RAJ Trading diary

[anjanbm]

Dear Healthraj,
Can we use the methods u have mentioned in gap up or gap down markets.
regards,
anjanbm

 

[healthraj]

03-Jul-2012

As mentioned in my earlier post, the strategy using CCI and moving averages work best in the Trending market.

We would need a different strategy for the NON-TRENDING markets.

So the setup would to have
- 5 minute chart
- RSI(14) Indicator
- Plot the Support, Pivot and Resistance lines in the 5-min chart.

As you can see the RSI(14) indicator triggered a sell signal at the 9:40 AM candle near the support line.

Then at 14:05 candle the RSI(14) triggered a buy signal, where we should have closed the SHORT Positions and gone for long postions.

If we had used the above strategy we should have got around
Trade 1 = 5321 - 5286 = 35 points
Trade 2 = 5301 - 5286 = 15 points
So totally 50 points in a Range bound market

Of course the most difficult thing is to find whether the market is trending or Non-trending.

One indicator to find that out is ADX.

Otherwise in a GENERAL F@O calendar
Week 1 - Non-trending - Open positions are being made
Week 2 - Could be trending - Fight between Bulls and Bear
Week 3 - Could be trending - Fight between Bulls and Bear
Week 4 - Non-Trending - Postions are being closed

In a week the GENERAL trend is (to be taken as guidelines)
Monday - Trending/Rangebound
Tuesday - Rangebound
Wednesday - Flat
Thursday - Rangebound
Friday - Trending

So in a month only say max 6-8 days trending. The rest of the 12-14 days are Non-Trending.

Dear Healthraj,
Can we use the methods u have mentioned in gap up or gap down markets.
regards,
anjanbm

See the above post on how to trade in Rangebound market

 

[anjanbm]

Dear Healthraj,
Thanks for your reply, can u please explain todays trade on nf using your methods, for me totally confused market today.

regards,
anjanbm

 

[augubhai]

Since the market has breached today's Pivot, Ideally there was a Short opportunity below NF 5333 (OR NS 5325) only for Risky players because the indicators are not fully in place... That is the problem in the Rangebound market...

Raj,

Generally, with a few exceptions, Wednesdays tend to be rangebound. There were some discussion about this behavior in jamit's thread.

 

[emil16]

Got it thanks.

 

[anjanbm]

Raj,

Generally, with a few exceptions, Wednesdays tend to be rangebound. There were some discussion about this behavior in jamit's thread.

Dear augubhai,
Please give me the link of jamit's thread.
regards,
anjanbm

 

[healthraj]

Dear Healthraj,
Thanks for your reply, can u please explain todays trade on nf using your methods, for me totally confused market today.

regards,
anjanbm

Hi,

Today there was no triggers for any trade using the indicators per se. But If you look at the RSI signal it generated a Sell signal at yesterday close of Day. And today the market opened Gap down. So you could have Short at the High levels.

Today as I had given the levels, you could also have traded Short below the Pivot (risky though to take this call because the indicators are not in place). As told to you, today the market touched NS 5300 (NS support 1 was at 5303) and then bounced back to Pivot (NF 5335).

So you could have also gone LONG at NS 5303...

So net net you would have made 50 points.

In a rangebound market you cannot rely too much on the indicators...

 

[healthraj]

INFY Results tomorrow

Since INFY results are due tomorrow and INFY was trading around 2475, I took 75 OTM strangle strategy in Options. ie Buy 2550 CE and 2400 PE. Today it closed with a profit of 18 points. Since normally INFY results are available before the opening of the market, if there is anything big, INFY would normally open with a GAP UP or GAP DOWN.

People can try the same strategy for TCS tomorrow.

In the past 10 days TCS has been trading in the range of 1225 and 1285 - 60 points or 5% range. So if TCS is available around 1255, you can go for a 50 OTM strangle strategy. ie Buy 1200 PE and 1300 CE. Please execute after the INFY results because normally If INFY is good TCS would be flat/negative and vice versa. People say TCS is also trading at the high levels becuase in the last 3 months TCS Stock has jumped 15%.... So the bias for TCS is flat to negative.... Same way the Bias for INFY is flat to positive...

Tomorrow we can see the results on our screen...

 

[healthraj]

INFY Results tomorrow

Since INFY results are due tomorrow and INFY was trading around 2475, I took 75 OTM strangle strategy in Options. ie Buy 2550 CE and 2400 PE. Today it closed with a profit of 18 points. Since normally INFY results are available before the opening of the market, if there is anything big, INFY would normally open with a GAP UP or GAP DOWN.

People can try the same strategy for TCS tomorrow.

In the past 10 days TCS has been trading in the range of 1225 and 1285 - 60 points or 5% range. So if TCS is available around 1255, you can go for a 50 OTM strangle strategy. ie Buy 1200 PE and 1300 CE. Please execute after the INFY results because normally If INFY is good TCS would be flat/negative and vice versa. People say TCS is also trading at the high levels becuase in the last 3 months TCS Stock has jumped 15%.... So the bias for TCS is flat to negative.... Same way the Bias for INFY is flat to positive...

Tomorrow we can see the results on our screen...

INFY Results are negative.

 

[healthraj]

12-Jul-2012

INFY Results are NEGATIVE.
IIP Numbers positive....

But I think the INFY Results will weigh more than the IIP numbers...

Market outlook is Negative and Trending. So not giving any levels today

So you can trade as per the TRENDING Methods using CCI, ADX and EMA Cross over.