First, it is not neccessary to trade every day. Traders should wait for proper setups - a confluence of a number of positive elements.
Second, Traders can adjust to uncertain trading environment by modifying their bet size - the volume. Trade small when the technical position is unclear.
After Friday's big rally, today was expected to be uncertain, even a narrower range. Both turned out to be true. As explained over the weekend, with the Nifty in an intermediate up trend, the strategy should be to buy on dips. This strategy should have given small rewards today.
Monday has seen a narrow range in trading, yet again. We should expect the contraction to lead to an expansion in prices, soon enough (maybe tomorrow). Given the intermediate up trend, prices should break on the upside. A move below 4380 will suggest short term weakness. Short Term Traders should identify early morning momentum, then look to buy while the Nifty stays above 4380. What happens if the Index goes below 4380 ? Well, you can stay away, or take a short position fully understanding that the short position is counter to the intermediate up trend.
This is the second post for Monday. The first post can be read by scrolling below.