Monday, August 31, 2009

CUES FOR AUGUST 31


********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4652.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.


********CUES--

--Nifty September future premium decreased to 5.4 points so cost of carry decreased. (Bearish)
--Nifty open interest increased by 14 lacs suggests short addition. (Total OI now at 2.47 cr)
--Nifty calls added 33 lacs and puts added 45 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 1.20.
--4600 puts had open interest of 29 lacs (+36%) and 4800 calls had open interest of 24 lacs (+35%), so 4600 and 4800 will be important levels to watch for.
--India VIX closed at 33.27, decreased by 4.5% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 34/16. (Bullish)

Sunday, August 30, 2009

TRADING PLAN AND PERFECT TRADE ENTRY AND EXIT

What is a trading plan?
Contrary to popular belief, you do not need to know where the market will top and bottom to make money in the markets. In fact, that is where most people go wrong.
The best traders in the world realise that neither they nor anyone else knows what is going to happen. Sure, everyone can point out tops and bottoms after the fact, but no matter what anyone tells you or tries to sell you, no one can pick tops and bottoms consistently before the fact.
So how do you make money without picking tops and bottoms?
Successful trading is not dissimilar to any other successful business. Every successful business has a business plan and so do successful traders.You may have already realised this from the previous chapter, when I mentioned that successful traders have a systematic way they approach the market.
Plan your way to success
Have you ever really thought about why companies like McDonald’s are so successful? It’s certainly not the taste of their burgers.
It’s because they follow a well-tested methodology the world over. The staff in Sydney is following the same regimen as the staff in Singapore. The burgers in Auckland are made the same way as they are in Athens. We can all learn a lot from this approach.
To be successful, you need to treat your trading like you would any other small business. If you were about to invest $50,000–$100,000 to start up a café or a lawn-mowing service, wouldn’t you research the market carefully first? Wouldn’t you write up a business plan? Of course you would.
Trading should be treated the same way – given the same respect if you like.
Your trading plan
A trader’s business plan is known as a trading plan – it defines her approach to trading. A properly constructed trading system will leave no room for human judgement because it will define your plan, given any circumstances that may arise. It is a distinct set of rules that will instruct the trader what should be done and when to do it.
The importance of a trading plan cannot be overstated. Without a consistent set of guiding principles to govern your trading decisions, you will most likely hop from one trade to the next, impelled by emotions. By not having a plan, you are planning to fail.
Proof it works
All successful traders that I have come in contact with have written down their exact trading methodology, at one point or another.
Have you ever heard the story about one of the most famous system traders of all time, Richard Dennis? In mid-1983 Dennis was having an ongoing dispute with his long-time friend Bill Eckhardt about whether great traders are born or made.
Dennis believed that trading could be broken down into a set of rules that could be passed on to others. On the other hand, Eckhardt believed trading had more to do with innate instincts and that this skill comes naturally.
In order to settle the matter, Dennis suggested they recruit and train some traders and give them actual accounts to trade with to see who was right.
To cut a long story short, Dennis taught his trading methodology to a group of students he named ‘The Turtle Traders.’ This group of traders later became some of the most successful traders of all time, proving that a thought-out and well-documented trading plan is the key to success.
A trading plan is simply a set of rules that addresses every aspect of a trade such as entry and exit conditions and money management. Regardless of how complex it may be, a good test for your trading plan is to hand it to someone else to read thoroughly and then see if they have any questions about it.
If they can easily understand all the rules and requirements of your strategy with little to no questions, then you have compiled a sound trading plan.
*Side Note: It must be recognized that Dennis’ trading method isn’t suited to everyone, with over 60% of all trades taken by the system resulting in a loss. It wasn’t the system that made these traders so successful, it was that Dennis showed them the importance of having a plan and following it
Write it down
Why is it so important to write your trading plan down? Something magical happens when you commit it to paper and, believe it or not, this will be one of the most important things you can do in your endeavour to becoming a successful trader.
When you take time to sit down and spell out how you perceive the markets, you are beginning to take responsibility. If the market does not behave according to what you wrote, the only conclusion you can arrive at is that your perception is wrong. Accepting that possibility is a huge step towards maturing as a trader.
When you write down how you are going to enter a trade, based on certain events, you are eliminating any possibility of placing the responsibility on anything else but yourself. Now when something goes wrong, as it inevitably will when you’re learning a new skill, you’re the one to fix it!
Trading plan format
Again – to draw on the business plan analogy – just as there is a standard format for designing any business plan, there is also a format for designing a trading plan.
There are three major components within any trading plan: entry, exits and money management rules. Here’s a quick summary.
Tested entry rules. Entry rules should be a precise set of rules that a tradable instrument must pass before you enter a trade. Entry rules should be simple, direct, and leave no room for human judgement.
Tested exit rules. Entering a trade is all to no avail if you do not know when to exit your position. Having a set of rules that define your exit is equally as important as a set that defines your entry.
Strict money management rules. Perhaps the most important and least addressed aspect of trading is the ability to manage risk. A profitable trader is one who has the ability to manage the risks associated with trading. This is achieved with strict money management rules.
While simple in their explanation, these three components together will ensure your trading success. In the chapters that follow, we will go into these in more detail and you will work through a process to design each component.


