iCharts Discussions

[skyisblue]

Nifty spot closed the week at 6063.2. On 10th Feb 14, in case the Nifty spot trades around 6083.6 and closes above it, then it would be construed as being positive. However, on the the other hand, if it trades around 6052.25 and closes below it, then it is definitely exhibiting weakness.

Similarly for Banknifty spot, trading around and closing above 10358.85 would be positive and close below 10260.55 would be negative.

CNX IT spot is already weak. It can only show strength if it closes above 9702.6.

Nifty Futures, needs to trade and close above 6072.85/6103.15/6139.9 to show increasing degrees of strength. It would show weakness if it closes below 6072.85.

For Banknifty Futures, the levels are 10291.35/10388.35/10506. A close below 10291.35 would definitely be a sign of weakness.

These are my thoughts for 10th Feb 14.

[skyisblue]

Out of the five major stocks which carry a more than 90% weightage in the CNX IT, TCS spot is already weak. HCL, WIPRO and TECHM spots are showing early signs of weakness even though they are in positive territory at the moment.

For 10th Feb 14 , if INFY spot trades around and closes below 3567.15 if definitely becomes weak. For TECHM spot the figure is 1764.15, a close below which it becomes weak. At the moment both these stocks are in positive area.

[skyisblue]

I like what Sudarshan Sukhani has to say on....

How I trade for a living.

1. Develop systematic trading rules for short term trading (Day Trades & Swing Trades)

2. Implement these rules blindly during market hours. (No questions asked. If there is a signal, take it)

3. Review the performance of the rules every month.

4. Every day, work on new ideas, plans, meaning : the main task is research.

Performance:
All trades have stop losses
Percentage winners are 40. Means 60% of trades are losers.
Profits must be run to the maximum possible.

What is the Arithmetic ?
What follows is a theoritical example. Say, there are 100 trades in a month.
40 winners make average 15 points each (after costs). Total 600 points
60 losers lose average 8 points each (after costs) Total 480 points
Net gain: 120 points

Why trading is difficult for most people ?
Not willing to take losses. Most will not be able to take 60% losers.
Not willing to understand that Market movements are unpredictable. Here is an example. There are 60 losers. But the losers are likely to be distributed un-evenly. Maybe 10 losers came in a succession (one after the other), then six winners came, then one loser, then one winner.....Most traders will not be able to handle 10 losers one after the other.
Not willing to take profits. Most traders will jump to cash in a few points. They miss out on the really big moves that can make a year of trading.

Why I can do this ?
First, I have given my dues to the market. This means I have made many mistakes that traders make. (luckily, I always kept my positions small, so I was saved from any 'wipe out' ).
Next, I have confidence in my trading methods. Why ? I spend a lot of time doing tests over past data. If the method has made money over the last two years, it should make money in the future. If the method has given 12 losses in a succession in the past, it is likely to do so in the future. And so on....

What are the basic principles of trading ?

Have rules.
Cut your losses short.
Let your profits run
Follow your rules.

[Rebel]

dear frnd skyisblue,
good one.but my prsnl view is letting pofits run,blindly take signals, are all practically not easy for all,so we need to follow 90+ success rate strategies only...something like gann are good...

cheers!

[skyisblue]

Hello Rebel,

Here the author is not discussing any particular type of trading strategy, so even if you follow your "90+ success rate strategy, like Gann", you still would have to take the trade blindly when your system signals one. I agree with you that this whole process of short term trading is not easy. That's why we need to consider what the author is suggesting or any other wise men on the subject. Your point of view is well taken.

[skyisblue]

On 24th Jan 14 both Nifty and Banknifty spots displayed weakness when a 89/13 EMACO took place on the 30 mins. TF. On 10th Feb 14 the Nifty spot entered "greener pastures" when a 13/89 EMACO took place on the 30 mins. TF. The Banknifty spot is trying to play catch up today what the Nifty spot already did yesterday.

To display increasing degree of strength the Nifty spot and Nifty futures needs to close at or above :-
(a) Nifty spot : 6051.3/6075.6/6093
(b) Nifty futures : 6069.7/6094.25.

A similar view for the Banknifty spot and Banknifty futures are:
(a) Banknifty spot : 10249.8/10331.05
(a) Banknifty futures : 10276.1/10358.75.

CNX IT has shown remarkable recovery due to the performance of INFY spot which was very close to -ve territory. CNX IT spot needs to close above 9708.35/9722.13 to show strength. INFY spot is in +ve territory if it closes above 3581.75.

[skyisblue]

Nifty spot needs to close at or above 6052.4/6070.3/6108.85 to show increasing strength. Close below 6052.4 is very negative.

Nifty futures needs to close at or above 6068.8/6087.7/6110.6 for strength.
Close below 6068.8 is very negative.

Banknifty spot needs to close at or above 10244/10308.25 to show increasing strength. Close below 10244 is very negative.

Banknifty futures needs to close at or above 10266.9/10333 for strength.
Close below 10266.9 is very negative.

CNX IT spot needs to close at or above 9705.2/9753.2 to show increasing strength. Close below 9705.2 is very negative.

Today the Banknifty spot has done a 13/89 EMACO on the 30 mins TF which is very positive.