"In todays blog you are of the view that a small correction may have started, but on tv you were reluctant to go short at the end of the day. I was short on the markets but i hurriedly covered after your comments. "
My Notes: I do feel that we may be looking at a small correction. But a correction is a move against the main trend, which should be left alone.
First, We have enough evidence to suggest that this is a strong up trend. So, going short is trying to go against the trend.
Second, the Nifty has a consistent pattern of a range expansion, then a series of consolidating bars. The minor weakness may infact be part of the consolidation. Not easy to trade!
Third, we are seeing a holiday on Monday. So, we have two days in which international markets will influence us without our response. Who knows how the markets may open on Tuesday morning. I said on TV "The best approach is to go flat. But, if you want a trade, you should be long, since the trend remains up".
Now, I have explained the reasons for my view. I also have a suggestion. When you take a trade, have a clear view. Write down these ideas on paper also - (a) Identify the reason for the trade, (b) A Stop Loss, (c) A profit target or trailing stop mechanism (d) The point at which you accept that the trade is not working even if the stop did not hit. (e) Number of shares / contracts that you will hold. Keep in mind that your loss on a single trade should not be more than x% of your capital (you decide the x%) (f) maintain a trading journal in which you write every evening, without fail.
Once you follow these ideas with discipline, you will realize that you will never react to any talk on TV. That will be the 'A-ha' moment for you.
Nitin Damle asks:
"I think short term tone of mkt. is down we will see a correction up to atleast 4850. Can we go short with stop @ 5040 spot nifty?'
My Notes: I assume you are following some technical method that has given you a short signal. If this is so, go ahead and follow the signal. For traders who are / wish to go short, above 5040 is the correct stop since above this level, the Nifty begins to make new multi month highs again.