The perfect trade entry
Every trader needs a trade entry system. In chapter 3 we covered the first fundamental step of trading, that is, to choose the market in which you want to trade. But, within each market, there is a plethora of trading opportunities to choose from – I call this the universe of securities. So how do you choose from this vast universe? Simple. Predefine your entry rules.
Trade entry rules are a stringent set of conditions that you develop, document and then apply, to decide when you are going to enter a trade. It doesn’t matter what securities you’re trading, you just need a consistent method of entry. Like sifting through a bucket of sand trying to find pieces of gold, the same approach is used to reduce your universe of securities to a shortlist of those that meet your criteria.
Developing your trade entry rules
As in all aspects of trading, there are many theories on trade entry and how to exit trades. I believe the best way to approach entries should be simple, direct and leave nothing to human judgement.
This is contrary to the philosophy of many traders who buy stocks based on media reports, ‘expert’ opinion, rumours and/or gut feel. The good news is that by acting contrarily, you will do what most traders never do… make a profit.
Reinventing the wheel
I spent a lot of time in chapter 3 telling you why you shouldn’t copycat someone else’s system, but that’s not to say you can’t take elements of a proven trading plan and stitch them together into something that will suit your personality.
Let’s revisit the example of Richard Dennis and his Turtles. Dennis’ protégés were successful because they were under his direction at all times. Every trade was heavily scrutinised and made according to his strict rules. The students had to follow these rules or be dropped from the project.
The fear of loss forced the traders to follow the system no matter what. In the real world, most people would not have the discipline to do this. And nor should they; it wasn’t designed for them.
Furthermore, the Turtles were trading with someone else’s money. When it’s your own money on the table, you need to be completely comfortable with the decisions you make, and you can’t do that unless your system suits your personality.
Dennis’ students went on to become successful traders in their own right because they learnt discipline from their mentor, not because they continued to trade his system out of the box. They adapted it to suit themselves. And that’s what you should do.
Think of it this way: how many people do you know who have stayed in a job or field of work just because it’s what they’re used to? They may not love it, but they persist just the same.Maybe you’re one of those people. But, while these people might be able to do that job with their eyes closed, they will never excel at it if they’re not passionate about it. Their heart needs to be in it.
Trading is the same. If you’re not 100% behind your trading system, chances are you won’t be able to stick to it, and if you can’t stick to your system, you will never reap the benefits you are hoping for.
Keeping trade entry rules in perspective
Most traders believe the key to success is being able to pick the bottom of the market. This is why 99% of traders spend most of their time fidgeting with the entry; they are looking for that elusive secret, That one setup that will ensure ongoing success.
But let me tell you from experience – that setup rule doesn’t exist. And, in actual fact, it’s not that important. Spending countless hours optimising your trade entry rules, trying to find that ‘perfect’ indicator, can actually do more harm than good. Over optimisation based on historical data actually decreases the profitability of your trading system when trading in real-time. Typically, the more you optimise, the less robust your system tends to be.
Remember Tharp’s chart? (refer to chapter 2). He said that the trading system, which includes your trade entry rules, accounts for only 10% of what it takes to be a successful trader. That means, there is another 90% of ‘stuff’ you should be concentrating on, such as money management (discussed in chapter 6).
Amazingly, a system can have a very random entry signal and still be profitable as long as money management is in place. Take the following real-life example from Tharp.
Example:
Tom Basso designed a simple, random-entry trading system … We determined the volatility of the market by a 10-day exponential moving average of the average true range. Our initial stop was three times that volatility reading.
Once entry occurred by a coin flip, the same three-times-volatility stop was trailed from the close. However, the stop could only move in our favor. Thus, the stop moved closer whenever the markets moved in our favor or whenever volatility shrank. We also used a 1% risk model for our position-sizing system…
We ran it on 10 markets. And it was always, in each market, either long or short depending upon a coin flip… It made money 100% of the time when a simple 1% risk money management system was added… The system had a [trade success] reliability of 38%, which is about average for a trend-following system.
Source: Tharp V, Trade Your Way to Financial Freedomwww.ultimate-trading-systems.com/tywtff
Although a little convoluted in its explanation, this example illustrates that an entry strategy as simple as a coin toss can turn solid profits.Most traders spin their wheels trying to get in at the ‘best’ price, even though this is not where the money is made.
So what’s the take-home rule here? It is easier to copycat your way to success than to try to re-invent the wheel. According to Anthony Robbins, the way to become as healthy as possible is to find the healthiest person you know, ask them how they do it and copy them.
Similarly, the way to select your trade entry rules is to find the best, proven entry system you can for your selected market and model your entry on that system..Sure, you can waste months and spend thousands of dollars testing different methods, but why put yourself through that? Would you rather be a wealthy copycat or a broke trailblazer?
