EDIT: Just wanted to make things clear..I am totally flat now..Not trading for a little while..Generally after some losers, its better to regroup and come back..So thats what I will do..Frankly I am surprised all the bullishness..But generally market defies logic...So maybe a new bull is starting..Who knows...More thoughts later...trade safe out there...And dont trust anything..bye.
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EDIT: Dont know..Dont know..I am capitulating fully and going flat..Will decide on future positions later...Now just going to chill a bit...Better to let things sink in and not trade emotionally...Things look very bullish for now...Atleast for today.
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Okay guys...The US market futures has done bears in...I am capitulating a bit over here...Covering all option position shorts in loss...Also rolling the future shorts to April...Also hedging ALL of them with 2900 calls. Dont know how this turns out...But I cannot see any reason to be bullish now..Maybe I am wrong and will be bankrupt soon...Feel FREE to fade me.. :)
Below is what I wrote few hours back...I still feel the same...But US futs gapping up has obviously thrown a spanner in all bears works...Let us see how this works out..
Tough trading..
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Past several hours, I've been reviewing market data and charts..I've also been reading several blogs and forums...And overall, what I read is scaring me and making me question my earlier views in past few posts where I was toning down on my bearishness...
I see that everywhere, the bulls have started hoping against hope again...And on
what basis? That things cannot be TOO bad...HOW did they reach such a conclusion?
Price has done absolutely NOTHING on a medium term basis...So WHY bullish? I am pretty surprised...At best I expected some neutral sentiment..Price has not moved anywhere over past 3-4 months..So because of this one would expect more neutral sentiment...The bulls are back though...Last week pushed sentiment to the more bullish side...Maybe they will be right and we will push higher up...I continue to be skeptical But lets play point to point...
Best.
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19 comments:
maybe the fractal will play out in some other way...have to rework on charts if this rally does have more leg...
Did the stupid thing of taking 100 short position of Reliance Capital at 343. Totally surprised by 15% rally of this stock. I thought 10% is already too much!
Any suggestion on what to do tomorrow? Should I just get out with whatever loss is there in morning or hold on it?
Lee, this is a mad mad bull jump.. without any logic or strong base support.
Trust me, I did not trade even on intra-day basis on the long side. bcas i was afraid, when the market will reverse quickly. On bank nifty i shorted at 3880 with stop loss of 3900-- stop loss hit. I've to still fine tune my trading system,as there are some ifs & buts to be answered. But one thing - I was expecting this mad bull jump, after seeing my weekly nifty chart. (see it in vfm - a learner's understanding about the market 2).
During last six months i have been trading strictly on intra-day basis only.. whenever i keep a small open position (with or without hedge) - i book loss next day.
The main worry to me is, if such a senior people like you are unable to catch up with the trend on the correct side, what will happen to budding traders like me??
I wish you will come soon to the trading desk, with your analysis and charts.
Regards
Well, I do not why you considered me as an experienced trader. I am a completely newbie.
Last year, I tried to trade for the first time and this was a complete disaster. All my TA went wrong during last year crash. This month, I started trading again without TA. This time I was doing only Option trading by following mantra of the great option trader Nassim Nicholas Taleb's mantra. In short he is suggesting forget all TA's, just keep on betting small money for improbable. Sooner or later you will reap big profit. This month, I followed it with basic investment of around 25K. After todays bull run my total profit was close to 70 K. The improbable this month was rally of 2900, 2850 and so on. I betted on this and it worked in a great way.
Now, today instead of getting out with the profit, I tried to do TA. My analysis was 10% rally without any reason in a day is already too much for reliance
capital. So, I shorted two lots (around 1000) at price of 343. It turned out TA was wrong again and I have already lost 22 K on this position. Now, I have no confidence on my TA.
My question is should I just exit tomorrow morning
with a profit of 70-22-X. Hopefully this X will not be too much :-) Although the way US market has started today, may be X will close to 10 K.
By the way, what you guys feel about Talib's mantra? This month it worked like a wonder for me.
