When all is said and done, more is said than done
It is easy to write about the markets, to discuss a point of view, or to point out the errors in thinking by fellow traders & financial market participants (not me, everyone else!).
As traders, we also have to take buy and sell decisions. Such decisions are unlikely to be perfect. Technical Analysis forms the basis of my decision making. On Friday, the Nifty made an NR7 (Please see earlier post). Today, the Nifty opened with an up gap. An intra day dip was a buying opportunity. Now, it is decision taking time. Should I go long, or procrastinate ? It is so much easier to "watch" the market, waiting for additional cues. But, trading is about waiting for your setup to come in place, then pulling the trigger. Therefore, I am long in the Nifty, as well as in individual stocks. My volumes are much lower than normal - this is because I am trying to catch a short term up trend in what is an intermediate down trend. I also have in place an exit strategy - my stop loss, a profit target zone & a trailing stop.
Is this trade going to make money ? I really have no way to answer this question, nor do I wish to. If I follow my rules, then my trading is going well. As the Bhagavad Gita (The Song Divine) tells us: "Do your duty, then leave the fruits of your labor to God".
Here is a brief description of the trade: The Nifty fell to its January / March lows at 4400. During the past week, it touched 4400 twice, then bounced back. On Friday, the Nifty closed at 4500+ also making an NR7 in the process. The NR7 is a trigger to enter a reversal / continuation trade. In this case it is a reversal from down to up.
The trade is assumed to have gone wrong if the Lows of the NR7 day are taken out on a closing basis. This will be a whipsaw, but that's what trading is all about.
I am a short term trader, mainly into swing & day trading. I have explained a swing trade that I have taken in Nifty Futures.