Trading is one of the few industries where people actively share their methods. In other areas of business, people tend to keep their success secrets to themselves; in trading, there are innumerable proven systems and models out there that you can access.Admittedly, you have to pay for most of them, but they are readily available.
So now you have two choices: you can design your own trade entry rules (which includes appropriate back testing) or you can apply a ready-made entry system, confident that someone else has done all the hard work for you.
The better choice seems obvious to me, but I’m not here to make your decisions for you. I’m here to pass on as much information as I can and help set you on a course that will suit your situation.
Going it alone
If you have decided to give it a go yourself, here are a few good rules of thumb to follow. Your trade entry rules should address each of the following:
trend
liquidity
volatility
Let’s look at these in more detail.
Trend
The cornerstone of technical analysis is the trend. Remember ‘the trend is your friend’ and you always want to trade with it, not against it. I believe this to be the most critical component of any trade entry system. You need a way to measure the trend.
There are many ways to identify trends, and as with most things in trading, there’s more than one way to skin a cat. The key is to have a method in place.One of my preferred methods for identifying trending securities is to find securities trading at their recent highs.That is to say, the highest high price must have been achieved in the past x number of days (where x is the variable depending on the timeframe you are trading). The longer the timeframe, typically the higher the variable.
Example:
If I were to trade a medium to longer term approach I might want the highest high price in the past 200 days to have occurred in the past 20 days.I use a charting package called MetaStock (covered in more detail in chapter 8).
Using MetaStock, the formula would look like:HHVBars(H,200) <>Liquidity
Liquidity is an important determinant because you want to be trading securities that you can buy and sell quickly and without moving the market.You never want to be caught in a position where you want out but there’s no one to buy.
With liquid instruments, such as the forex market that trades billions of dollars each day, trades are happening constantly, so your activity alone will not move the market. In short, avoid illiquid securities.
Example:
Depending on the size of your float, you might want the average daily trade volume to be greater than $400,000. This could be achieved by requiring that:
The 21-day average of volume multiplied by the closing price be greater than $400,000.
Using MetaStock the formula would look like:Mov(v,21,s)*C > 400000
Volatility
Volatility is simply a measurement of how much a security moves. Not whether it goes up or down, just how much it fluctuates.It is important to trade securities that move enough for you to make a profit. Of course you don’t want securities that are so volatile you can’t get to sleep at night.
On the other hand, you don’t want something that moves at such a snail’s pace that it is not delivering the returns you are after.One of my favourite ways to identify volatility is using the ATR method,[1] which indicates how much a security will move, on average, over a certain period.
Here’s how I might use this method. A $10 security might have moved fifty cents per day on average over the past 21 days. I can simply divide this value by the price of the security to calculate the average percentage movement of a security over the past 21 days. With this value, I can stipulate a minimum and maximum volatility value.
Example:
If I were a reasonably conservative trader I might want a security to trade between a band of 1.5–6%. That is to say, I want the ATR divided by the average closing price, over the past 21 days, to be greater than 1.5% and less than 6%.
Using MetaStock, the formula would look like:ATR(21)/Mov(C,21,S)*100 > 1.5 andATR(21)/Mov(C,21,S)*100 <>Adapting a proven system
If you’ve decided adapting a ready-made and tested system is best – I’ve done the hard work for you. I have hand-picked the best systems for your chosen market.These courses will not only educate you about the market you choose but they also provide you with the exact trade entry rules you need to include in your trading plan.
Simply follow the link to your selected market.
Stocks – http://ultimate-trading-systems.com/stocks
Options – http://ultimate-trading-systems.com/options
Futures/commodities – http://ultimate-trading-systems.com/futures
Forex – http://ultimate-trading-systems.com/forex
Documenting your entry
Finally, as with everything we do, it’s important to document your new trade entry rules. As I’ve said, a good set of entry rules are simple, direct and leave no room for human judgement.Take the trade entry rules discovered through your own research or from your selected program and write out exactly how you will enter a position.This simple act of documentation puts you among the top 10% of traders.
Actions
If you have decided to develop your own system from scratch, plan your entry criteria making sure to do an appropriate amount of back testing – documenting everything.
If you’re looking for a ready-made entry system to get you started, get yourself the system that corresponds to the market you have decided to trade in:
Stocks – http://ultimate-trading-systems.com/stocksOptions – http://ultimate-trading-systems.com/optionsFutures/commodities – http://ultimate-trading-systems.com/futuresForex – www.ultimate-trading-systems.com/forex
Still not sure what to trade? Purchase Triple Your Trading Profits – This course shows you how to select a market that’s right for you. www.ultimate-trading-systems.com/tytp

