Friday, July 25, 2014

Nifty, on completing a 5 from 7772 to 7841, retraced it totally...

Nifty Intraday Update-III

Nifty Intraday Update-II

Nifty Intraday Update-I

Nifty Pre-Market View.

I need a clarification on retrace method to enter a trade . 
1. Are we to go long or short @ 50 % of the difference and add TO OUR POSITION at 61.8 % of the difference with 80 % of the difference as stop loss ? 
Is it applicable for both rise and fall.
Consider the strength/ weakness of the trend by its prior retrace and consider "cluster presence" as well as "Key numbers" to coincide with the retrace % to choose the "%".
You could choose to trade "Only with the Golden ratio" & ignore other trades.
Knowing EW helps in identifying the sub-waves of a corrective & its likely end..
Yes..It is applicable to both rise & fall. However, during an uptrend, choose only the "long trades by monitoring the last rise retrace" till a reversal happens and choose only the "short trades by monitoring the last fall retrace" till a reversal happens.
This week has shown some easy "long trades" with prices trending up within a rising trendline with HH & HL..
FII's have been buying again for the last 6 days, after 3 days of minor selling- a resumption of the major uptrend. 
Prices, in the short term, have closed above the two key ST averages. (As long as prices close above these, technicals remain strong; only a close/sustaining below it would reverse the ST trend
The ST direction is "biased UP" (Remaining OverBought in Hour T/f for long suggests of bullish undercurrents), as long as prices stay above 7785 & close above these two key averages (21 or 34 hr smas). 
The strategy that has worked consistently well with low risk-high reward ratio is "Initiating a trade at 50%-61.8% retrace with 80% as SL". Adapt to it
Aggressively Holding above 7796-7804(50%-61.8% of last rise), Conservatively Holding above 7772(DHEma/ last pivot low), uptrend continues....
Aggressively Holding below 7789, correction could resume....
(EW wise, another 61.8% retrace held at 7772, sub-waves continue to unfold...)