Charts for the Day

[jain.er]

Anil ji I am having a big doubt regarding entry..
Suppose a resistance/support is broken convincingly on good vols. shall one plunge into it or wait for a pullback (which may or may not happen) or it depends on market situation.

Also please suggest how shall I determine my stop losses for positional trades,
I have often seen the stop losses being hit but the stock bounces back from those levels

 

[anil_s_trivedi]

Anil ji I am having a big doubt regarding entry..
Suppose a resistance/support is broken convincingly on good vols. shall one plunge into it or wait for a pullback (which may or may not happen) or it depends on market situation.

Also please suggest how shall I determine my stop losses for positional trades,
I have often seen the stop losses being hit but the stock bounces back from those levels

Dear jain.er,


We already have discussion on this in this thread. Breaking of support/Resistance is to be look out on a multiple basis, then only you can have increasing chances of success. I mean if the bar before upside breakout is a down bar, then chances of valid breakout bar increases, as it tells yesterdays short got trapped badly.
Angle of trendlines too give some clues. Ex. for rising channel breakout will be a throwover or if with gap then expect a almost a vertical rally
Generally it is observed by me, for falling channel upside breakout tests the region/level of breakout not exactly the trendline in itself. I mean if got breakout at 98 then it may have pullback till 98 but not necessarily till trendline.I am attaching an chart for explanation.
The moving average setup also tells if breakout can be good one or bad one.
A overhead 200 DMA and falling, clearly implies downside pressure, now any trendline upside breakout need to be assess carefully, as failure rate increases here.

Regarding stoploss there is no perfect rule it depends on your risk/timeframe in which you want to trade. For ex if am trading nifty then my preference is maximum 20 points stoploss for 50 points gain.
And if your stoploss are getting triggered 8/10 times then definately you need to have risk/reward rules revised. But yes it imbibes discipline.

I posted one long trade few days back and posted chart at eod how i traded, also i exited the same day. One trader post a message to me, why i exited, tomorrow may be gap up. I said, first is was my intraday trade, i dont convert to positional. Secondly it tested our resistance zone 5720 and closed below it. And any trial of breaking resistance/supports after 3 pm raises a doubt. so i exited. Luckily next day was down day.
So point is, its your trade and your money, you know what stoploss to be placed. A 3% rule may be good for someone not necessarily to you too.

Another incident is my fridays post, where i told market may turnup from 5660, and it did. But frankly its a lucky escape. As what i studied, any good resistance/support zone i mentioned i want to see market turning away from atleast 4-6 points, then only its a good support/resistance zone, otherwise if it is going to kiss your level, then its a lucky escape for you, nothing great in your analysis. So my fridays analysis was lucky escape. I admit it, not a good analysis.
And please avoid placing stoplosses to round numbers.

 

[anil_s_trivedi]

As seen from USD-INR chart the recent fall, seems to be a three legged correction.
Question is whether its done or not. Price projection of third leg completed 161.8%, and stock showing decent bounce from that level
Prices currently got hold off, as upper BB flattening and lower one still rising, implying a sideways move in coming days
RSI bounced off above 50 levels, and still holding it
Recent rise from october lows is trading closer to 61.8%(Red lines) retracement

Expectation: Sideways move

 

[Tharu]

Anil ji.. Need ur advice... I dunno where I am going wrong... A little confused whether I have a solid strategy... Ll put down wat I am doing or did.. Please guide me...
I trade in options... I prefer stock options over index options coz I don't feel comfortable with wild swings... I look for unidirectional movement.. I trade only with nifty stocks that are liquid in options... That cuts my watch list to 20..
First, I look for Relative strength of Stock with index in 5 min chart.. I ignore the gaps.. No trades in first 30 min.. If stock is making higher low while index making a lower low, I look at stochastic... If it says overbought, I wait for it to cool off and then enter on the stochastic crossover..
Many days, 4 to 5 stocks behave like this... And I don't have anything other bid/spread quants to tell where the buying interest is... Few times it has worked out, but many times it failed as it is not a constant factor and am looking for movement in one direction.. So I pick some stock looking how it performed the previous day and its support and resistance level.. Still am on the losing side... Wat should be my second level of scrutiny..?? Is this even a strategy..?? Few times I have hit the nail.. But many times, I just end up entering the wrong one where my other picks would be rallying.. It also screws my confidence a lot.. Need ur valuable input..

