Monday, May 28, 2012

The Nifty gets a breakout

After remaining in a narrow range for 11 trading days, the Nifty finally broke out from the 4950 resistance. The pattern targets for this up move are 5100 approximately. Only the markets can determine if the Index will reach these targets, but, as traders, our job is to follow our setups. My trade was to go long on a breakout. I anticipated this breakout by actually going long in the Nifty on Friday itself. The position was disclosed on CNBC-TV18 at 2.30 PM on Friday, when Udayan asked me about my Nifty views and positions, if any. It was repeated today morning at 8.20 AM.

Readers can ask this question: Is it wise to anticipate a breakout and take an advance position?

The answer is: No. Never anticipate a breakout / breakdown. Let the market first tell us where it wants to go.

In all fairness, the second question should be: why did I take the trade? Well, I have been trading for many years, I have the discipline to correct myself if I go wrong. And, the rounding lows pattern being made in the Nifty after a decline of 800 points did suggest that the Index would move above 4950 resistance.

4 comments:

market analyst said...

Very useful. Can I have your contact details please. Need to contact you to discuss some trading strategies I have been working on for long time. I think they are useful but I want them to be validated by you please.

Jitender Yadav said...

Respected Sir,
"as traders, our job is to follow our setups."
"Never anticipate a breakout / breakdown. Let the market first tell us where it wants to go."
As the Chinese proverb goes " You give fish to a man and you feed him for a day, you teach him to fish and you feed him for a lifetime.
These are the qualities that make you the best. You not only give opinions and levels on stocks/indices but also teach your followers how to trade properly.
Your Fan
Jitender Yadav
New Delhi

Rushabh Shastri said...

behavioural pattern says...people needs to have small blow on a downside for a big rally for a market...its buy on dips still but market is finding too much crowd on buy side at 5000 nifty level....

Rajveer said...

Nifty if going up without me. Sad and tragic. A Drawdown of 20 % in my portfolio has triggered my Stop Trading Rule. 12.5% down in April and 6 % in May. It was a disastor with stocks. All my calls were good in nifty in May except last week, i took bets with closer SL and all failed.

I am depressed and feeling inefficient. Sir, since drawdown is a practical problem. Please advice as to how many years it can take to become a successful trader? I know there is no guarantee since the success rate vary from person to person. I know successful traders like you have years of experience. My Question is: How do successful traders breakeven in their intial years.

Please suggest further reading for the rest of the year since i shall be doing Paper trading for the rest of the year. My purpose of life is Life of a successful traders. I feel like a dead weight without trading. Please suggest some advice.