, lately you stop posting your charts.
    It was immensely educational to see a professional trading and their trades on chart,
    if time permits please do continue posting your Nifty trade charts.

    Market Student