What causes such a steep decline suddenly?

[carbonway]

This is the Infosys chart for today.
There was a steep decline from 2325 to 2304! That`s 21 points in under some seconds.

Can a single big trader have the power to move a price at this scale?

 

[carbonway]

many traders having years of experience might be knowing the answer.
Anyone have any suggestions?
I almost lost money on that one, but I held on to my position even though it collapsed. I had not put a stop loss since it went down just after I took position. Just din`t get the time to apply a stop loss.

 

[avad]

Dude such freaky moves can and will happen ...as a trader dont overanalyze. Stoploss saves us from such moves ..

 

[TraderDude]

carbonway,

you are gambling trading infy on a small time frame. One small move on infy can take out your stop even if you had one. you would need large stop and if that is the case , then you are risking to much...meaning you are gambling..

I suggest you switch to daily TF.

 

[carbonway]

carbonway,

you are gambling trading infy on a small time frame. One small move on infy can take out your stop even if you had one. you would need large stop and if that is the case , then you are risking to much...meaning you are gambling..

I suggest you switch to daily TF.

I am using ChartNexus and its great to get a quick idea of what the previous day and before were even though it does not have detailed charts at all in the free version, but I have started liking it.

How would one trade with a stock like Infy watching daily time frame?
Does a trader have to predict which way the stock will move for the day and then take position and forget until it reaches its peak profit point for exit?

I need to learn a lot yet and I am thankful to you for suggesting me the right direction.

 

[carbonway]

Dude such freaky moves can and will happen ...as a trader dont overanalyze. Stoploss saves us from such moves ..

That freaky move felt like someone stabbing me with a knife. Its obvious to get curious as a not so experienced trader when having position in the stock and such a freaky move appears.

You have a cool attitude just like a river. You do not resist or worry but make your way around it. :thumb:

and Thanks

 

[TraderDude]

I am using ChartNexus and its great to get a quick idea of what the previous day and before were even though it does not have detailed charts at all in the free version, but I have started liking it.

How would one trade with a stock like Infy watching daily time frame?
Does a trader have to predict which way the stock will move for the day and then take position and forget until it reaches its peak profit point for exit?

I need to learn a lot yet and I am thankful to you for suggesting me the right direction.

Young padawan , learn you have much to.

 

[Reggie]

A large drop in a short time frame is a result of large sell order. (See the spike in volume bar) The variation of this move is a price drop over a period of a few hours...

The psychololgical reasoning behind such moves is to 'shake off' weaker hands or those with close stop loss levels, with a view to buy/accumulate the stock at a cheaper price.

Many times you can notice this in an EOD candle. After a 2-3 days of small upmoves, one day there is a big green candle. The next day, the stock will open high, and move higher. Those reading chart, will have a bullish view on the stock and would buy on higher high/gap up (at open) or on seeing the stock move higher after open. Then by mid-day the stock will start to move down, and give up today's upmove as well as that of the previous day. The stock will touch the previous day low, where most of the new buyers will sell out.

Smart money now gets the opportunity to buy the stock at low price when the stop losses get triggered.

Placing a buy at the close of the previous day candle low is a good strategy, or to be patient and wait for a retracement of an upmove.

Also, this would mean that the Stop Loss has to be placed well below the psychological level where it can be triggered.

 

[TraderDude]

you can do this everyday , all day..i just wish i had the time..

Pick any stock you want for day trading..i have shown you below how you can day trade nifty using dailies with simple knowledge of support and resistance.

You can do this with any stock you want..

 

[carbonway]

Traderdude
Thank you a million times for giving such an excellent explanation:thanx:
It was the fastest and easiest way of learning daily TF for me :thumb:

I am gonna enjoy practicing and applying your teachings in Trading.

please see below in the chart if I have selected the right 2 places to put a limit order.The reason to choose both of them is because the 2350 line is acting as support and it indicates that the stock price will jump up.