Is it better than TA for volatile market?
Quote>It turned out TA was wrong again and I have already lost 22 K on this position. Now, I have no confidence on my TA.
What was your strategy? TA is not a magic wand that you wave and whatever you do gives profit. I always emphasize on trading with the Trend. Large Trends such as this one (on hourly charts, chart is so trending that its tough to miss) are a trend followers dream come true. Reason you lost was you tried to trade against the trend hoping that the trend will not continue and reverse the course of action. Why not wait for it to reverse before shorting? Just like its high risk to buy falling stocks, the same risk is there when one shorts early.
The following is a quote from Pristine in their latest newsletter,
This past week we approached a "Wall of China" which we use to describe an area of consolidation. This is where a large group of people have put their expectations that the market would rally and move up from. When this doesn't happen and the market takes a dramatic move to the downside, it crushes hopes, dreams and expectations. Those that don't take stops end up with what we all know too well as the "Deer in the headlights syndrome". Many go into denial with hope and prayer becoming their preferred new or once again so called style of trading. And then once the market approaches that "Wall of China" (new resistance formed by the consolidation that took place before the precipitous drop), people sell. Some will get on their knees thanking everyone that they got some or most of their money back and of course saying, they will never trade or invest again.
Believe me, Trading with the trend seems very easy, but is the toughest to do. But then, who said Trading (and making money) was easy.
IT is not only ppl from bearish camp suffered.
I had SAIL CALLS Strike Price 95 bought at 0.60, 0.25, 0.15
I applied stop loss at 0.40 average price and today
Call price was 2.70 Rs.
Lol .... SAIL Lot Size is 5400 !!
**** Basically as lee said lot of manipulations can be seen in market
Check All calls of ABAN for march
and trading prices for 23/03.2009.
also watch TATAPOWER calls/puts in market hours, monitor 2000 Qty of buy/sell orders through out day and see what happens to it at the end of the day.
these are just couple of examples one can find some more.
Well Prashant,
I agree that I shorted too early. However, I do not know which kind of analysis can predict a jump of 15% without any reason. Broad market had reason to jump by 3-5% because of news from USA. Even in such a situation, one would think 10% rally (without specific reason) to be overbought. Any overbought share has to go down.
However, market proved me wrong! Most probably there were too many shorts for which spot loss hit was there and I missed it.
Dear Return_of_Chanakya ,
100 Short Positions and that for RelCap ? Ohh ... Friday Stochastic was about to give sell signal but it did not !!!
U should have confirmed clear sell signal before shorting
I guess on 24th it will move up in morning but lot of chances of profit booking so if u have credit to hold then take chance. It will come down till expiry. I can not say about proft but there is chance of less loss
It has also crossed upper BB. CCI also climbed in almost 90°
To the best of my knowledge such climbed CCI can not sustain more than 2-3 days. So u need to take chance.
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here is RELCAP for 24/03/009
RESISTENCE POINT 2 : --------404.77
RESISTENCE POINT 1 : -------384.13
PIVOT ->>>>>> (351.07) <<<<<<-
SUPPORT POINT 1 : -----------330.43
SUPPORT POINT 2 : -----------276.73
Good Luck
Quote> However, I do not know which kind of analysis can predict a jump of 15% without any reason.
Well, no Analysis can PREDICT. About Reason, well, why worry about it, leave it to the Fundamentalists to figure it out.
TA is never about Predicting. Its about understanding the charts to try and decipher what they are tying to tell. We do this by using Patterns (I had some posts back in this blog written about a Channel formation that was about to be broken on Nifty), Indicators, Oscillators, etc.
Most have one or other drawback, so, one has to combine multiple things to get a idea about which may succeed. One of the simplest strategies is to Buy and sell based on MA Crossovers. Of course, there are many negatives here too, but end of the day you will be having a system which you can test as to how good or bad it was before.
Oscillators are most effective in indecisive markets. In a trending market, oscillators can be ineffective technical analysis indicators. For example, in a strong bear market, a market can remain oversold for weeks. The reverse is true in a bear market.
