my first brush with stock market
happened in 1990
when binny (aka manpreet oberoi)
my classmate in punjab engineering college, chandigarh
shared with me that his father was an active trader in stock market
besides a regular job with ballarpur industries!
he told us that his father had started trading with 10000 corpus
and during the harshad mehta saga
the market value of his father's stock positions had crossed 1 crore
(equivalent to 32 crores of 2010)!
"i can tell the state of the market from the mood of my dad in the morning!" binny told us!
i was reminded of all this when i was having a serious look at the daily calls of krishnamurthy in mudraa.com!
his calls are amazingly but deceptively simple and profoundly effective!
since people have the tendency to take only complicated things seriously little surprise that krishnamurthy's calls have as many critics as are the fans!
this gentleman gives "buy above-sell below" call everyday after a few minutes of market opening.
two lakshman rekhas (trigger lines)
one above and one below the spot value.
though he has not shared the exact criterea he follows to draw those lines but my study says that he tries to identify an upper as well as lower nifty limit which if breachedn mark a decisive movement of the nifty for atleast very short term future!
initially i thought he used "universal" support and resistance levels
but many times i realised that he was doing something else.
i also noticed that he was not playing with pivot points or using some stock level calculator.
i have come to realise that he decides the limits by seeking answer to a simple question
"what is the upper and lower nifty limit which if breached would mean that nifty has taken a decisive direction for the day! and if not breached would mean that nifty is rangebound should be left alone!"
for this, in my opinion, he uses
1) the previous day nifty boundaries
2) and boundaries marked by its early morning moves!
i found this technique wonderfully simple, easy and very very logical.
there are no technical indicators involved
no short-term long-term chart reading
just staying with the reality of the hour!!!
the trouble with chart and indicator reading is that
they inject the trader with an opinion
and the trader's psychology wraps that opinion with ego
and keeps clinging to it like the captain of a sinking ship!
in this "buy above-sell below" method
we follow what the market is doing
irrespective of whether we understand the reason or not
irrespective of whether the indicators and fundamentals and charts agree or not
just plain "follow the trend of NOW" and think later
what is happening becomes more important than what should happen!
this way, no market operator or forces can trick you!
whatever he does, u follow him!
but i want to add two words of caution
1) ruthlessly square-off your position if nifty retraces into the lakshman rekha (this does happen once in a while)
2) book profit when you are getting more than you can afford to let go! (many times nifty retraces after going reasonably far!)
like the mood of binny's father
the mood of nifty in the morning
reveals the immediate intentions of it!
i remember, i had shared similar technique in my posts (noon express and forenoon express)
but krishnamurthy's method is much more simple and effective!