Perfect example of Capping eih! is it high probabitlity setup?
Yes, it is, especially for LTFs if the context is inside a HTF zone, it’s high probability reversal setup.
Capping means price trading closer to HTF support/resistance zone right?
The term CAP was originally meant to signify that after a long move in one direction when a flag is engulfed, price is ready to turn in reverse direction so price is now “CAPed”. However, when we apply it in different scenarios especially when applied in LTFs, we look for a background context for a HFT resistance/SZ where CAPing is often observed.
Check chart of BEL… Had HTF resistance at 115.5, Look how it has fallen once it touched that zone. Though I didn’t take trade, does this fulfill CAP criteria? https://www.tradingview.com/x/LGzY7Gpi
You brought out a good example my friend! Let me explain it in detail as to how I would have viewed this beautiful CAP that was playing out just before the Friday’s new development!
Earlier while drawing S/R levels I didn’t take HTF levels in consideration, it was all about 15m timeframe that I trade in. Your PA strategy has made me take HTF’s in consideration as well. Will love to learn more from you.
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@ShubhS9 Here it is for you my friend! Thank you for bringing up BEL example, this was one of the best scenarios to explain CAPing live, If someone was waiting for confirmation, this was it on Daily.
Here is the example with explanation.
Another example in Nifty, see how it has fallen after touching 11700 mark… https://www.tradingview.com/x/2S7AU96h
Though you’d have to look at Daily Chart to get clear picture. On 15 minutes it showed breakout of Trendline but look at Daily TF… https://www.tradingview.com/x/UpH5f6Ms
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Time to be careful/watchful in Nifty! Two HTF zones to watch out. Only with strong confirmation on LTFs, because fundamental news is also playing out, so washout of these zones are also possible.
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How do you trade this setup? Do you just put pending Buy/Sell order at that level and wait for it to get triggered or wait and watch for confirmation?
In the case of BEL, the Daily CAP zone was a conf for the Monthly SZ, so conf zones can be taken directly with pending limit Buy/Sell orders. That’s how I do it. If you feel that Daily zone is big and need a smaller zone then conf in LTFs like 1hr or 15min/5min can also be taken.
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Is this high probability setup? What is its success rate?
CAPing? With good context I have seen it play out very well.
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Those who were following PA on Nifty at the strong Weekly levels, Monthly SZ, Daily FTR level, and beautiful confirmation on 5 min TF, are already 2 RR in profit, may take some profits off the table to make it risk free for a bigger target.
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The conf trade on 5m LTF was a 8/1 RR trade to the first target roughly 135 points, chart for this? I will leave that to you! 
If you still want it then send me a msg, I will msg it back to you.
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