The perfect trade exit: profit management
Identifying a good trading opportunity and setting your maximum loss is all to no avail if you don’t know how you’re going to. Typically, in most trading books, trade exit is covered in the discussion on risk management.
To me, profitable exits deserves its own category, more aptly called profit management. Before you enter a trade, you should always know how you will exit it.
There are at least two possible trade exits for every trade:
How you will exit a losing trade (defined in the previous chapter with the use of initial stops)
How you will exit a profitable trade.
Both stops must be written down before you enter the trade – mental stops don’t count! Having these two exits pre-defined ensures you adhere to the age-old rule of trading: let your profits run and cut your losses short.
Why stops are so important
As human beings, we are hardwired to fail as traders. What we need to do to be profitable traders really is counter intuitive.
Here’s what I mean.
The intuitive reaction when a trade goes against you is to hold on until it turns around.In so many other areas of our lives we are taught to be patient and hang on… All good things come to those who wait. But in trading it’s different.
Unfortunately, and most likely, if you hang on, these losses will be compounded as time passes. The counter intuitive reaction is to cut losses short and move onto the next trade.Similarly, the intuitive reaction to a trade turning profitable is to sell.
Our human nature is to crystallise this profitable trade and come out a ‘winner’. Clearly, this is in direct conflict to the rule of letting your profits run.The counter intuitive (and correct) response is to let your profits run.
Trailing stops
So how do you know when to implement your trade exit plan? By using a trailing stop.
In short, trailing stops are typically set in a very similar method to your initial stops, that is, based on technicals, indicators and/or percentages.The only real difference is the price at which you calculate.
Your initial stop is calculated from your entry price whereas your trailing stop is calculated from the highest price since entry. In this way, this stop ‘trails’ price… as price moves up, so too does your stop.
Trailing stops will allow you to ride the trend for longer, while locking in profits should the trend reach its end.The trick is to find the balance between giving your trade enough room to move, while also having the stop tight enough to not give back too much profit.
Again, to echo what was said in the previous chapter: Generally, short-term traders will set their stops closer to the price, while longer term traders tend to give their trades a little more room to move.
My preferred stop
Despite the fact I always say it doesn’t matter so much what you choose – the important thing is just to have something in place, I’m still often asked what method I use for setting my stops.
I personally like a stop I call the ‘LL stop’.
The LL stop looks for the lowest low (LL) in the past x number of periods, where x is set based on the style of the system I’m trading. I then set my stop one to two points below this point.For example, here’s how I define this in one of my short–medium-term trading systems.
My initial stop is set to be the lowest low (in price) over the past 21 days. As the trade progresses and my trailing stop kicks in, I look for the lowest low in the past 21 days as calculated from the current price.
It’s a great little method, since I find it not only respects a security’s volatility (setting the stop wider or tighter based on price action) but it also has a great knack for finding support lines and setting your stops one to two points below.
Setting your exits
Think of setting your trade exits as an ejector seat when things go wrong and a seatbelt to strap you in when things go right. As with entry conditions, exits should be precisely defined and 100% mechanical, with no room for emotional intervention.
Part of becoming an experienced trader is not only learning the markets and developing a discipline for sticking to your strategy, but also preparing yourself to take a loss.
Once you start trading, you will learn to not get so attached to individual trades – not to sweat the small stuff. You will be better able to see the big picture and see how small losses are a real and unavoidable part of any successful trader’s system.
You are now ready to document your trade exit rules. By documenting your trade exit rules you have just put yourself among the top 1% of traders.

