iCharts Discussions

[SwingTrader]

Trading Levels for 11.06.2009

[SwingTrader]

Very interesting day. If you had used the original strategy as it is without the filters then there were some good regular trades (pointed out on the chart as A, B, C & D).

If filters were used to first make sure you were trading in the direction of the trend then you would not taken any trades as by the time a trend signal came the price turn to opposite direction. This is fine as we are trying to use moving averages to identify trends, the EMAs were signalling that there was no good trend in place. The whole day was a sideways move. This is the downside of using trend filters.

Now for the discretionary part (IGNORE THIS DISCUSSION IF YOU ARE A NEW TRADER OR HAVE NOT OBSERVED MY LEVELS CLOSELY DURING MKT HOURS). I have talked about confluence of Level & EMA (especially the 34 EMA). Now this is something that the trader has to decide - how close to a level is confluence - the closer the better and more important the confluence. As I said earlier a breakout in either direction of the confluence is a potential trade signal. This is pointed out on the chart as points 1, 2 & 4. Please note: DO NOT USE these ideas until you are very comfortable with the price action that happens around my levels.

NOTE: IT IS EASY TO POINT OUT THE PROBABLE DISCRETIONARY TRADES AFTER THE MARKET CLOSES. THE REGULAR TRADES ARE FINE AS THEY ARE ACCORDING TO THE RULES. I HAVE POSTED THE DISCRETIONARY TRADES BECAUSE THEY REFLECT THE EXACT THOUGHT PROCESS I WENT THROUGH TODAY LOOKING AT THE MARKET ACTION LIVE. SO PLEASE TAKE THESE WITH A PINCH OF SALT.

Explanation of points marked on the chart:

1. Clear confluence, price breaking down, a discretionary short trade with the minimum expected price objective being the bear level. Entry would be at open of 10:05 bar. SL is just above the LOC.

A. A discretionary long trade & a regular long trade.

Discretionary long trade is possible because of the large difference between price and 34 EMA. SL would be just below bear level.

Two signals - one regular & one discretionary give more confidence about the trade at this point.

2. A discretionary short due to confluence of 34 EMA and LOC. Probable entry would be at the open of 12:10 bar right after the price breakdown. Initial SL would be just above LOC.

B. Regular short.

Two signals again so more confidence that this is a good trade.

C. Totally discretionary long trade. Price took support at S1 and price is far away from 34 EMA so some sort of bounce is expected. Entry is at one's discretion ONLY after price starts moving up (at least one strong UP candle). SL is just below S1.

4. Confluence of bear & 34 EMA. Price breakout in any direction from here is tradeable. In this case it was upward breakout - a continuation trade as one would already be long from the "C" trade. Entry would be at open of 14:10 bar after the strong UP bar at 14:05, if entered here the the SL would be just below bear level.

D. A regular short trade and also a discretionary short as price hits resistance at the day's "KEY LEVEL" and price is also significantly away from 34 EMA. Also, look at the price move from S1 to LOC, a correction was certainly possible. For discretionary trade the SL would be just above the LOC.

[srihari]

Dear ST sir,
Iam a new subscriber joined this month only. As part of finding good trading methods, I studied all your trading levels and the one explained on 11.06.09 is most appealing for me i.e., the method of regular trades & discretionary trades along with confluence of EMAS and levels.In the follow-up of 11.06.09 trade levels, you said you already talked about conflunce of EMAS and levels.Kindly intimate me where did you explain about this confluence of EMAS and levels. Eagerly waiting for your reply.
Regards,
srihari

[SwingTrader]

[ven657]

Hi,

Is there a way to identify which of the scripts have chance of moving up before the market hours?

How do we determine the same?

Regards,
Venkat
Mumbai
9920164672