The Nity is in a slow market environment. 10 day Historical Volatility has fallen from a high of 30.04 to the curent level at 13.70 on March 11. This is a slow market.
Many traders make money in high volatility markets and then stop making money in low volatility environments.
Setups which rely on volatility expansion no longer work in low volatility markets.
Traders who trade on price movement may find it difficult to catch a meanigful trend since price setups are not available in slow markets. For example, a hed and shoulder pattern or an ascending triangle which may be difficult to identify in slow markets simply becasue these patterns are not being formed then.
Fast movng markets are trending or momentum markets. This requires buying strength and selling weakness. Traders can identify a trend, then ride it. Slow moving markets may become mean reverting markets, meaning buying weakness and selling strength. The transition is not easy to do.
If you do find a pattern, identify a nearby profit target, then maintain the discipline to exit when the target is hit. Move stops to breakeven quickly to avoid a sudden mean reversion.
Trade less, or do not overtrade. Understand that slow markets offer few opportunities. The problem lies with the market, not with your trading.
Stand aside when markets are not giving you good trades.
Trade like a cheetah. The cheetah waits patiently stalking his prey for hours, sometimes days. When the opportunity is right, he suddenly jumps to catch the victim.
Continuing our plan to hold monthly meetings, the next meeting of the ATA (Association of Technical Analysts) will be held on March 27, Saturday in Delhi. Attendance is free for members. Outstation members have the opportunity of viewing the presentation sldies, and, supporting maerials. The proceedings are being video recorded. Snippets will be posted on web site for all members, while the full dvd can probably be acquired for shipping and handling costs (for members). If you are not yet a member, do so. Visit www.taindia.org