Trade Set up for 30 aug 20118

 

1. SET UP to TRADE BANK NIFTY

  • Trend: (/⇓ - downtrend)
  • Bank Nifty is in initial phase of Bearish Trend. So, Supply is in total control of market today. Seller will have their dominance over demand.
  • Market set up : (⇑- Supportive to trend )
  • Today Bank Nifty Force set up is "Supportive" for Selling. So, Today is "Good set up" to Sell. You should look for Selling opportunity.
  • F&O trader position: (⇓- Basis is down )
  • The difference between bank nifty's future and spot (Basis) is now 26 points. The basis has fallen from last day about -16 points.
  • Bottom Line :
  • The Trend is down.>>GOOD set up to SELL>>Basis fall.

2. sentiments

  • Global markets:
  • The Asian market is down + Dow future is also trading on red
  • what is news on TV
  • Ruppe is main focus area! If rupee depreciates further, then it is worrisome for the market!
  • Positive newsflow:
  • Canada could join USA Bilateral. morgan Stanley may upgrade Indian Corporate bank. Growth is not the problem.
  • Negative newsflow:
  • The currency has slided so much! & Crude is up!
  • Bottom Line:
  • Sentiments is mild negative. Sentiments is also supportive to Down trend.

3. Game theory ( tug of war between buyer & seller)

  • From where New Buying comes?
  • A. Since sentiments are mild negative, the Outside trader may not buy today.
  • From where new selling come:
  • A. Outside trader-Mild new short selling expected from outside traders. B. Trader's with Long Position- GOOD chance for Long unwind today.
  • Will buyers buys on dips?:
  • Will Seller sell on rise?
  • On rise-Since trend is Down, There will be a higher number of sellers at higher end which propels the market to go down on the intraday rise. Moreover, on Rise, a buyer who wanted to buy has already bought. So Selling on the rise is a dominant strategy as more seller & lack of buyer on rising of downtrend market

4. what I am going to do today (In bank nifty)

  • Set up:
  • Today Bank Nifty Force set up is "Supportive" for Selling. So, Today is "Good set up" to Sell. You should look for Selling opportunity.
  • Sentiments:
  • sentiments is mild negative
  • EDGE:
  • My today trading edge points clubbing setup & sentiments is -110 .Since my edge is less than -50m I will be only looking for shorting opportunity for today.
  • ENTRY on edge:
  • I will short at Open ( If bank nifty open round 50+ gap up)
  • EXIT:
  • I amy hold my position as long as it is woking! ( May be til noon)
 

Abhikumar Patel
Twitter

2 Likes

Hey Great setup posts,

I have doubts on these points though. Can you please check and help us :slight_smile:

  1. “Bank Nifty is in initial phase of Bearish Trend.Today Bank Nifty Force set up is “Supportive” for Selling.”
  2. Sentiments is mild negative. Sentiments is also supportive to Down trend.
    How you come into these ? Any indicators you use which helps you in this ?

Also ,
“My today trading edge points clubbing setup & sentiments is -110 .Since my edge is less than -50m I will be only looking for shorting opportunity for today.”

I didn’t get the context of this. What is edge points and how to calculate one.?

“I will short at Open ( If bank nifty open round 50+ gap up)”

If we had shorted today, it would be agood profits but since there was no gap up , many might have missed this :frowning: Is it always that you wait for gaps during shorting ?

Pretty interesting …the way you analyze. For the first time, I have come across someone who doesn’t talk about support, resistance , risk, reward, stop loss or a backup plan in case the trade you entered doesn’t work out. But all that doesn’t matter as long as you are profitable :smiley: …Good luck!

Good way of analysis :+1:

1 Like

@dexter007,

Ans- I have created my own indicator which is not available anywhere. ( Since it is based on Subjective probability & not on Objective probability) , It is very hard to quantify in indicator!

Again subjective probability based on trade set up & sentiments. One of my secret ingredient.

my answer is- watch this movie which says-always account for variable change My set up cannot be perfect, but it can just guide you what has a higher probability to get max profit.

Moreover, I dont always wait for gap!!! Like today, I have shorted at open with 9 point gap up ( as I have accounted for variable change from the time article I have posted and actual market open time)

Tip for you- Just focus on EDGE and entry , dont read full article. I hope you can also be consistent profitable trader.

P.S- I also trade what I preach with - always accounting for variable change

Your friend
Abhikumar

1 Like

@Dhruv_JC

You inspired me lot by following quote!!

My mantra is simple, when I am facing losses, I cut the loss between 50-70 point of BN.

Abhikumar