from
Source: Tharp V, Trade Your Way to Financial Freedom
www.ultimate-trading-systems.com/tywtff

Thursday, August 27, 2009

CUES FOR AUGUST 28


*****Nifty is trading in narrow range since 2 days so expansion of the range is likely on 28th August.
********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4629.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty September future premium increased to 9.6 points so cost of carry increased. (Bullish)
--Nifty open interest decreased by 52 lacs suggests short covering. (Total OI now at 2.33 cr)
--Nifty open interest put-call ratio is at 1.18.
--4600 puts had open interest of 22 lacs (+73%) and 4900 calls had open interest of 26 lacs (+26%), so 4600 and 4900 will be important levels to watch for.
--India VIX closed at 34.84, decreased by 4% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 26/24. (Bullish)

----INDIA VIX support line broken so chances of nifty going above 4730 are high.

Tuesday, August 25, 2009

NIFTY IN ASCENDING TRIANGLE


---NIFTY IS TRADING IN AN ASCENDING TRIANGLE. (RISING WEDGE)
---NOW THE RANGE HAS REDUCED TO 4640-4680.
--ANY BREAKOUT FROM TRIANGLE (UP OR DOWN) WILL BE GOOD TRADING OPPORTUNITY.

CUES FOR AUGUST 25

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4444.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future premium increased to 9 points so cost of carry increased. (Bullish)
--Nifty open interest increased by 2 lacs suggests long addition. (Total OI now at 2.78 cr)
--Nifty calls shed 18 lacs and puts added 35 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 1.22.
--4600 puts had open interest of 35 lacs (+93%) and 4700 calls had open interest of 42 lacs (+4%), so 4600 and 4700 will be important levels to watch for.
--India VIX closed at 63.58, increased by 65% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 47/3. (Bullish)

Monday, August 24, 2009

CUES FOR AUGUST 24

********POSITIONAL STRATEGY--

---Ideal Strategy- INITIATE LONG.
---Do not hold long if closes below-4387.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future premium increased to 7 points so cost of carry increased. (Bullish)
--Nifty open interest increased by 6 lacs suggests long addition. (Total OI now at 2.76 cr)
--Nifty calls shed 25 lacs and puts added 20 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 1.09.
--4500 puts had open interest of 40 lacs (+21%) and 4700 calls had open interest of 40 lacs (-9%), so 4500 and 4700 will be important levels to watch for.
--India VIX closed at 38.51, increased by 4% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 46/4. (Bullish)

Sunday, August 23, 2009

WHY DO TRADERS FAIL?

Why Do Traders Fail?
by Jeffrey Kennedy,
Elliott Wave International August 7, 2009
I think that, as a general rule, traders fail 95% of the time, regardless of age, race, gender or nationality. The task at hand could be as simple as learning to ride a bike for the first time or as complex as mapping the human genome. Ultimate success in any enterprise requires that we accept failure along the way as a constant companion in our everyday lives.
People fail because they use inadequate systems. In other words, when traders fail, it’s primarily because they follow faulty trading systems – or that they follow no system at all.So what is the right system to follow as a trader?
To answer this question, I offer you what the trader who broke the all-time real-money profit record in the 1984 United States Trading Championship offered me. He told me that a successful trader needs five essentials:

1. A Method

You must have a method that is objectively definable. This method should be thought out to the extent that if someone asks how you make decisions to trade, you can quickly and easily explain. Possibly even more important, if the same question is asked again in six months, your answer will be the same. This is not to say that the method cannot be altered or improved; it must, however, be developed as a totality before implementing it.

2. The Discipline to Follow Your Method

‘Discipline to follow the method’ is so widely understood by true professionals that among them it almost sounds like a cliché. Nevertheless, it is such an important cliché that it cannot be ignored. Without discipline, you really have no method in the first place. And this is precisely why many consistently successful traders have military experience – the epitome of discipline.

3. Experience

It takes experience to succeed. Now, some people advocate “paper trading” as a learning tool. Paper trading is useful for testing methodologies, but it has no real value in learning about trading. In fact, it can be detrimental, because it imbues the novice with a false sense of security. “Knowing” that he has successfully paper-traded during the past six months, he believes that the next six months trading with real money will be no different. In fact, nothing could be farther from the truth. Why? Because the markets are not merely an intellectual exercise, they are an emotional one as well. Think about it, just because you are mechanically inclined and like to drive fast doesn’t mean you have the necessary skills to win the Daytona 500.

4. The Mental Fortitude to Accept that Losses Are Part of the Game

The biggest obstacle to successful trading is failing to recognize that losses are part of the game, and, further, that they must be accommodated. The perfect trading system that allows for only gains does not exist. Expecting, or even hoping for, perfection is a guarantee of failure. Trading is akin to batting in baseball. A player hitting .300 is good. A player hitting .400 is great. But even the great player fails to hit 60% of the time! Remember, you don’t have to be perfect to win in the markets. Practically speaking, this is why you also need an objective money management system.

5. The Mental Fortitude to Accept Huge Gains

To win the game, make sure that you understand why you’re in it. The big moves in markets come only once or twice a year. Those are the ones that will pay you for all the work, fear, sweat and aggravation of the previous 11 months or even 11 years. Don’t miss them for reasons other than those required by your objectively defined method. Don’t let yourself unconsciously define your normal range of profit and loss. If you do, when the big trade finally comes along, you will lack the self-esteem to take all it promises. By doing so, you abandon both method and discipline.

So who was the all-time real-money profit record holder who turned in a 444.4% return in a four-month period in 1984?
Answer: Robert Prechter ... and throughout the contest he stuck to his preferred method of analysis, the Wave Principle.

