I am not a certified analyst. The charts shown and the content in the blog are for educational purpose only and in no way is a buy or sell recommendation. Readers are advised to use discretion.

Sunday 12 July 2015

How to Locate Strong Setups !!

(SS) Strong Setups Series - 1

A lot of People ask me -"How to locate a Trade setup !!"  I always tell them, setups are everywhere, which can be traded also, but one should wait for a Strong trade Setup! That is more important !

Now the question is still Open - Which setups are Strong?

--This can't be put in a single post, so will try to explain in a series of posts.. Kindly have patience & go through with me in this whole journey, you will find it interesting & profitable too ! It will be written taking into consideration of novice traders with basic knowledge. I will try to analyze the live market setups (positional with the system). Lets see how it unfolds --

Lets start from a different angle-  Traders.
Every Trader is different. Each trader is unique with Unique personality, monetary needs, different trade size, risk capacities, Psychology, Fear levels, satisfaction levels, indicators & so on.
Remember, every damn indicator can work & works, if followed properly. But, every indicator has certain conditions to work. One needs to master few of them only, not over analyzing & paralyzing their decisions.. Look at the chart below with most important & trusted indicators (current Daily Chart of Nifty) if we can conclude the decision-
1) Nifty above all moving averages & EMAs (important ones) - means  UP/ Sideways (in case 1 MA is above)
2) MACD yet to cut down - means UP
3) RSI coming down from overbought zone - DOWN
4) Stochastic clearly DOWN
5) Trendlines - UP
6) Patterns - Rising Wedge - DOWN,  a small inverse H&S - UP & with a target
7) Price action - Higher Highs, higher lows - UP

so which will work & constitute Strong Setup ?  get off the screen & Think for a while below things-
1) Can all indicators/ patterns tells truth?
2) Are indicators really important?
3) Do they Lag?
4) Do we need 1 / 2 or 5 indicators along with PA, trendline...?

----------------------------------------------------
I will come straight to the point -
1) Can all indicators/ patterns tells truth? - Yes, they need to get Interpreted properly. One should use indicators as per traders personality - Example - I  use & Love Bollinger Bands
2) Are indicators really important? - for Positional definitely need to see few & good tool for conformation in Intraday also
3) Do they Lag? - may or may not - like Bollingers & RSI - they don't lag as much as people says.
4) Do we need 1 / 2 or 5 indicators along with PA, trendline...? - One or at the max 2 are enough for use.
Remember, Indicators tell a lie, but they don't lie together!

Anybody can go ahead with any indicator/ without indicator, but i would like to continue this journey with Price action & Bollinger Bands !!

to be continued..


Nifty Positional View - 12.07.2015

Positional: So the downward Bias ended, but to me, this doesn't mean an Upward trend has started. To me, it seems the market has entered in a Range as marked an i am in shorts.
1) Breakout of Range high has failed.
2) Nifty couldn't give my desired close outside my favorite BB
3) Tho MBB is supporting, Weekly trend is counter.

so overall, below 8480 NS One should be in shorts or can add Short position on a bounce up coming on Monday/Tuesday & should Tgt near 8100 odd levels..  Change to Up only a close above 8480.