Friday, September 9, 2011

Choppy days likely

The Nifty has rallied strongly, almost 450 points from its 4700 low. Now, the Index faces strong resistance as it tries to cross the 5200 gap. It is possible that the market may struggle to cross this threshold for some days. The short term trend is up so dips should find support. This means that rallies will face resistance at the 5200 threshold, while dips should find support because the short term is up. This leads to a choppy market scenario.

Answers:

Rocky asks:  "want to clarify sthing like in real time technical analysis the chart showing 5 min, 15 min and so-on suppose if we took a position @ 9;25 and position going against our favour so we have to wait till 9;30 in span of 4 min the prices can be moved an where so how to tackle this situation. "

My Notes: There is a trading time frame. This is the time frame used for taking entry and exit decisions. You can have other time frames on your chart as part of your strategy, but there will be one, clearly understood trading period. If this period is 15 minutes, then you are expected to wait for the 15 minute period to be over before taking any trading decisions.
Suppose you are trading on 15 minutes. You have a rule that you will sell below the low of the current bar if XYZ happens. At 9.25 you notice there is a strong chance of XYZ happening and prices are falling. So, they could be lower by 9.30 when your 15 minute ends. But, no one knows what the next 5 minutes will bring. Maybe a sharp rally will cancel the XYZ pattern by 9.30 or even create a long legged DOJI which will not be violated on the downside, or something else..

Therefore, the trader who is working on a specific time frame should wait for the timeframe to be completed before taking action. If you have a stoploss or target, then that value can be triggered anytime. But, if you have a rule based on the bars in the time frame, then you have to wait for the bars to be completed.


9 comments:

GA said...

Dear SS,
are you on vacation? why not seen on ETnow?

Gopal

amarjeet said...

respected sir,
where i see u now because u don t come on et now.without see u day is boring.not for picks.because u live in my heart.and my screensaver.

rocky said...

respected sir,

thanks for reply
I was reading your blog and you mentioned that you booked at Range Expansion. this move may be more higher so that one can hold to enjoy the trend.How can one identify the Range Expansion can you ellaborate.. if possible give example also

Sasi Uppuluri said...

Sir, the scrip you do not like "ITC" is now available for shorting :)

daytrader said...

Dear Sir

U left Et now ,

thanks and regards
ur follower

unnamed said...

Have you stopped ETNOW appearance ?

Balu said...

Sir

No business channel is worth watching without your presence.. It's not because others don't know trading but its all about learning and you are the most useful for viewers...So come back on some channel soon sir.

Balu

Balu said...

Sir

By the way today i think market has entered fresh downtrend for a target of 4950 and then from there if it raises back to 5200, then it may form inverse head and shoulder pattern.. but needs to be seen how it acts at 4950 or some other support..

Please post your view sir..

Thanks and Regards
Balu

srinivasa said...

Hello Sir ,

I watch ET NOW every day morning on trading calls. I like your analysis about short term and long term views . Why are you not seen in ET now for past 4-5 days

Srinivasa