 

[anil_s_trivedi]

Anil ji.. Need ur advice... I dunno where I am going wrong... A little confused whether I have a solid strategy... Ll put down wat I am doing or did.. Please guide me...
I trade in options... I prefer stock options over index options coz I don't feel comfortable with wild swings... I look for unidirectional movement.. I trade only with nifty stocks that are liquid in options... That cuts my watch list to 20..
First, I look for Relative strength of Stock with index in 5 min chart.. I ignore the gaps.. No trades in first 30 min.. If stock is making higher low while index making a lower low, I look at stochastic... If it says overbought, I wait for it to cool off and then enter on the stochastic crossover..
Many days, 4 to 5 stocks behave like this... And I don't have anything other bid/spread quants to tell where the buying interest is... Few times it has worked out, but many times it failed as it is not a constant factor and am looking for movement in one direction.. So I pick some stock looking how it performed the previous day and its support and resistance level.. Still am on the losing side... Wat should be my second level of scrutiny..?? Is this even a strategy..?? Few times I have hit the nail.. But many times, I just end up entering the wrong one where my other picks would be rallying.. It also screws my confidence a lot.. Need ur valuable input..

Dear Tharu,

There are many questions i need to ask. I will tell you after market hours.
Now i want to show you something, which i missed due to lack of volume in options segment. I was looking PFC chart previous week, it is showing -ve div, but still rising, so i was sure it needed to cool down, and i want to go on this scrip with short view. So option was either go short in futures or SELL CALL option. I chooses to CALL option, as i am sure it is expiry week, even if it need not fall, it will not rise much. So chooses PFC 200 CALL option. Market opened near to 210, PFC 200 CALL at Rs.10(lot size-2000)i am ready with may analysis. I know the trendline break will be at 205 and 5 ema at 204.35. But in 5min chart i got good entry when stock breached 207.35 and i put order to sold at 9.25, but due to lack of volume i missed it. Stock corrected till my first TGT 200.5 and then 196 my final TGT. The option got reduced to 2.4, i missed my profit trade of (9.25-2.4)*2000=13,700. Obviously option value gone to more lower, but i am happy with my TGTs.
So moral is, never trade lack of volume securities. And keep your analysis simple. with TGts in mind. If TGt comes, dont think twice, take your money off the table, Leave something for others too.

So in short it was my intraday trade. And i am clear what i wanna do. If you are trading on 5min charts, your analysis should come from daily/hourly/5min like that. And i always say place more emphasis on daily 5 EMA, it will guide you, and 10 EMA is like for positional traders. I love these two averages.
They hold good on monthly charts too. So your timeframe is according to your risk appetite.
Keep everything simple, and take higher probability trades only, no one can tell which one will succeed but you had to figured it out with your risk appetite.

 

[prst]

Anil ji.. Need ur advice... I dunno where I am going wrong... A little confused whether I have a solid strategy... Ll put down wat I am doing or did.. Please guide me...
I trade in options... I prefer stock options over index options coz I don't feel comfortable with wild swings... I look for unidirectional movement.. I trade only with nifty stocks that are liquid in options... That cuts my watch list to 20..
First, I look for Relative strength of Stock with index in 5 min chart.. I ignore the gaps.. No trades in first 30 min.. If stock is making higher low while index making a lower low, I look at stochastic... If it says overbought, I wait for it to cool off and then enter on the stochastic crossover..
Many days, 4 to 5 stocks behave like this... And I don't have anything other bid/spread quants to tell where the buying interest is... Few times it has worked out, but many times it failed as it is not a constant factor and am looking for movement in one direction.. So I pick some stock looking how it performed the previous day and its support and resistance level.. Still am on the losing side... Wat should be my second level of scrutiny..?? Is this even a strategy..?? Few times I have hit the nail.. But many times, I just end up entering the wrong one where my other picks would be rallying.. It also screws my confidence a lot.. Need ur valuable input..

just a friendly advise.
always tread with caution while going for options.
its a different beast altogether, though looks like easy money.
comparatively , futures looks safer..

