Thursday, June 24, 2010

Challenges for the swing trader

The short term trend has been up since a while. I will show you the Nifty futures chart which I use. This is a 15 minute chart. Note the dash-dot line which is a control moving average that tells me the short term trend. This average turned up on June 11, around 1400 hours. Futures were 5030 approx. The uptrend was strong, with the average continuing to move up, till, yesterday, june 23, when the control average turned down.

Now, here is the challenge: The Nifty maintains its strength while the primary signal that I use has given a down trend signal. It is possible that this may be a whipsaw, which means the average could turn up again, giving a loss on a short position. It is also possible that markets may move sideways and the average can become flat, like a straight line. But, the current reality is that it is falling. The challenge is to follow your signals as they are visible now.

The software used is Trend Analyzer which I feel is ideal for the short term trader. More information is available  at the software website here

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1 comment:

Bhupesh said...

Sadly these are hard facts. Indian sugar millers are not able to sell even 25% of their June free sale quota, as the bulk consumers who consumes 60% of sugar are importing because of restrictions on stock holding and 0% import duty. The unsold stock at the end of the month will have to be converted as charity (levy) sugar. You cannot find such oppressive measures anywhere in the world and even in any other industry. ISMA has not even issued any public notice. In March Quarter ending when the sugar prices were at record high most of the sugar companies have reported loss or less profit. Hefty pay out to corrupt politicians account for this loss.