Yet another month of frustration. I was right in my analysis on numerous occasions. But, couldn't get a decent entry in most of the trades that I took up in July.
This has been the pattern in most of the trades that I took up.
Day 1 :
I take an amateur entry into the trade in the earlier part of the day itself. I see the stock fast moving up or down in the direction that I want to trade in, and take up an entry hoping that I don't miss an opportunity. The stock chops around in a range for the whole day. At the end of day, I have a very small profit, or almost at my entry price.
Day 2 :
The markets and the stock seem to go in the opposite direction of what I expect it to. It takes out my predetermined SLO. I exit the trade with a small but significant loss.
After Day 3 or day 4 :
The stock eventually goes in the direction that I thought it will. And it does so Bigtime!
This pattern was so frustrating, because it happened in quite a lot of trades in succession. And the cumulative loss wiped out nearly all my profits that I had made in trading so far.
The markets were choppy, directionless when seen on the daily charts. But as I mentioned in my last month's post, the weekly charts gave a good sense of the direction too. But the big trouble with this, that I didn't (and even now don't) have the knowledge to take a risk free entry.
As seen in the weekly charts, most of the charts displayed triangle(descending or symmetric) patterns.
As a result, I took a relatively conservative entry, but got caught in whipsaws, before the stock actually moved in the direction that I thought it would.
Maybe the only risk free entry would be to take an aggressive entry, i.e. buy at the bottom and sell at the top.
At the end of July, and beginning of August, a lot of global fears have created havoc in the global markets. The US debt rating got downgraded. This seems to have given a better sense of direction to our markets.
The good news is that now the markets seem to have a definite trend. And the bad news is that the direction seems to be down. Way down from where we are right now.
I don't want to give trading suggestions, as I am myself pretty bad at it. But I'd definetely recommend people with decently big portfolios to hedge their portfolio. You might want to buy Nifty PUT options (mid month or far month contracts) for the entire value of your portfolio, especially if you have good exposure to index stocks. I have a bad feeling that this might be 2008 revisited.
This chart of Nifty in both weekly and daily charts gives me good reason not be very optmistic about the markets going up in the near future. I hope I'm right in believing that this is a Descending triangle pattern.
I also was able to see a Symmetric Triangle pattern in ICICIBank charts. I hope I'm right in my analysis of this one too.
These are just 2 examples. Most of the notable stocks that I follow are showing such chart patterns. Some of them have also broken strongly like ICICI Bank has.
Various websites give possible ways to determine possible price targets for such patterns. Only time will tell if these targets will be reached. But they do reach, then we can expect the bulls to be brutalized by the bears. Thats a lot of blood on the street.
Hope peace prevails! Happy trading !
This has been the pattern in most of the trades that I took up.
Day 1 :
I take an amateur entry into the trade in the earlier part of the day itself. I see the stock fast moving up or down in the direction that I want to trade in, and take up an entry hoping that I don't miss an opportunity. The stock chops around in a range for the whole day. At the end of day, I have a very small profit, or almost at my entry price.
Day 2 :
The markets and the stock seem to go in the opposite direction of what I expect it to. It takes out my predetermined SLO. I exit the trade with a small but significant loss.
After Day 3 or day 4 :
The stock eventually goes in the direction that I thought it will. And it does so Bigtime!
This pattern was so frustrating, because it happened in quite a lot of trades in succession. And the cumulative loss wiped out nearly all my profits that I had made in trading so far.
The markets were choppy, directionless when seen on the daily charts. But as I mentioned in my last month's post, the weekly charts gave a good sense of the direction too. But the big trouble with this, that I didn't (and even now don't) have the knowledge to take a risk free entry.
As seen in the weekly charts, most of the charts displayed triangle(descending or symmetric) patterns.
As a result, I took a relatively conservative entry, but got caught in whipsaws, before the stock actually moved in the direction that I thought it would.
Maybe the only risk free entry would be to take an aggressive entry, i.e. buy at the bottom and sell at the top.
At the end of July, and beginning of August, a lot of global fears have created havoc in the global markets. The US debt rating got downgraded. This seems to have given a better sense of direction to our markets.
The good news is that now the markets seem to have a definite trend. And the bad news is that the direction seems to be down. Way down from where we are right now.
I don't want to give trading suggestions, as I am myself pretty bad at it. But I'd definetely recommend people with decently big portfolios to hedge their portfolio. You might want to buy Nifty PUT options (mid month or far month contracts) for the entire value of your portfolio, especially if you have good exposure to index stocks. I have a bad feeling that this might be 2008 revisited.
This chart of Nifty in both weekly and daily charts gives me good reason not be very optmistic about the markets going up in the near future. I hope I'm right in believing that this is a Descending triangle pattern.
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| NSE NIfty - weekly chart |
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| NSE Nifty - daily chart |
 |
| ICICI Bank - weekly chart |
 |
| ICICI Bank - daily chart |
These are just 2 examples. Most of the notable stocks that I follow are showing such chart patterns. Some of them have also broken strongly like ICICI Bank has.
Various websites give possible ways to determine possible price targets for such patterns. Only time will tell if these targets will be reached. But they do reach, then we can expect the bulls to be brutalized by the bears. Thats a lot of blood on the street.
Hope peace prevails! Happy trading !
