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Understanding trend type with Nifty Intraday Chart
| From : Dheeraj Trivedi at 12:03 PM - Jul 19, 2009 ( ) |
Share it on Facebook1. Good Uptrend
2. Good Downtrend
3. Correction
4. Trading
It is the Trading which is most frequent (almost 80% of the time) and most dangerous for new entrants in Intraday, this is controlled by big volume traders in absence of any clear trend and they make money, leaving small investors domed. Following observation will help intraday people to identify the market behaviour and trade accordingly..This will surely make you better equipped about entry points and exit points..
Settings on your charting software....now a days charting software it is must.
1. Set 5 Day intraday chart with 5 mts candle stick mode.
2. Apply 20 Days, 50 Days and 80 Days EMA on this chart.
3. Observe from opening bell itself.
Market Behaviour identification..
1. Good uptrend: After intraday increase, the correction will take place only upto 20 EMA line. The market will keep on making new highs after attempting to touch 20 EMA line and the correction candle will not form below 20 EMA line.
2. Good Downtrend: Same as above but now 20 EMA line will be touch from the down side.
3. Correction: This will always happen after 3-4 days of strong movement in one direction. Market will reverse upto 50 EMA or upto 89 EMA and then continue its journey in the original direction of trend. Most likely it will touch 89 EMA and will involve full day. Small intraday correction can come upto 50 EMA.
4. Trading: Very dangerous. Market will limit itself to certain range, will not stick to any of these EMAs and will call for more detailed study of stochastic and fibbonacci series for better understanding.
Hope this will help in making better entry/exit in trade.
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Thanks for reviving the thread. Pl monitor today's CAC chart (for ease I am putting up the Indialivechart link, please see the intraday 20 EMA).
http://indialivecharts.com/charts.aspx?Name=CAC%2040&ID=32
1. How the 20 EMA worked... It was apparently an upmove and 20 EMA support gave good opportunity for a buy.
So one should have bought at 3740 - 3745 levels.... Entry Point
Once Buy trade was taken, one should have taken a caution at 3760 - 3765 levels, double top formation, part profit booking shoud be
done here.
2. How Fibo worked here ?
Prev Closing 3708
Opening High 3764
Range 3764 - 3708 = 56 Points
In uptrend retracement once started is of 38.2% (Stop Loss 61.8%)
So 38.2% retracement gives a value of 3764 - 0.382*(3764-3708) = 3742.
Please see that this figure 3742 was the exact support point for retracement, Both Fibo and 20 EMA gave the buy signal at the same price.
The concepts worked in this trade..
1. Uptrend 20 EMA Support on Intrday chart (5 mts candle).
2. Fibo Retracement for Stop Loss.
3. Double Top Formation for first target.
Superb anaysis! went unnoticed because of Legpullers duels! Atleast here after they realize y we r here! Special thanks to Nitin for bringing this up! Thanks n regs,
Hello Nitin Potade, If you have free time please find out such great articles and do help to newbies
That was an excellent article gone under the heap of books (threads). Thanks to Nitin Potade for dusting it and placing it on the top of the table. Really wonderful job
What setting you would suggest for stochastic and fibbonacci series for the trading market? one can refer charts at site http://www.icharts.in/ for some information
good.. understood.. the point why mostly loss at intra day since 80% of the time it is at trading zone.. could you post when you see market at 20% part... thanks for the info ...
Thanks dhiraj for good information. I am using Odin (religare) but i didnt find chart in software. Can u/anyone guide me more.
Pl observe today, market is in correction mode. Watch carefully.
thank dheeraj tivary for ur useful analysis
Please suggest any charting software. thanks in advance.
very gud strategy.thanx a lot u had cleared my lots of querey of my own trading
Thanks Dheeraj. I am using ODIN Diet, which has very poor charting and also presntly it doesn't provide backfills. Please suggest any charting software. thanks in advance. regards MS
The idea is how to make use of above information...with respect to nifty
1. Mudraa experts provide good tips, but these tips are provided at the start of the day, with a clear warning that trader should
watch and then take the trade as per tips.
2. Many a times these tips are based on Short at top and buy at Bottom, which is very dangerous, this is where this
observation will come handy. Also many a times a trader can find himself buy at top and short at bottom. Here also this will
help.
How..
1. If the price is moving above 20 EMA (as per charting as specified in the start of this post) and continues to make new high
after just touching 20 EMA line (or fails to make a full candle below 20 EMA line), do not short even if you have some tips.
2. If the price is moving below 20 EMA (as per charting as specified in the start of this post) and continues to make new low
after just touching 20 EMA line (or fails to make a full candle above 20 EMA line), do not buy even if you have some tips.
3. 20 EMA / 50 EMA / 89 EMA they provide good support and resistance levels intraday, invariably these values will also
figure in your tips. So if tips point is near these EMA values, then initiate the trade only if a full candle is formed below (for
short) and above (for buying) EMA line. (Ideally after a full candle formation a new candle must start crossing over in trade direction for entry.).
Members please give your views...as this is to help fine tune the tips.
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