Thoughts on Day/Swing Trading Part 2

#11
Rejections and Failures




Rejections and failures of price breakouts are very important for alert traders as these set up very good trading opportunities in the opposite direction. So it pays to keep an eye on such breakout 'breakdown failures particularly if they come after sustained move earlier and when the market is near important support/ resistance levels.

Catching these reversals is extremely profitable as the traders trapped because of failed breakout/breakdown come to our help when they get out of their loosing positions in desparation and thereby lending us a helpful hand.....

Posted above is a Nifty Futures 5 min chart showing 3 breakout failures and 1 breakdown failure in last 2-3 days ,marked on the chart. These have caught the swing reversal points with great precision, and hence it pays to listen when the failures speak loud and clear.....and these are the kind of failures which will make alert traders successful ....:)

Smart_trade
 

gambler

Well-Known Member
#12
Rejections and Failures




Rejections and failures of price breakouts are very important for alert traders as these set up very good trading opportunities in the opposite direction. So it pays to keep an eye on such breakout 'breakdown failures particularly if they come after sustained move earlier and when the market is near important support/ resistance levels.

Catching these reversals is extremely profitable as the traders trapped because of failed breakout/breakdown come to our help when they get out of their loosing positions in desparation and thereby lending us a helpful hand.....

Posted above is a Nifty Futures 5 min chart showing 3 breakout failures and 1 breakdown failure in last 2-3 days ,marked on the chart. These have caught the swing reversal points with great precision, and hence it pays to listen when the failures speak loud and clear.....and these are the kind of failures which will make alert traders successful ....:)

Smart_trade
Hi st!
Is there any thread about breakout failure on tj? If yes then please give me link. Breakout failure are also very important and profitable for trading
 
#13
Hi st!
Is there any thread about breakout failure on tj? If yes then please give me link. Breakout failure are also very important and profitable for trading
Hi gambler,

No, I have not seen any thread on Rejections and Failures in TJ....may be some day we will start such thread and share some examples and finer points....


ST
 
#14
?? These appear to be double tops/bottoms, generally speaking, and can also be associated with divergence on the oscillators ??
Rejections and Failures




Rejections and failures of price breakouts are very important for alert traders as these set up very good trading opportunities in the opposite direction. So it pays to keep an eye on such breakout 'breakdown failures particularly if they come after sustained move earlier and when the market is near important support/ resistance levels.

Catching these reversals is extremely profitable as the traders trapped because of failed breakout/breakdown come to our help when they get out of their loosing positions in desparation and thereby lending us a helpful hand.....

Posted above is a Nifty Futures 5 min chart showing 3 breakout failures and 1 breakdown failure in last 2-3 days ,marked on the chart. These have caught the swing reversal points with great precision, and hence it pays to listen when the failures speak loud and clear.....and these are the kind of failures which will make alert traders successful ....:)

Smart_trade
 
#15
Hi gambler,

No, I have not seen any thread on Rejections and Failures in TJ....may be some day we will start such thread and share some examples and finer points....


ST
Dear Sir Smart_trade,

Thank you very much for the " Thoughts on Day/Swing Trading-Part 2 " thread :clapping::thumb::clap:

You have been my Guru,you'll be the ONE always. Your posts,charts and the explanations etc have been helping me a lot , of course everybody, who has been following your posts etc.

Best wishes, Sir :)
====================
 

anjanbm

Active Member
#16
Rejections and Failures




Rejections and failures of price breakouts are very important for alert traders as these set up very good trading opportunities in the opposite direction. So it pays to keep an eye on such breakout 'breakdown failures particularly if they come after sustained move earlier and when the market is near important support/ resistance levels.

Catching these reversals is extremely profitable as the traders trapped because of failed breakout/breakdown come to our help when they get out of their loosing positions in desparation and thereby lending us a helpful hand.....

Posted above is a Nifty Futures 5 min chart showing 3 breakout failures and 1 breakdown failure in last 2-3 days ,marked on the chart. These have caught the swing reversal points with great precision, and hence it pays to listen when the failures speak loud and clear.....and these are the kind of failures which will make alert traders successful ....:)

Smart_trade
Dear Smart_trade,
Thank you for starting part 2 on thoughts on day/swing trading.
Yesterday based on this rejection and failure strgy, I was not able to trade.
Have you traded on this rejections and failures yesterday, post your experience for the benefit us.
So, future we can trade on this failure and rejections and should we trade only on 5min time period or higher time period.
regards,
anjanbm
 
#17
The Market is a Friend
Quite often, we traders get frustrated at what the market is doing. We believe that somehow, the market has decided to destroy our trading career. Often, there is a lot of frustration at Market behavior, which leads to irritation and annoyance with ourselves as well as with trading.

