Thursday, 5 June 2014

05062014


Nifty opened at PDC and initial range formed. Was looking to trade at the yesterday's tight range, BO or BOF. Got the BO of PDL.
1) BO of PDL BRN.  Entered below BRN.  Booked when failed to go further down.  Profit of 8 points.
2) BPB of PDL BRN.  Went long above IRL.  Booked when it got resisted at HOD.  Profit of 16 points.
3) BO of PDH.  Usually I do not take immediately another trade once I book out.  It is always good for the trader to wait out for some time once trade is booked out. But here as there was a BOF of PDL, it gave me confidence to enter in the trade above PDH.  We all know that failure of break out of one range extreme leads to successful break out of another range extreme.  I had this in my mind.  Got rewarded handsomely.  Booked at profit of 42 points.
Missed the last up move.

3 comments:

  1. Sir,

    1) Space with PDC was less for the BPB of PDL BRN trade. You must have had solid reason to believe that this move will be strong enough to break PDC. One of the reasons may be the huge accumulation of orders just above PDL, due to prolonged consolidation. Was there any other reason to believe that PDC will be broken?

    2) I have been observing for some time that whenever PDC is located near to PDH/PDL, PDC loses its relevance. As soon as PDH/PDL gets broken, PDC also gets breached. I would like to know your views on this.

    3) Before going for a direct BO, what are the factors, you look at.?

    Thanks,
    S.Karthikeyan

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    Replies
    1. SK

      For 1). There were two levels above the IRL, DO and PDC. For first 20 minutes it traded above DO and PDC, then it broke without any resistance creating a fluid. So when i took the trade it already traded above and below DO/PDC and lost its relevance. Secondly, it was a BOF of PDL, a significant change in bias.

      For 2). Whenever two or more DPs are close together, it is better to wait for the BO or BOF to happen of those DPs.

      For 3). Are you aware of cigarette pattern? What we do there is we take the direct BO of the long narrow range. I did the same here. I took yesterday's range (range between PDH and PDL) as long narrow range as a cigarette and traded the direct BO.

      We need to trade what is obvious on the chart. That range was very obvious and I did not ignore it.

      UR Dave

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    2. Sir,
      Thanks for the guidance.
      S.Karthikeyan

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