From
http://www.financialsense.com/Experts/ewave/2009/0807.html

Friday, August 21, 2009

NIFTY IN RECTANGLE


--NIFTY IN RECTANGLE.

---BREAKOUT WILL BE GOOD TRADING OPPORTUNITY.

Thursday, August 20, 2009

CUES FOR AUGUST 20


----for details of the waves understanding visit Ilango's blog at http://tradeinniftyonly.blogspot.com/search?updated-max=2009-08-19T09%3A21%3A00%2B05%3A30&max-results=3

********POSITIONAL STRATEGY--
---Ideal Strategy- NEUTRAL.
---Do not hold long if closes below-4367.
--- Do not hold short if closes above -4516.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future discount increased to 8 points so cost of carry decreased. (Bearish)
--Nifty open interest increased by 18 lacs suggests short addition. (Total OI now at 2.72 cr)
--Nifty calls added 21 lacs and puts added 16 lacs in open interest. (Bearish)
--Nifty open interest put-call ratio is at 0.97.
--4300 puts had open interest of 54 lacs (+7%) and 4500 calls had open interest of 41 lacs (+18%), so 4300 and 4500 will be important levels to watch for.
--India VIX closed at 40.21, decreased by 11% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 8/42. (Bearish)

Tuesday, August 18, 2009

cues for august 19


********POSITIONAL STRATEGY

-----Ideal Strategy- NEUTRAL.

---Do not hold long if closes below-4436.

--- Do not hold short if closes above -4563.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html

---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future discount decreased to 4 points so cost of carry increased. (Bullish)
--Nifty open interest decreased by 3 lacs suggests short covering. (Total OI now at 2.54 cr)
--Nifty calls shed 0.6 lacs and puts added 24 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 0.98.
--4400 puts had open interest of 40 lacs (+17%) and 4500 calls had open interest of 35 lacs (-6%), so 4400 and 4500 will be important levels to watch for.
--India VIX closed at 45.04, decreased by 3% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 39/11. (Bullish)

nifty in triangle



---nifty in triangle.

--trade the breakout.

CUES FOR AUGUST 18

********POSITIONAL STRATEGY--

---Ideal Strategy- NEUTRAL.
---Do not hold long if closes below-4464.
--- Do not hold short if closes above -4604.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future discount increased to 15 points so cost of carry decreased. (Bearish)
--Nifty open interest increased by 26 lacs suggests short addition. (Total OI now at 2.57 cr)
--Nifty calls added 58 lacs and puts added 17 lacs in open interest. (Bearish)
--Nifty open interest put-call ratio is at 0.93.
--4300 puts had open interest of 42 lacs (+10%) and 4500 calls had open interest of 37 lacs (+90%), so 4300 and 4500 will be important levels to watch for.
--India VIX closed at 46.49, increased by 5% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 00/50. (Bearish)

Sunday, August 16, 2009

CUES FOR AUGUST 17

********POSITIONAL STRATEGY--

---Ideal Strategy- INITIATE LONG.
---Do not hold long if closes below-4459.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future premium converted into discount of 5 points so cost of carry decreased. (Bearish)
--Nifty open interest decreased by 8 lacs suggests long unwinding. (Total OI now at 2.31 cr)
--Nifty calls added 10 lacs and puts added 4 lacs in open interest. (Bearish)
--Nifty open interest put-call ratio is at 1.01.
--4500 puts had open interest of 35 lacs (-0.6%) and 4700 calls had open interest of 43 lacs (+1%), so 4500 and 4700 will be important levels to watch for.
--India VIX closed at 44.24, increased by 3% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 14/36. (Bearish)


Friday, August 14, 2009

CUES FOR AUGUST 14

********POSITIONAL STRATEGY--

---Ideal Strategy- NEUTRAL.
---Do not hold long if closes below-4406.
--- Do not hold short if closes above -4533.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future premium increased to 6 points so cost of carry increased. (Bullish)
--Nifty open interest decreased by 10 lacs suggests short covering. (Total OI now at 2.39 cr)
--4500 puts had open interest of 37 lacs (+44%) and 4700 calls had open interest of 42 lacs (+9%), so 4500 and 4700 will be important levels to watch for.
--India VIX closed at 42.80, increased by 0.7% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 50/00. (Bullish)

Thursday, August 13, 2009

CUES FOR AUGUST 13

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD SHORT.
--- Do not hold short if closes above -4516.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future discount converted in to premium of 3 points so cost of carry increased. (Bullish)
--Nifty open interest increased by 6 lacs suggests long addition. (Total OI now at 2.49 cr)
--Nifty calls added 16.5 lacs and puts added 17.5 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 0.92.
--4400 puts had open interest of 37 lacs (+0.24%) and 4600 calls had open interest of 32 lacs (-2%), so 4400 and 4600 will be important levels to watch for.
--India VIX closed at 42.52, increased by 11% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 23/27. (Bearish)

Wednesday, August 12, 2009

CUES FOR AUGUST 12


********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD SHORT.
--- Do not hold short if closes above -4555.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
---The positional strategy is based on my mechanical trading system.

