Thoughts on Day/Swing Trading Part 2

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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.

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 STsir,
what is difference between Rejections and Failures ?

Regards

Dear ST, thanks for your last few post and thanks to Rajesh.singh to second what I see in my markets now for quit a while.

I am one of the guys which prefers to trade on maths and that is what I told a long time ago.

Now to your kind of trading: Do you trade any morning break out system or do you even have one?

DanPickUp

Dear ST

That is not a secret science: Most simple math is the Standard deviation, as this is the classic for options. Works good with options some times and other times it is a pain in the ......... as every other what ever.

No perfect things in trading as you know it by your self. There are even very different kind of Pivot calculation systems and some of them work now and others you have to adjust by going, as you do quickly long if short or vice verse. The problem is how fast it is done.

Pros just do it and others hope. That is why I respect you: You do it.

There are a bit more quieter ways to do it. To go further would need some understanding of hedged strategies. But as this is a pure future thread, I not going to post on such stuff here.

Good trading

DanPickUp

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

Price breaks out above a Pivot High , closes above it and in next few bars, the price is unable to hold above the pivot high and closes below it .....that is Rejection.

Price breaks out above a Pivot High , and the same bar is unable to close above the pivot high and sells off and closes below the pivot high ....that is Failure.

So yesterday's price action was a Rejection of pivot high breakout as the market closed above the pivot high and in subsequent bars there was rejection of pivot high breakout. On 16th Aug 2012 both examples are of breakout and breakdown Failures .....

Smart_trade