Today saw the Nifty rally by almost a 100 points. My submission is:
We have seen a breakdown from a trading range. Do not underestimate the power of trading range breaks. The target for this down move is 2450. While the target may or may not be met, the chances are that the down move may take the Nifty lower than 2450.
The entry rules are the starting point for a trading strategy. The strategy requires rules for catastrophic exits, trailing stops, profit targets, filters for trading or not trading.
What are 'filters for trading or not trading' ? If you are using a momentum driven entry system (like the RSI2, I explained in my previous post) then you have to avoid taking signals when there is a strong trend. (How do you define a strong trend ?). When you think about your trading startegies, you will realize that your primary effort should be towards planning your trades in totality.
2 comments:
Hello Mr Sudarshan
i am reguler follower of uor daily blogs n am very thankful to u for providing such valuble information about trading
please explain me following
'then you have to avoid taking signals when there is a strong trend. '
When you think about your trading startegies, you will realize that your primary effort should be towards planning your trades in totality
thank you
Hello Mr. Sukhani,
I have been following your comments on CNBC and on these blogs. I must say that your trading methodologies are definitely simple. They may not be extremely fruitful but surely they are a)Less risky and b)Simple to apprehend.
I am not a big trader but I do take very small positions in the market and most of them are based on my own fundamental analysis than technical. Having said that, I do enjoy listening to your comments and words of wisdom whenever you are on TV.
I do have one question for you if you can take time to answer it. In your blog "How I trade for a living" you mentioned about keeping stop losses for every trade that you bring to the market.
While the practise is unquestionably true, I just want to know how do you go about it? I am talking specifically for the overnight positions you hold. A big opening gap down/gap up can easily go beyond your stop losses. So are you suggesting that we should not be holding any naked positions (long/short) for positional trades and they should be hedged accordingly?
Your response will be greatly appreciated. Thanks
Srinivas
sriprasad.g@gmail.com
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