Nifty has moved 200 points from 5250 to 5465, but the kind of move it made was not easy to ride. For every 70-100 point upmove there was a 50-70 point of a pullback.
1) Moved from 5250 to 5341(91 points) then pulled back to 5269 from 5341, a correction of 72 points.
2) Moved from 5269 to 5412 ( 143 points) , then pulled back to 5354 from 5412, a correction of 58 points.
3) Then upmove from 5354 to 5425 (71 points), then pulled back to 5370 from 5425, a correction of 55 points.
4) Upmove from 5370 to 5442 ( 72 points), then pulled back to 5392 from 5442, a correction of 50 points.
5) Upmove from 5392 to 5465 ( 73 points), then pulled back to 5412 from 5465, a correction of 53 points.
Can you find some similarity of last three moves, it moved up approx 70 points and then pulled back around 50 points. Nifty was moving in a channel.
For Intraday traders - In a hindsight, It looks very easy that we should have gone long at every correction of 50 points and then book long and initiate short after every 70 point of upmove, But how many of intraday traders could have done it??
Now question arises - When do we get smooth rides and when do we get bumpy rides?
The answer is - When there are different trends in different time frames we get bumpy rides. And when all time frames synchronized to same trend we get smooth rides till next major support/Resistance.
In this whole bumpy up-move of 200 points, 5 min, 10 min were in uptrend but 30 and 60 min were in downtrend, so the bigger time frame players were shorting on rallies leads to the bigger corrections at every up-move, and the smaller time frame players were buying dips on any such correction of 50 odd points.
Another example is for 21st Aug, before it broke 5425, it was going up and down, because smaller time frames were in uptrend and bigger time frames were in downtrend.but once it broke 5425 it was a smooth ride till 5260. Because now smaller and bigger time-frames were all synced to the downtrend.
The bumpy ride of last 200 points up-move will be converted to a smooth ride once 5490 is taken out in nifty, when bigger time frames will also turn to uptrend.
Happy Trading
Pawan
1) Moved from 5250 to 5341(91 points) then pulled back to 5269 from 5341, a correction of 72 points.
2) Moved from 5269 to 5412 ( 143 points) , then pulled back to 5354 from 5412, a correction of 58 points.
3) Then upmove from 5354 to 5425 (71 points), then pulled back to 5370 from 5425, a correction of 55 points.
4) Upmove from 5370 to 5442 ( 72 points), then pulled back to 5392 from 5442, a correction of 50 points.
5) Upmove from 5392 to 5465 ( 73 points), then pulled back to 5412 from 5465, a correction of 53 points.
Can you find some similarity of last three moves, it moved up approx 70 points and then pulled back around 50 points. Nifty was moving in a channel.
For Intraday traders - In a hindsight, It looks very easy that we should have gone long at every correction of 50 points and then book long and initiate short after every 70 point of upmove, But how many of intraday traders could have done it??
Now question arises - When do we get smooth rides and when do we get bumpy rides?
The answer is - When there are different trends in different time frames we get bumpy rides. And when all time frames synchronized to same trend we get smooth rides till next major support/Resistance.
In this whole bumpy up-move of 200 points, 5 min, 10 min were in uptrend but 30 and 60 min were in downtrend, so the bigger time frame players were shorting on rallies leads to the bigger corrections at every up-move, and the smaller time frame players were buying dips on any such correction of 50 odd points.
Another example is for 21st Aug, before it broke 5425, it was going up and down, because smaller time frames were in uptrend and bigger time frames were in downtrend.but once it broke 5425 it was a smooth ride till 5260. Because now smaller and bigger time-frames were all synced to the downtrend.
The bumpy ride of last 200 points up-move will be converted to a smooth ride once 5490 is taken out in nifty, when bigger time frames will also turn to uptrend.
Happy Trading
Pawan
Nice article Pawan. Hope you will keep updating your blog with such useful info which normal day traders like me wont notice much....... Thanks...
ReplyDeleteSo basically, nature of move has everything to do with synchronization among all the given time frames...how one can conclude that any particular time frame is in up trend/down trend/sideways?
ReplyDelete