 

[Tharu]

just a friendly advise.
always tread with caution while going for options.
its a different beast altogether, though looks like easy money.
comparatively , futures looks safer..

Yeah.. Thanx prst... Its definitely a beast... 95% of my portfolio is in cash.. I am still doing well as an investor.. Trying these with my generated profit as i don't want to put more money for practicing intraday trading.. As futures require more cap than options, i am going for it.. Any suggestions..??

 

[Tharu]

Dear Tharu,

There are many questions i need to ask. I will tell you after market hours.
Now i want to show you something, which i missed due to lack of volume in options segment. I was looking PFC chart previous week, it is showing -ve div, but still rising, so i was sure it needed to cool down, and i want to go on this scrip with short view. So option was either go short in futures or SELL CALL option. I chooses to CALL option, as i am sure it is expiry week, even if it need not fall, it will not rise much. So chooses PFC 200 CALL option. Market opened near to 210, PFC 200 CALL at Rs.10(lot size-2000)i am ready with may analysis. I know the trendline break will be at 205 and 5 ema at 204.35. But in 5min chart i got good entry when stock breached 207.35 and i put order to sold at 9.25, but due to lack of volume i missed it. Stock corrected till my first TGT 200.5 and then 196 my final TGT. The option got reduced to 2.4, i missed my profit trade of (9.25-2.4)*2000=13,700. Obviously option value gone to more lower, but i am happy with my TGTs.
So moral is, never trade lack of volume securities. And keep your analysis simple. with TGts in mind. If TGt comes, dont think twice, take your money off the table, Leave something for others too.

So in short it was my intraday trade. And i am clear what i wanna do. If you are trading on 5min charts, your analysis should come from daily/hourly/5min like that. And i always say place more emphasis on daily 5 EMA, it will guide you, and 10 EMA is like for positional traders. I love these two averages.
They hold good on monthly charts too. So your timeframe is according to your risk appetite.
Keep everything simple, and take higher probability trades only, no one can tell which one will succeed but you had to figured it out with your risk appetite.

Yeah.. May be I should start writing options.. I was watching sterlite going nowhere last month.. Could have done that.. Will give it a try in the next series..

 

[anil_s_trivedi]

Yeah.. May be I should start writing options.. I was watching sterlite going nowhere last month.. Could have done that.. Will give it a try in the next series..

Dear Tharu,

Writing is double dangerous... as losses unlimited if you failed to follow discipline...My emphasis is on keep 2-3 stage screening, and then select best on risk-reward parameter...
There is no single recipe for trading success...if you are having good investment corpus, thats good, my advise trade only one security at time, in initial phase. F&O attracts many as it involves less money, more leverage, but ultimately my observation is, i met only few may be 1/100 traders who know what he is doing..rest all are just following his/her strategy. and in the end, leave blaming stock market. Its a story almost every other trader goes into.
I dont know, what purpose F&O serves..stock market are there for companies to raise capital for their business, but repercussions are devastating with introduction of F&O...Man has lost patience in everything, he want everything instant, thats why some pay price for it...

 

[anil_s_trivedi]

Nifty 5min with our newer tool of Fibonacci levels projection from first 5min bar.
See how falling moving averages, and prices resisting at crucial levels, gives a entry points.
Anyways price action is weak till now, and bounce will face likely resistance closer to 5670 levels
On downside it seems a testing of sub 5620 levels on cards
More weakness on breach of 5580-90 levels