AnshulTPT Writes:
Quote
I normally follow EOD CHARTS as Im not a day trader.
Therefore logically my stops should be placed on a closing basis.
However this becomes too risky as nifty is a wild creature.
HENCE Im forced to place stops on an intra day basis.
Many a times these stops get hit on an intraday basis but the closing price turns out to be far away from the price.
This causes great frustration.
UnQuote
My Notes:
Traders who trade off End OF Day charts should try to place their stops on a closing basis. This ensures that intra day volatility does not affect the trade. The closing price represents the final convergenc of views, therefore it is the best measure of deciding to stay in the trade or exit.
The risk is that by the time the close is reached, the market may have moved significantly away from the trade, causing large losses.
But there are rewards also. First, intra day volatility is avoided. Second, sometime the close may provide a more favorable price to exit.
There is a trade-off. You should examine your charts for a number of months and ascertain the type of stop loss which provides superior results. If the close only stop loss is superior then you have to sacrifice the gains that may sometimes be possible on intra day stops.
It's not easy. But, if your concepts are clear, your volume is within limts then you have to condition yourself to accept the whipsaws that every strategy will cause.
Cheers!
July 2 2010
4 weeks ago
Posts
6 comments:
Sir please explain me how to use 5 minute chart for intraday?what time frame we have to consider.
Warm regards
Sir
Can you write something on letting your profits run .
I have done lots of trade , where i let it run , but then I have to give all my gains to market back , and when i book it , the trade keeps on going in my favour and i loose a big money :(
Some solutions which look good to me are
partial profit booking on some portion and letting rest run till it reverses .
what should be the psuchological solution to this or some techniques , It would be great if you can write something on this and teach us :)
Manish
hello,sir, please share my views on current market conditions,,,,,,,
IMPORTANT SIGNS OF A MAJOR REVIVAL....2512 FOR NIFTY WAS THE LAST SUPPORT SUGGESTED IN MY LAST UPDATION...WAS HELD NICELY..AND A BIG RALLY STARTED FROM THAT POINT AROUND,,NOW WHAT ??...HERE ARE SOME MAJOR SIGNS WHICH SUGGESTS THAT WE MAY HAVE HIT THE BOTTOM
first major sign is when majority of stocks simply ignore immediate resistances,like earlier lows,fibonacci resistance levels and latest trendline resistances,THIS HAS HAPPENED IN MOST OF THE MAJOR STOCKS.
second important point is that when a severe downtrend continues its journey,ossilators responds to rallies with heavy price falls,,than in corrections (sideways mooves),price moves up as ossilator goes down and moves down as it goes up,,and suddenly a move starts when ossilators starts ignoring price rise,,this is the first sign of a new move(in other direction starting).
other important thing tobe noted is that seemingly DISRIBUTION phase turns out tobe CONSOLIDATION, when a major bear phase ends.the broad range was 2630...2950..even a close below 2630,was unable to drag nifty below 2512.
and certain sectors or leading shares makes their respective bottoms atleast ONE bear phase ahead of indices.consumer goods,,,power sector and reliance are the examples in the current rally
election.....generally markets dicounts the future very well,in our case looking at the strenth of the ongoing rally .just before the general elections ,we can presume that we will have a good n strong government in place after elections...no place for mayavati or for that matter the so called third front,,which can possibly destabilize the economy in a big way.
dow hns weekly....looking at the weekly chart of dow ,i feel that (as impact of us markets is very very huge on the whole world markets).theres a wekkly inverted h&s pattern developing,,it all depends upon how next few week passes on for the us markets,if the pattern completes, we may have hit a real bottom....bjnaik@hotmail.com
Sir as u said trend is down,today we closed above 3050,still trend turns down or is it reversed?
please guide me.
hello sir,i have been learning ta since last 3 years,,i have always been eagerly waiting for your post and i never miss-out your cnbc interview,,you are a real help for both traders and students of the subject..i have a question regarding stochastics,,which if you answer will be very helpful,stochastics is not always giving good results when in overbought or oversold zones,,in major books its been advised to sell when its above 80 and to buy when its below 20,,as a major interpretation,but when i try to use it in this way..it gives me loosing trade many a times...please help me learn how to use it...sujal gandhi
Dear Sujal,
while we all wait for Sudarshanji to answer you, I wanted to share my thought. Stochastic will not work well in a strongly trending market, since it can stay oversold or overbought for many trading hours, days or weeks ( whichever time frame it is being used for) .
Which is why one strategy could be to wait for stochastic to go above 80 and then wait for it to reverse and come out below 80 and use that as a trigger to sell. Similarly for oversold, wait for it to go below 20 and come out above 20 and use that as trigger to buy.
Naturally, this will also not work all the time (that is why you must have stop loss), but this may increase number of winning trades and reduce number of losing trades.
Also note that you can also use 90 and 10 as threshold. Trading continues to be an art and each artist has their own style.
Regards, ....
Post a Comment