Trading NR7 setup

[lazytrader]

Can you give me the time range for the triangle you are talking about. I'm not sure which triangle you are talking about.

For a NR setup, you know that it would be an NR on the particular day itself most probably confirm it by 3PM so you take neutral positio expecting a move on the next day. Or else wait for a breakout on the next day on the charts and go with it.

There were no NR days before budget day. I'm not quite getting what you meant.

 

[myvineet]

Can you give me the time range for the triangle you are talking about. I'm not sure which triangle you are talking about.

For a NR setup, you know that it would be an NR on the particular day itself most probably confirm it by 3PM so you take neutral positio expecting a move on the next day. Or else wait for a breakout on the next day on the charts and go with it.

There were no NR days before budget day. I'm not quite getting what you meant.

satya is talking about this triangle....

regards

 

[lazytrader]

There are very few candles in the triangle so it would be better to switch down to 10-15min charts where you have more candles. When you switch down you will see that the price distribution in the triangle is skewed. I wouldn't try to draw a symmetric triangle on a smaller timeframe. You'll see other patterns.

So lets stick to this chart and if I were to draw a symmetric triangle then I would look for a even price distribution in the triangle (not sticking to the top or bottom edge) with prices bouncing off the top and bottom edge atleast twice.
Symmetric triangle has a target. I've drawn the symmetric triangle and the target.

I don't feel the pattern should have affected your trading on that day. "On budget day there is a breakdown" enough reason to short for anyone. It is the most important day of the year. I shorted at 4385 because 1.It was the pivot 2.If it broke 4400 then more downside is likely.

 

[WOD]

There are very few candles in the triangle so it would be better to switch down to 10-15min charts where you have more candles. When you switch down you will see that the price distribution in the triangle is skewed. I wouldn't try to draw a symmetric triangle on a smaller timeframe. You'll see other patterns.

So lets stick to this chart and if I were to draw a symmetric triangle then I would look for a even price distribution in the triangle (not sticking to the top or bottom edge) with prices bouncing off the top and bottom edge atleast twice.
Symmetric triangle has a target. I've drawn the symmetric triangle and the target.

I don't feel the pattern should have affected your trading on that day. "On budget day there is a breakdown" enough reason to short for anyone. It is the most important day of the year. I shorted at 4385 because 1.It was the pivot 2.If it broke 4400 then more downside is likely.

Excellent LT....price distribution acros pattern is something I learned new in TA

 

[lazytrader]

Excellent LT....price distribution acros pattern is something I learned new in TA

I didn't mean in every pattern just patterns that are unbiased like a rectangle (horizontal channel), symmetric triangle etc. If you look at bullish or bearish patterns like a wedge or ascending/descending triangles you'll see the price trading near an edge more often. If you have enough candles in a pattern then you'll be able to see more patterns within larger patterns.

 

[Satyen]

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Hi LT i was saying about this pattern on friday before the moday budget day ... what i was tryin to say is that before big day market participant were indecisive mode so price was moving in a consolidation / pattern we just got the messege that market sitting in these area waiting for a triger and we dont know what will it be .......... and in 2nd half of the day it broke out to upside we traded expecting / knowing price tells the story before it happens .... then on budget day this break out negeted indicating the break out ( Wo ever done that ) a false one and participant who were long on friday were wrong ........here lot of people will not trade the second trade when their Stop hit ..... but as we have seen market spent some time in indecission mode and it has only a wrong attempt to break out to upside there was less chance that after stop hit it will again go into Sideways movement again ... so the pivot break at Blue line is a must trade for me

This is how i was thinking on those days may be wrong or have some ambiguity in my thought process ..... but i traded on this thought only

Hope to hear more from you

 

[lazytrader]

Still won't call it a failed pattern. It almost made it and if the budget started an hour or two later it would have definitely made it. At the end of the day it was still rising and rose on the budget day as well. It is a 3 day pattern so you would need to give it 3 days to complete.

While price factors everything in, I'm not sure that price can factor in the budget.

On budget day it is important to go with the budget than charts. Budget affects both short and long term. I feel it is not wise to combined budget with chart patterns because one is fundamental and another technical with don't usually go together so budget takes precedence.

If we were to assume there was no budget on monday and markets tanked without any reason then it would be right to go long on break out and then reverse. I think it is better to go short at the horizontal red line because after breakout it is support slipping back into the triangle is a break of support. It may depend on the trader though.

The two charts are very different how is that? (your amibroker and icharts)

 

[Satyen]

No different Chart LT here is the icharts chart below ....

Again dont follow fundamental news so closely budget day was a event which can afect the market sentiment nothing else i knew about this even did not listen the speech ..... infact dont see tv during markets ..... I am comfertable with Pivots so took trade only after the blue line pivot break ...... Yes it may have achieved target but my aim was to find when market moves so thought after that indecission it may be good idea to trade ....

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[AW10]

My views on this discussion -

Still won't call it a failed pattern. It almost made it and if the budget started an hour or two later it would have definitely made it. At the end of the day it was still rising and rose on the budget day as well. It is a 3 day pattern so you would need to give it 3 days to complete.

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On hrly chart the pattern took 15+ bars to make it..and if it couldn't last even 1/2 of those many bars.

While price factors everything in, I'm not sure that price can factor in the budget.

IMO, events act as catalyst to price move. On charts, 4500 was anyway a resistence level. It took many bars to fall from there too 4250 level..but budget frenzy took just 5 bars to go back to same resistence
level and finally Resistence zone did what they are supposed to do... i.e. act as resistence and push the prices down..
Impatience traders / or traders who go by the rule book, find it difficult to handle..whereas if we give time to the price action to develop, the picture becomes quite clear..

On budget day it is important to go with the budget than charts. Budget affects both short and long term. I feel it is not wise to combined budget with chart patterns because one is fundamental and another technical with don't usually go together so budget takes precedence.

If you go by the budget day and price action post budget day.. (Sunil has posted outstanding analysis on that in seperate thread of budget weekend).. two messages were pretty clear
1) Budget days have wide range..
2) Market falls after budget in more then 80% of the time.

This time again, price action just repeated the history (no brainer for person who trusts the chart ).
I will consider budget as earthquack event.. but they are predictable as we know when they are coming.. (known devil is easier to handle then unknowns)

If we were to assume there was no budget on monday and markets tanked without any reason then it would be right to go long on break out and then reverse. I think it is better to go short at the horizontal red line because after breakout it is support slipping back into the triangle is a break of support. It may depend on the trader though.

We all may have different way to trade same pattern due to our own approach. Even if someone has gone long on ascending triangle breakout.. the initial stop would have been in the triangle zone (base or upward sloping line or projected apex of triangle).. It the stops were not moved to breakeven then still the trade would have been closed on Monday when market dropped below the stoplevel.

Starting short trade is just another trade. Some may consider triangle breakout as false breakout (price could not hold above breakout level for sufficient #of bars), or can call it double top at 4500 level, or reversal from right shoulder of H&S pattern there or divergence on the oscillators. All depends on what we want to see on the chart.. None of the approach or logic is wrong.

Hope we are enjoying the breakdown..

Happy Trading.

 

[Satyen]

Thanks ........this shows how little i know and confined to some perticular logic of triangle.. Any way thanks again