Tuesday, September 27, 2011

Something Better

With strong rallies in the American markets, we can assume that the Nifty will have a gap open. A big gap has two possibilities: the gap will be filled, or, strong momentum will take the move forward. The 15 minute rule can be used to control your trades. If the gap is going to be filled, then price has to go lower, meaning that it will break the 15 minute low. Therefore, this low then becomes a stoploss, a selling level as well as a support level. Given today's SGX Nifty price, it may be wise to (a) look for a dip to the 15 minute lows for a buying on dips opportunity / (b) buy above the 15 minute high with a stop below the low.

6 comments:

Pranali Khanolkar said...

Sir,

I have a short position in Nifty@4970(Oct Series).I took it yesterday afternoon looking at the Advance decline ratio.Which was very bearish(1:6),but the market went up.As the short-term trend is still bearish,I did not square-off. Please guide me as to what to do now.

rocky said...

respected sir,it may frustating for you as i am posting again n again. i have few query and waiting for your response

•How to develop a view on markets each day before we actually start trading

how to identify choppy trend ?

In 2 period RSI what should be upper limit and lower limit we should adjust??and the limit setting in ADX ??

in case possible please upload the presentation in newsletter strategy regarding view on markets each day before we actually start trading

Anshul The Maniac Finance Kid said...

Sudarshan ji ,I have seen and also traded the 15 min rule as explained by you many times right from 2009 I remember.
Now the thing is the rule works on "GAP DAYS."Now please Sir,explain what do u consider a gap as at one level of thought opening price is always different from previous day closing.So by this definition every day is gapday.
Now common sense leaves us two alternatives to define a gap:
1)Gap is formed when opening price exceeds high of previous day.
2)Gap is formed if opening price is X percent higher/lower then closing price.
Now what is this X is the big question.
Please Sir,Elaborate.In absence of any good answer,presently I trade the 15 min only if open is higher then high of previous day.

Sasi Uppuluri said...

Hi Sir, as said, I have been trading this 15 min rule for quite some time. However, with high volatility and gap openings, it has become psychologically difficult to trade this method. Problem is : For ex: If ATR of Nifty is 100 and Nifty opens with a gap of 80 points and further moves 20points in 1st 15 mins(total of 100 pts up)and breaks above the high of 15 mins. Psychologically it difficult to go long at this point for Intraday trader. So, can you share some thoughts as to how to handle this situation? Thank you

Rakesh Shethia said...

I have just begun to read your blog. I am reading the archives as well. In one of your previous posts, I came across the term ORB trade. What is an ORB trade?

Rakesh Shethia said...

oh, ok. I got what ORB means in your archives. Will post my next questions, if any, after reading thru all the archives.