sm useful posts

[Satya.]

instd of pondering wher i read dat reply,posting here sm useful posts/replies for self reference-

abt trding 1tf pivot

can v trd pivot on 1tf @Smart_trade @rjshem

Yes one can trade pivots on 1 min timeframe.But anything less than 3 min is more like scalping .With 1 min timeframe you will make 6-8 points in NF but considering brokerage,STT and other costs one has to decide whether it is worth it.

One can take entry on 1 min pivots with tight stoploss provided the trade is set up on 3 or 5 min ,but once the trade moves in favour,then come out of 1 min mindset and manage the trade as a day trade and not as a scalp.This will help getting a small stop entry in a trend but your profits will be like a daytrader.

The above will need good practice on the system ,so that it becomes your second nature and we don’t think in the heat of the market ,and screen time....not an easy thing to do .

Smart_ trade

 

[Satya.]

on scalping

Hypothetically, if one were scalping, then how would he/she manage the MFE. Profit taking has to be based on targets right? 6-8 points as you rightly said. Would a typical scalper close his trade here or take out most of the positions once he gets this or wait and watch where the market takes him?

Typical scalper does not even wait to get 6-8 points in most trades. Scalping is quick entry and exit within minutes....it waits till the move continues and books out either in profit or closes in loss. It does not wait for the targets,MFE.Scalpers dont wait and watch where the market takes them and the moment market shows a sign of even a temporary halt, scalper books out.

Smart_trade

 

[Satya.]

abt systm searching all d tym-

sir so many traders and i also same problem is not stick the method jump 1 system to another system how can we stick with system & money management rules pls some lights

This issue comes from our unrealistic expectations from a trading system. There is no trading system which will address all the trading issues and when our system encounters few losses, we throw that system aside and go in search of another system .This continues till one understands that there is no holy grail system...all systems will have losing trades, false starts and their share of losses.

Successful traders dont change their system all togather...they may add a few things to make it more efficient but they keep the core system same because they are in tune with that system . And as they say " dont mend it till it is broken".

Smart_trade

 

[Satya.]

abt trding 1 scrip only

is it wise 2 stick 2 only 1 scrip trding intraD EQ?
say i trd only TS n nothng else bt TS

I knew a big pro trader trading only ICICIBANK. It is possible to trade with only one stock. Some trader is specialist in few scripts.
4-5 scripts are the better idea and more than 5 is usually difficult to track with every detail.

But only one may not be a good idea for everyone, bcoz every stock or Index goes in rangebound or no trade zones. You may find good opportunity then in another stock of your basket (4-5 stocks which u trace regularly).
Choosing one-two different stocks from different sectors is better idea bcoz many times there are sector specific moves in the market. Better idea choose 3-5 stocks but always number them. If 1st stock in narrow ranges you may get the opportunity with others.

For example TATASTEEL, ANYONE BANK STOCK, RELIANCE & OR Any 2-3 stock from DLF/RELCAPITAL/(ANYONE FROM AUTO STOCK)/(ANYONE FROM TELE). Number them according to preference and always try to find opportunity top down according to your favourite stocks.

If u find only one script comfortable then it's better to go with only one.

 

[Satya.]

hello Dr

cn u pls sho wid 1 chrt-
hw de-mrk cn b traded on 3tf for intraD?

Below daily timeframe, accuracy of sequential is below par, so it's not advisable to trade it on smaller timeframes such as 3min/intraday. You can however fade a trend on TDST lines in lower timeframes, which work well even on 1min timeframe.

Vivek

 

[Satya.]

abt VWAP

is vwap a price action system?

VWAP is not a system. It is an indicator derived from price and volume and standard deviation bands are plotted around it. One has to form his own system to define entry,stoploss,profit taking ,position sizing depending on how the price behaves around these VWAP levels.

One should find out how VWAP is plotted,how price behaves in relation to VWAP and whether he can use it for trading...that is a work which the trader has to do.

Smart_trade

I still have VWAP bands on my chart.Useful for profit booking. It helps to understand the market structure.

Smart_ trade

 

[Satya.]

interesting Q&A-

St,

I have a query. Can you tell me how many nifty points you are going to make in the remaining months of this year?

I don't want to know the figure but just want to know whether you can know how much you will end up by this year

The idea is to make money or earn return on our capital...so whether I do it by Nifty future or stocks it does not matter.

