CLOSED TRADE NO.4, INITIATED TRADE NO.5

ON 26/5 AT 1:00PM CLOSED TRADE NO. 5 (BUY @ 5395.3 WITH PROFIT OF 32.9 POINTS.

AT THE SAME TIME WE INITIATED FRESH BUY POSITION , REMEMBER THIS TRADE IS AGAINST TREND WHICH IS DOWN ON DAILY & WEEKLY TIME FRAME. WE TAKE TRADES AGAINST TREND VERY RARELY WHENEVER OUR SYSTEM TELLS SO, THIS IS ACCORDING TO OUR IMPROVED STRATEGY WHICH WE TRIED TO IMPROVE TO AVOID HUGE LOSSES THAT HAPPENED IN TRADE NO. 1.

IN LAST 10-15 DAYS LOT OF TRADING PATTERN HAPPENED IN NIFTY WHICH ARE UNABLE TO UPDATE DUE TO TIME PROBLEM, WILL MOST PROBABLY TRY TO EXPLAIN ON COMING SUNDAY.

TRADE NO.4

ON 23/5/2011 AT 10:00AM SELL @ 5428.3

TRADE NO.3

ON 12/5 2011 AT 3:00 PM SELL @ 5486.3
ON 20/5/2011 AT 10:00AM BUY @ 5487 .9

LOSS OF 1.6 POINTS

NIFTY IN TRIANGLE

ON DAILY AND WEEKLY TIME FRAME IT LOOKS LIKE NIFTY IS TRADING WITHIN THE TRIANGLE

DAILY CHART

WEEKLY CHART

It is trading near the apex of triangle, so likely there is breakout/ breakdown within few days, until then it looks like it will trade within range, which for coming week will be 5470/75 -- 5850/60. The clear trend of nifty will b possible only after it breaks range of triangle. REMEMBER POSSIBILITY OF FALSE BREAKDOWN/ BREAKOUT.

If breaks lower trend line possibility of nifty going to 5200 and then to 4800-4900, if breaks upper trend line possibility of new life time high increases.

SECOND TRADE CLOSED

Yesterday at 12 noon our system indicated to exit sell position at 5521.5, SO EXITED WITH  profit of 12.8 points.

PROBABLE REASON FOR LOSS IN FIRST RADE

RECEIVED FOLLOWING EMAIL FROM FRIEND YESTERDAY

On 26th April 2011 there was a managed transaction in Nifty futures @ 5393, which is 400 points below MiniNifty low @ 5793. From that day onwards Nifty was closing in red for the last 9 days and now Nifty is approaching "that freak figure". Open Interest of Puts at strike price 5400 is the highest (5,401,300)today. Both these facts indicate that there was a big attempt to take down the Nifty to the desired levels of some of the BIG operators, which is against the interest of common people and small traders. For the safety of the interests of retail investor SEBI MUST investigate the said issue points and take appropriate remedial measures.
************ So Pl Send EMAIL TO SEBI in thismatter *********.

1)How above mentioned transaction took place when there was lakhs of entries?
2)Whether there is any inbuilt in mechanism to prevent such erroneous transactions?
3)Who are the parties to that transaction ? Who(buyer or seller) entered that figure and who benefited. Volume of that transaction? Any action taken by NSE/SEBI.
4)What are the checks to be incorporated in trading software to prevent such transactions in future.

NOTE:- DON'T KNOW IS THIS REALLY HAPPENED SINCE WE ARE USING ICHARTS FOR OUR CHART ANALYSIS AND THESE CHART ARE SHOWING 5793 AS LOW ON 26 APRIL FOR NIFTY FUTURE . MAY BE BECAUSE OF THIS MANIPULATION THERE IS DEEP LOSS IN OUR FIRST TRADE BUT THIS HELPED US TO ANALYZE OUR SYSTEM ONCE AGAIN AND WE FOUND SOLUTION TO AVOID SUCH LOSSES WHICH IS POSITIVE THING FOR US, AND WHICH WILL HELP US IN FUTURE IN OUR TRADES.

WE CHECKED NSE  SITE WHICH SHOWED FOLLOWING DETAILS --
see the link for nifty future on 26-4-2011 http://www.nseindia.com/content/fo/contractvol/datafiles/FUTIDX_NIFTY_26-04-2011_TO_26-04-2011.csv
 after checking nse site we realised that information provided in above mail is correct.