********CUES--

--Nifty August future discount decreased to 7 points so cost of carry increased. (Bullish)
--Nifty open interest decreased by 6 lacs suggests short covering. (Total OI now at 2.43 cr)
--Nifty calls added 4.6 lacs and puts added 24 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 0.91.
--4400 puts had open interest of 37 lacs (+18%) and 4600 calls had open interest of 33 lacs (+5%), so 4400 and 4600 will be important levels to watch for.
--India VIX closed at 38.20, increased by just 0.03% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 34/16. (Bullish)

Monday, August 10, 2009

CUES FOR AUGUST 11

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD SHORT.
--- Do not hold short if closes above -4624.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html
********CUES--

--Nifty August future discount increased to 12 points so cost of carry decreased. (Bearish)
--Nifty open interest increased by 10 lacs suggests short addition. (Total OI now at 2.49 cr)
--Nifty calls added 21 lacs and puts added 2 lacs in open interest. (Bearish)
--Nifty open interest put-call ratio is at 0.86.
--4400 puts had open interest of 31 lacs (+14%) and 4600 calls had open interest of 31 lacs (+11%), so 4400 and 4600 will be important levels to watch for.
--India VIX closed at 38.19, decreased by 6% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 13/37. (Bearish)

Sunday, August 9, 2009

SWINE FLU (H1N1 FLU) UPDATE

What is H1N1 (swine flu)?
H1N1 (referred to as “swine flu” early on) is a new influenza virus causing illness in people. This new virus was first detected in people in the United States in April 2009.
This virus is spreading from person-to-person worldwide, probably in much the same way that regular seasonal influenza viruses spread.
On June 11, 2009, the World Health Organization (WHO) signaled that a pandemic of novel H1N1 flu was underway.
Why is novel H1N1 virus sometimes called “swine flu”?
This virus was originally referred to as “swine flu” because laboratory testing showed that many of the genes in this new virus were very similar to influenza viruses that normally occur in pigs (swine) in North America.
Is H1N1 virus contagious?
CDC has determined that novel H1N1 virus is contagious and is spreading from human to human.
How does novel H1N1 virus spread?
Spread of novel H1N1 virus is thought to occur in the same way that seasonal flu spreads.
Flu viruses are spread mainly from person to person through coughing or sneezing by people with influenza.
Sometimes people may become infected by touching something – such as a surface or object – with flu viruses on it and then touching their mouth or nose.
What are the signs and symptoms of this virus in people?
The symptoms of novel H1N1 flu virus in people include fever, cough, sore throat, runny or stuffy nose, body aches, headache, chills and fatigue.
A significant number of people who have been infected with this virus also have reported diarrhea and vomiting.
Severe illnesses and death has occurred as a result of illness associated with this virus.
How severe is illness associated with H1N1 flu virus?
Illness with the new H1N1 virus has ranged from mild to severe. While most people who have been sick have recovered without needing medical treatment, hospitalizations and deaths from infection with this virus have occurred.
How long can an infected person spread this virus to others?
People infected with seasonal and novel H1N1 flu shed virus and may be able to infect others from 1 day before getting sick to 5 to 7 days after. This can be longer in some people, especially children and people with weakened immune systems and in people infected with the new H1N1 virus.
What can I do to protect myself from getting sick?
There is no vaccine available right now to protect against novel H1N1 virus.
Take these everyday steps to protect your health:
Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash after you use it.
Wash your hands often with soap and water, especially after you cough or sneeze.
Avoid touching your eyes, nose or mouth. Germs spread this way.
Try to avoid close contact with sick people.
If you are sick with flu-like illness, you stay home for 24 hours except to get medical care or for other necessities. (Your fever should be gone without the use of a fever-reducing medicine.) Keep away from others as much as possible to keep from making others sick.
If you become ill and experience any of the following warning signs, seek emergency medical care.
**In children, emergency warning signs that need urgent medical attention include:
Fast breathing or trouble breathing
Bluish or gray skin color
Not drinking enough fluids
Severe or persistent vomiting
Not waking up or not interacting
Being so irritable that the child does not want to be held
Flu-like symptoms improve but then return with fever and worse cough
**In adults, emergency warning signs that need urgent medical attention include:
Difficulty breathing or shortness of breath
Pain or pressure in the chest or abdomen
Sudden dizziness
Confusion
Severe or persistent vomiting
Flu-like symptoms improve but then return with fever and worse cough
Are there medicines to treat novel H1N1 infection?
Yes. CDC recommends the use of oseltamivir(Tamiflu) or zanamivir for the treatment and/or prevention of infection with novel H1N1 flu virus. Antiviral drugs are prescription medicines (pills, liquid or an inhaled powder) that fight against the flu by keeping flu viruses from reproducing in your body.

for other details visit http://www.nlm.nih.gov/medlineplus/tutorials/h1n1flu/htm/_no_50_no_0.htm

---Dr.Jignesh Shah M.D.(gyn)

Joint Secretary,

Ahmedabad Medical Association.