But, truly speaking, the market is a friend. It gives us money, so it is a benevolent friend - on who showers benefits and gifts on us.

If the market is a friend, what is the reason for unusual market movements which often result in whipsaws?

The answer to this question is: What we perceive as unusual is in reality normal market behavior. Markets are a collection of thousands of traders and investors, each with different views. Sometimes, the views re similar leading to trend. often, the views are different, leading to choppy markets. That is the nature of the market.

Then, we have to adapt ourselves to the market behavior. We can control our trading decisions, therefore we have the tools to adjust to what the market is doing.

Example:

I have been long in the Nifty. Yesterday (Friday, Aug 17), it appeared that the Nifty will finally make a strong up move. Then, the CAG report was presented in Parliament leading to a sharp sudden decline. I cannot blame the market for letting me down. It is for me to adjust to changing market conditions. After the initial reaction, the Nifty stabilized around 5375, when I reduced my positions and also shifted my deep in the money calls, to a little less deep.

My point is: we have to do what we believe is the correct response to changing market behavior. It is our responsibility.
 

rajesh.singh

Well-Known Member
#18
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After long posting in TJ.
First of all a big thanks to ST Da. Learnt all the basics from his posts, chats & interactionsa big gratitude for all his support & effort.
Here , putting the different perspective based on Al Brooks way of trading price action. As we all aware market is controlled by institutions & most of their trading either based on some algo.,or HFT, or whatever name we give. & their entries & exits are always based on some calculations or any model they followwith minimal human interference.

Now on 14th we have strong b/o , a parabolic move , a strong move so we can expect the test of its high. Also the move was parabolic we should expect deep correction & we have deep correction on 16th in channel & price all the way came & tested the breakout point at Ba breakout test, to see still buyers aroundso on 17th it got strong buying from open and it made strong spike from point C-D, then we have test of 14th High, & tries to break couple of time or can say it made double top, but after forming double top, it went is tight trading rangenot breaking downmeans price was accepting that top & this was obvious by 12.05 bar on 17th after breaking down it turn into reversal bar, this means we can expect at least the Measured move based on spike C-D, i.e. the open or Low of first bar 5383-5385till the close of 9.30 bar i.e. 5402, approx.. 20 point market topped at 12.30 bar at 5423so ideal place to exit or book maximum profit. Then we had strong spike till 12.50 & its Measured move target was till Low of first bar, but this time it was overwhelmed by strong bear, so next target we can expect from Low or open of first bar till HOD, or minimum close of high, so if we deduct from the close of 12.30 bar i.e .5419 till the open of first bar, 5385(lowest target) i.e. 34 pointand days low was around 5351approx.. 34 point & it was also major trend channel line overshootso we have two major point for correction for at least 2 legand that we get first leg spike from 13.55 bar till 2 PM, bar followed by second leg based on first leg measured move target that we got on 14.25 bar.
What I observe specially in BNF & NIFTY most of the moves are based on math only.& majority of time price reacts on these calculations, either by undershooting or overshooting by few points.so many a time it looks like the price all the way came & eat the stop loss, but in reality it is just the math.
 

DanPickUp

Well-Known Member
#19
Wow, market is a friend. Dear friendforevers007, that must come from your avatar name. Hope you are fine and every thing is ok with you.

I mean, it is a nice gesture from you to be friendly, but I guess non of any floor traders or hard future or hedge fund trader is going to take any of your words in any kind seriously.

Have a nice weekend and all the best to your market friendly trading idea.

DanPickUp
 
#20
Dear Smart_trade,
Thank you for starting part 2 on thoughts on day/swing trading.
Yesterday based on this rejection and failure strgy, I was not able to trade.
Have you traded on this rejections and failures yesterday, post your experience for the benefit us.
So, future we can trade on this failure and rejections and should we trade only on 5min time period or higher time period.
regards,
anjanbm
Yes anjan, I was long when the breakout happened but reversed my position to short when I saw the low of the breakout bar being cracked .....and covered my short position at 5360-62 as there was a TDST support at 5361......

Regarding timeframe, many daytraders trade Bank nifty on 3 or 5 min timeframes and Nifty Futures on 5 or 15 min timeframe....but that depends on everyone's comfort level ...I trade NF on 5 min TF and I find it is pretty good....


Smart_trade
 
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