I dont know how much I will make in remaining year....that depends on how much the market gives us......for me the question is whether I did justice to every opportunity presented to me or not. But I know that I am already ahead in the game this year as usual and I will stay there.....let us see what the market has in store for us...

Smart_trade

 

[Satya.]

Abt Capital Formation-

With salary you know in advance how much you will have by end ofyear and how much you will spend. With trading especially when you are growing an account i dont even know what will be the size by end of year or 2years

Just concentrate on trading well and other things will be taken care of automatically......traders dont have fixed earnings but they dont have cap on their earnings too....but capital building process is slow and painful .Because on a 5 L capital if one makes 3 L per year, it will go in his expenses and there is little which gets added to capital formation...but on 50 L capital if one makes same % ie Rs 30 L he will use 5 or 7 L for expenses and the remaining ( after taxes) will go in capital formation.....

For good earning as a full time trader one needs to be well capitalised.

Smart_trade

 

[Satya.]

abt position sizing-

I have a question; How do you,sir, decides on position sizing when working with a daily chart ? For intraday trade calculation is straightforward i.e. Max Risk/(|Entry price - SL|). What confuses me if I swing trade a small portion of my already smaller capital sometime I feel the total value I am holding overnight ( number of shares * (|entry-SL|)) is large comparative to my capital. So, does swing trading with an allocated fixed number of money, say 5000, and looking to again % on this capital make far better sense?

One has to find his own solution to such problems...when my capital was small ( and even now I follow the same ) I used to finetune swing trade entry on smaller timeframe and if by end of the day the market moves sufficiently in our favour then I used to keep the position or else if the market is in small range from my entry, I will take profit /loss at the market close and not take overnight risk. We can always rethink our position the next day.....for me if the market does not move in my favour by closing then the trend is weak... that works for me, it may not work for others...

Smart_trade

 

[Satya.]

abt trading pivot method-

I have observed few traders trading pivot method think that for everyday you need a visual pivot to take a trade. This is incorrect. The method trades minor trends in the direction of visual trend. So when the visual trend gets defined, we have to trade each minor pivot in the direction of visual trade.

The chart shows that the visual trend changed to up on 24-5-2018. When we start trading on 25-5-2018, we know that the visual trend is up...so we look for place to buy based on following :

1) Minor uptrend....buy above minor pivot high...our initial stoploss is the immediate preceding minor pivot low.
2) Look for small consolidation and buy above the consolidation area.

Our first entry is above a small horrizontal consolidation......stoploss level is shown. In case one misses the first entry, we can have a second entry above a minor pivot high as shown...

The pivot method works best in trending markets. We need to have good trending moves in either direction. Most losses on this method ( like ny other trend following method ) are when traders trade this method in sideways markets. Here we are buying breakouts.....so in weak sideways markets, by the time we buy a breakout, the trend ends...so a trader has to first understand what is the market structure, is the market trending or sideways...how strong is the trend and then in sideways markets use support /resistances, VWAP bands previous days high/low, failures at important levels etc.....

How does one know the strength of the trend ? Traders can find that just looking at the chart but few pointers are as under :

1) Market making very small bars ,failing at breakouts/breakdowns.
2) Market remaining in 2 visual pivots for a long time .
3) Market making bars with long tails but small bodies.
4) Market barely going upto support/resistance levels and that too with great difficulty.
5) Market printing alternate red and green bars, both small bars....
6) ATR of the bar in your timeframe can give clues of the strength of the trend.

Traders by practice know how much move trending market gives in 5/10 or 15 min in nifty and bank nifty....so if the move is not strong, trade light in quantity and be quick to take profits......in strongly trending markets one can think of adds and holding till the end but in weak markets ( most of the times markets show weak trends these days) one has to grab the profits else it will disappear. If the market is staying in two visual pivots for a long time, then it is a danger sign that the trend is loosing strength.Trade the full quantity is a strong trend and lower qty in a sideways market....

We have seen that ERLs are not to be used in sideways markets but ERLs can be very effectively used in a trending market for catching a reversal at an early stage by pivot upgradation......we will discuss how to do it in the next weekend.

There is only one exception to what is said in the first para above. When the market closes strongly at the higher/lower end and next day it opens with a gap into the previous days afternoon range, here we need to wait till visual pivot is formed as the gap changes the supply/demand equation.

Smart_trade