Hey guys, I can't apologize enough. Honestly, I am trying my best to get back to writing again but somehow it is just not happening. Many of you already know that the trek on last day of our training was very hectic for me and I could not feel many of my body parts for last two days and many of the body parts I felt for the first time in my life in last two days.
Anyways, I will not get in to reasons now and will simply do what I enjoy most... writing here. Before I go ahead I hope you have read couple of posts I made on Futures Blog. Do let me know your comments.
Well, this is one post which I am longing to write for some time now. It is regarding how to find the trend in the market. Obviously I am not talking long term or mid term trend here and I am referring only to the intra-day trend here. It is this trend which will help us make our trades. Now, whatever I am writing here, is not something technical or it is not something which is created by me. In my early days as a trader, I read someone advising similar strategy which I have tested and customized a little such that it works for me 75% of time. If I ride my gains and cut my losses by keeping stop loss and respecting them, believe me 75% is a good number.
Well, since now NIFTY is in pre-open between 9:00 to 9:15 and is off the bounds for poor souls like I and you... I take a first look at the market at 9:20. This is the opening price of NIFTY for me after initial noise has subsided.
At around 10:20 to 10:30, I look at the NIFTY again and see if the level is at least 20-25 points above or below the opening price. This is first trend check and based on the confirmation in the positive side or negative side I make the first trade of the day. Not to mention again but I keep a stop loss for every trade.
At around 12:45 to 13:00, I take stock of the NIFTY once again. If there is difference of 20-25 points with respect to level at 10:20 or 10:30 then the market is still trending (it could be in opposite direction). I make some adjustment to the trade at this level by opening additional position or partially closing some.
One final check I do at 15:00 to 15:15 to see how the trades are faring and either close my positions fully or if I decide to carry them in to next day then I convert them in strangle or straddle depending on what the market is saying. Remember, I will advise never to carry an unilateral position overnight unless your risk appetite is high. Also make sure that your broker does not automatically convert your intra-day position in to delivery positions at 15:00 or otherwise you need to change the timings a bit to suit yourself.
These timings and difference of 20-25 points, though I try to stick to them, are not sacrosanct and you can choose to modify them for your convenience. Also when you do not see any trend and market is just moving sideways, your trades can be different or sometimes the best trade is no trade after all (Some of these important things I intend to write on Equity Blog).
Also, it is important to identify the mid term and long term trend of the market even while trading for the day. For this, you need technical analysis and charting knowledge as well as some interpretation tips. I intend to write about it on Equity Blog very soon. You won't believe it but I have been writing posts on all the three blogs in my mind and have already couple of posts ready for each blog. Unfortunately not being able to convert them to actual posts. Pray for me that I am better at doing that here onwards and also let me know how did you like the straw-berries.
Dear Friend,
ReplyDeleteI have read your posts right from start till here in last few days. Kudos now i understand options.. Posts are simply awesome.. such a lucid and beautiful explanation on derivatives. I would be very much grateful to you for this.... If i had known ur identity i would surely met you and given you a big treat... as always great people always remain unknown to larger world but would love to know you..