So this is the chart of TataSteel-Apr-27 Future.
If you see the second candle of the day, it went high strong bullish from 488.79 to 493.26, and it does so with good volume !!
But the next one was a reversal.
So, my question is - Is it recommended to dive in to trade with the first strong bullish voluminous candle you see? Or should you wait for the next candle in same direction with same strength. (I know we can always put a stop loss and enter the trade and trail the SL later - but is it recommended to enter?)
There might be several cases here:
1) The next candle might be bearish (as happened in this chart).
2) The same candle might retrace back (kind of shooting star)
3) The next candle might be a doji, if the first candle went high enough - followed by reversal.
3) The next candle might not go that high, may be only 0.5 (not even 1).
Although from daily chart perspective - yes, it was going down, but you never know where the retracement is.
Thanks a lot in advance.
I trade generally on Sharekhan, and in case of futures i do not re-enter same trade again on different direction (bullish then bearish type of) because they change the BPL (Booked profit and Loss) even if the previous position is closed, and that is real confusing. So i re-enter either using options (if i am optimistic it will go further) or equity-cash-market (if not much sure.)