What caused this unexpected move?

[TracerBullet]

Thanks for your detailed answer.

At least for some time I am going to test the hypothesis that markets is not a combo of random things, and that there is some science some commonality behind the apparent madness..

Not everything is random, but a lot of it is random and noisy. Fibs etc have no value i think, whatever you find works for a particular ratio, its likely it works for adjacent ratios too. The concept might be more important that a particular number itself. There is no magic number. In my own trading, i can move the parameters around without destroying the edge too much.
Markets are remarkable in that way - after large sample, all manner of reasonable trade management rules get to similar final numbers.

Edges do exist, and indian markets may be less competitive vs global markets, so it might be easier. But its not easy.

Anyway, good luck to you, some things will take time to figure out. Best i can say is test everything - discretionary or mech rules - with good sample size, start trading with small capital, you will likely lose at first , it takes time to learn trading and to get into probabilistic mindset, drawdowns happen and are not avoidable, they suck but - you can make money if you find a good edge and execute it without too many mistakes. And too much leverage can kill.

 

[sva31855]

Edges do exist, and indian markets may be less competitive vs global markets, so it might be easier. But its not easy.

This is great dot. I am quite keen to understand differences between Indian markets and global. But this is such an imp topic that I will raise another thread for it.

 

[sva31855]

Question: Close above TL was a bullish signal (see red arrow). Why then the stock not open gap up the next day (1 Feb 19)?

My WIP theory: Coz gaps are mostly caused by Inst investors. And TL-based trades are mostly taken by Traders.

Any inputs?

 

[sva31855]

Hi all,

Today I experienced an inexplicable move (at red arrow) in HDFC Life.

View attachment 45268

It was giving me +1.7R in first 3min itself. I held on. But then it reversed sharply in second candle, and hit my SL (-1R). But then I entered again and gained +2R. But why did it first hit my SL? How could I have known it?

My theory: I think it happened because it went down too fast in first 5-min candle. This may have led to profit booking and then a belief that trend was reversing.

Can anyone tell me his view on why this would have happened? I am looking for specific answers to a specific question. Thanks!

My revised theory: It had fallen down sharply in first 2-min itself. So quick Profit booking came in, which moved the price up. Then, since it had been moving in channel in past 1-2 days, counter-trenders thought that it will move up till UTL. So it moved up till UTL. And then immediately shorters again bet on down move.