SO THIS MAY BE REASON WHY OUR SYSTEM FAILED TO RECOGNISE TREND CHANGE EARLY BCAUSE IN CHARTS WHICH WE ARE USING SHOWING LOW OF 5973, IF THE LOW HAD BEEN 5393,  INFERENCE HAD BEEN DIFFERENT. BUT SINCE WE ANALYZED AND BACK TESTED OUR SYSTEM ONCE AGAIN AND FOUND THAT WE CAN MINIMIZE SUCH LOSING TRADE IF WE USE ADDITIONAL INDICATORS FOR FILTERING, THIS IS POSITIVE OUTCOME FOR US. SO IF WE HAVE USED THIS FILTERS WE HAD EXITED OUR FIRST TRADE AT 5833.90 ( LOSS OF   22.9 POINTS ONLY) AND WOULD HAVE INITIATED SECOND TRADE AT 5833.9 WHICH SHOULD HAVE GIVEN US PROFIT OF 312.4 POINTS. WE ARE NOT GIVING EXCUSES FOR OUR LOSS BUT TRYING TO SHOW HOW WE CAN IMPROVE IF WE WORK HARD AND TRY TO LEARN.
 In performance sheet there will not be  any changes made, we will keep loss as it is , and see how is the performance including this loss after certain time period only. 

SOMETIMES THERE ARE MANIPULATIONS IN MARKET, WHICH ARE NOT EASY TO DO ALWAYS FOR PEOPLE'S WHO ARE DOING SUCH THINGS, THERE IS NO NEED TO STAY AWAY FROM MARKET BECAUSE OF POSSIBILITY OF MANIPULATIONS, BUT IF U CAN TRY HARD U CAN LEARN HOW TO HANDLE SUCH SITUATIONS.

FOLLOW UP - TRADING GAME OF PROBABILITY

On 26 april it has been mentioned that ----  SEEING LAST WEEK CLOSE WE ARE HAVING FEELING OF NIFTY WILL TAKE OUT THESE RESISTANCES WHICH WILL BE MAJOR BREAKOUT FOR NIFTY ( i.e. IT STARTS TRADING ABOVE 5940-50 )  AND POSSIBILITY OF MAKING NEW LIFE TIME HIGH IN THIS FINANCIAL YEAR. BUT THIS VIEW WILL CHANGE IF  ----
1) It breaks today's low of 5791.55
2) daily close below 5693.25
3) weekly close below 5177.70

But on 28 april first support (5791.55) broken on hourly chart, and second support (5693.25) broken on 3 may on daily chart thus the possibility is now weakning and short term trend is turned bearish ( downtrend ).

Trader always keeps all the possibilities open all the time and changes his views from time to time by seeing price actions taking place on charts. REMEBER, DONT BE ON BULL SIDE OR BEAR SIDE TRY TO BE ON RIGHT SIDE MOST OF THE TIMES.
 

FIRST TRADE CLOSED WITH LOSS, SECOND TRADE INITIATED

Today at 11 am our system indicated change of trend hence closed first trade with loss, we will try to evaluate and minimise such loosing trades. At the same time second trade initiated - sell at 5534.30 which looks like to late but we will see what is in store?

FOLLOW UP - WHAT WILL HAPPEN?, FIRST RADE

On 2 MAY we have written regarding what will happen with help of few charts, In first chart it has been shown that trendline which is supporting in hourly chart was allready broken, also it has mentioned that 5690-5700 is important support which broken intraday ON 3 MAY, after that nifty fallen upto 5550 within single day. This proves that if you learn technical analysis and try to evaluate the things you can trade very well. This fall is after RBI credit policy which raised interest rates, but if you learn technical analysis there is no need to track the news, what will it's impact on economy, stock market , all this will b reflected in charts. Once again we will like to mention that we are not trading according to this techniques because this will require full monitoring of charts during market hours, and take or change your view according to changes taking place in charts. RIGHT NOW YESTARDAY DAILY CLOSE WAS AT IMPORTANT SUPPORT ONCE AGAIN, SO HERE AGAIN THERE IS POSSIBILITY OF BOUNCE BACK OR BREAKING THE SUPPORT.

What is happened to our first trade? It is still in buy mode according to our system, so the position is in deep loss on paper right now, right now looking possibility of we have to close the position with loss, but this will b done only after our system tells that there is change of trend. REMEMBER THIS SYSTEM IS DEVELOPED SO THAT IT WILL REQUIRE LESS MONITORING,

WHAT WILL HAPPEN?

On short term time frame nifty has broken important support line as shown in following hourly chart

So short term trend turned negative (downtrend), but as shown in above chart nifty is oversold so bounce may be possible.
But what daily and weekly charts are indicating?
Daily it is closed above 200 sma and important support line as shown in chart below, will this 200 sma give support once again?

5750 is acting as important daily support  on closing basis, see below

Below chart shows that 5690- 5700 acting as important support

  Above trend line which is acting as tough resistance is shown in above chart

IN SHORT 5690-5700/ 5750 IS IMPORTANT LEVEL TO WATCH IF THIS HELD NIFTY WILL RALLY. BUT ONCE IT IS BROKEN IT WILL BE BEARISH AND PRICE MAY LIKELY HEAD TOWARDS 5500.
ONCE THE TREND LINE ACTING AS RESISTANCE IS BROKEN POSSIBILITY OF NEWER LIFE TIME HIGH WILL INCREASE.