I am working on a CCI based trading system.
and watching for it for last 2 months. But few mere ppl need to contribute on various scrips as i need to find if there any weakness in this system I have also invited Lee for same.
If any TA ppl are interested
Write to me on abhimanyu.altekar@gmail.com
- Regards
Good you're taking a break, Lee. When TA fails, it's for more fundamental reasons. The last time this happened, I lost faith in EW and it's still shaken. I guess TA can't be perfect either.
Return of Chanakya, I agree with you. This one was hard to see - we all expected a mild bounce, it turned out to be a huge leap. It didn't look too early back then.:)
Dear Return_of_Chanakya
I guess u need to hold REL CAP
24/03/209 Day high 381 and came down at 357
Thanks Abhimanyu! However, I chickened out ! got out with loss of 3000 Rs and then market tanked :-(
I compensated that loss in 3 option of 2950 put.
Guys any view on Talib's mantra on option trading?
So far this is the only rule which seems to be working in trading this month.
Chankya ,
Boossss I told u to wait ...
in fact u were about join the profit camp today ...
For options
TA is the only mantra.
But as Lee said I am planning to trade in Nifty Futures
In TA not only S1 - P - R1
but timing is also important
In a Range bound market better to watch and wait. infact let cross over take place in stochastic, macd, MACross over Etc.
At least these 3 indicators must give same signal within same day or couple of days.
Option Calculator is good tool
Various strategies as per market mood are important
http://www.trader-soft.com/option-trading/option-strategies.html
I had given 4/5 calls to my frends
Today Short Aban at 340-342
Eq Target 330
TPC Put of 700 above or at 718-720
EQ Target 680 from 720
y'day Nifty 3000 CE at 10 to 15 RS
today sell Target 35 to 40
Today morning Nifty PE 2900 at 10-12 Rs today's Target 25-30 RS
Today Nifty Fut Short
below 2990-2995 and cover at 2965-2960
All targeted properly.
This is all done with TA.
This is all done with TA.
This is all done with TA.
I guess NSE can KISS 3200 if it stays above 2860 for next 4 trading sessions. Correction upto 2860 is good for 3200 target.
Dear Lee,
I am feeling very sad to see the psychological defeat of a soldier.
Actually the problem was your mindset.It was not prepared to see nifty trading above 2840.. so a denial mode crept in. (It cant be .. its impossible.)
But we have discussed market tends to take out the last of the psychological strength from a player.Money will come .. money will go. It is not a matter in stock market.Please dont loose your psychological strength.That is the key... (not whiskey)..lolz.
So buck up.. soldier.. come back to the battlefield.Next time keep your mindset open for any possiblity...
Please dont treat me as a preacher.. just a friendly suggestion coming out of my long association with the market.
TC
Hey Sajal...And others..No defeat and all...I will come back..And will come back stronger...
Just regrouping..rethinking..evaluating what went wrong and so on..
My last short trade - From 2600 odd till 2800 I shorted...My AVG price was around 2720...I had several signals to cut and run which I ignored...This was my mistake. Adding a lot to a losing position was the second...
However breakout above 2840 was my last point as I must have mentioned several times in previous posts..Market gapped up above and never looked back...
To be totally clear...From 2720 to 2860 around 140 pts loss...If you take all the earlier gains, this is not so BAD....BUT thats a traders folly..For me this was the biggest loser trade so far..So I needed to step back and see what went wrong..For me it was more of mindset that anything else...I need to clear that and come back fresh..
I will do so soon.
Best and Thanks to everyone for their comments..I know a lot of bears lost money...You can see how much I lost above...
Dont worry too much..Its all part and parcel of the game.
I WILL BE BACK :)
Best.
yes bears were mauled indeed this series....n now sentiment is everywhere of 3400 nifty ..amazing what a week can do...waiting for ur analysis on fractals...maybe there is still hope of testing those lows :)but after election prob
shaq
3400 on NSE in April
Muze Shaq hai ....
3150-3200 Will be enough at this stage
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