Retracement strategy, a must for traders.

 Trading strategy that works wonders besides the supports & Resistance is "Retracement strategy":

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".

Understand its workings.

A trade is not complete once an opportunity is spotted & it is initiated.

A trade needs managing, monitoring.

a. After a trade is initiated at the key retrace point, you keep SL around 80%.

b. Once the prices start to move from your trading point generating profits, you monitor
the "key retrace of that rise, if up move OR the key retrace of that fall, if down move" and

trail your position.

This important part helps you "lock-in the profits as well as points to your new exit points in case of adverse reversals".

c. You manage your trade by part booking and holding the rest with the trailing number that keeps changing based on the price advances or declines.

Follow prices using HH & HL or LH & LL. Do not look for perfections.
Trendline helps to identify end of a move so that you can choose a "retracement".
Ideal is 61.8%; but 50%-61.8% is the zone; 80% is the SL

Do these above and see how your trading results improve substantially during every month.

Nifty Pre-Market View.

Sir, 

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.

Suggestions:

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..

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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...)

Nifty Pre-Market View.

Trading strategy that works wonders besides the supports & Resistance is "Retracement strategy":
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".
Understand its workings.
A trade is not complete once an opportunity is spotted or it is initiated.
A trade needs managing, monitoring.
a. After the trade initiated at the key retrace point, you exit the trade once SL is triggered.
b. Once the prices start to reverse from your trading point generating profits, you monitor the "key retrace of that rise, if upmove OR the key retrace of that fall, if downmove" and trail your position.
This important part helps you "lock-in the profits as well as points to your new exit points in case of adverse reversals".
c. You part book your trade and hold the rest with the trailing number that keeps changing based on the price advances or declines.
Do these above and see how your trading results improve substantially during every month.
FII's are alternating buying with selling in typical of consolidation with in the major uptrend.
Prices, in the short term, have closed below two key ST averages.
"Consolidating 2nd wave" continues, having broken below key retrace points at 7500-18;
The ST direction is "biased down" till prices continue to close below DLEma & these two key averages (21 or 34 hr smas).
Aggressively Holding below 7535, Conservatively Holding below 7543, correction continues....

Nifty Intraday Update-I