Friday, August 7, 2009

CUES FOR AUGUST 7

********POSITIONAL STRATEGY--

---Ideal Strategy- NEUTRAL.

********CUES--

--Nifty August future premium converted in to discount of 7 points so cost of carry decreased. (Bearish)
--Nifty open interest decreased by 7 lacs suggests long unwinding. (Total OI now at 2.31 cr)
--Nifty calls added 25 lacs and puts added 1 lacs in open interest. (Bearish)
--Nifty open interest put-call ratio is at 0.98.
--4300 puts had open interest of 28 lacs and 4700 calls had open interest of 37 lacs, so 4300 and 4700 will be important levels to watch for.
--India VIX closed at 37.65, increased by 3% suggests instability. (Bearish)
--In Nifty stocks, advance-decline ratio is at 6/44. (Bearish)

Thursday, August 6, 2009

CUES FOR AUGUST 6


********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4630.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html

********CUES--

--Nifty August future discount converted in to premium of 11 points so cost of carry increased. (Bullish)
--Nifty open interest decreased by 9 lacs suggests long addition. (Total OI now at 2.38 cr)
--Nifty calls added 11 lacs and puts added 17 lacs in open interest. (Bullish)
--Nifty open interest put-call ratio is at 1.06.
--4600 puts had open interest of 29 lacs and 4700 calls had open interest of 34 lacs, so 4600 and 4700 will be important levels to watch for.
--India VIX closed at 36.7, decreased by 0.3% suggests stability. (Bullish)
--In Nifty stocks, advance-decline ratio is at 22/28. (Bearish)

Wednesday, August 5, 2009

CUES FOR AUGUST 5

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4611.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html

********CUES--

--Nifty August future premium converted in to discount of 1 points so cost of carry decreased. –Bearish--
--Nifty open interest decreased by 17 lacs suggests long unwinding. (Total OI now at 2.29 cr)
--Nifty calls added 9 lacs and puts added 23 lacs in open interest. –Bullish--
--Nifty open interest put-call ratio is at 1.04.
--4600 puts had open interest of 28 lacs and 4700 calls had open interest of 31 lacs, so 4600 and 4700 will be important levels to watch for.
--India VIX closed at 36.8, decreased by 9% suggests stability. –Bullish--

Tuesday, August 4, 2009

NEGATIVE DIVERGENCE

--negative divergence in RSI and MACD in 5 minute charts.
--partial profit booking advisable in all your long positions.

CUES FOR AUGUST 4

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4555.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html

********CUES--

--Nifty August future discount converted in to premium of 3 points so cost of carry increased.
--Nifty open interest increased by 6 lacs suggests long addition. (Total OI now at 2.46 cr)
--Nifty calls added 9 lacs and puts added 12 lacs in open interest.
--Nifty open interest put-call ratio is at 1.01.
--4500 puts had open interest of 24 lacs and 5000 calls had open interest of 20 lacs, so 4500 and 5000 will be important levels to watch for.
--India VIX closed at 40.65, increased by 3% suggests instability.

Monday, August 3, 2009

SIX MONTHS OF E-MAIL SERVICE

Dear viewers,
My E-mail service had completed six months successfully.
To celebrate it, charges for 30 days is reduced at Rs.750.
This will be applicable for next three days.
For further details visit http://niftydoctor.blogspot.com/2009/03/e-mail-news-letter-service.html
To see calls performance visit http://niftydoctor-calls.blogspot.com/
With regards.
-niftydoctor.

Sunday, August 2, 2009

CUES FOR AUGUST 3

********POSITIONAL STRATEGY--

---Ideal Strategy- HOLD LONG.
---Do not hold long if closes below-4489.

--- Visit the page to understand how to implement positional strategy during trading hours……….. http://niftydoctor.blogspot.com/2009/04/opening-range-breakout.html

********CUES--

--Nifty August future premium converted in to discount of 0.4 points so cost of carry decreased.
--Nifty open interest increased by 10 lacs suggests short addition. (Total OI now at 2.40 cr)
--Nifty calls added 11 lacs and puts added 19 lacs in open interest.
--Nifty open interest put-call ratio is at 0.98.
--4500 puts had open interest of 22 lacs and 4700 calls had open interest of 32 lacs, so 4500 and 4700 will be important levels to watch for.
--India VIX closed at 39.21, increased by 4% suggests instability.