Posted by: Babu Suresh | March 5, 2012

5th Mar Nifty Day Trading Session

Glad to see you all.

I can describe today’s session as the day of learning and a reminder not to compromise and forget the basic principles of day trading. I planned well enough anticipating JSWSteel’s fall and was prepared to go in full swing. But exactly I did the wrong thing so blatantly starting with the State Bank Of India, which resulted in not being able to get any trade. What resulted was total waste of time and a good opportunity to close a high value trade in a short time at the opening itself with JSWSTEEL and instead continued with SBIN.  At last got an opportunity at 11 to score 20 points, however, the trade continued for almost an hour before I could make an exit. Trading between 11 and 12 is a real pain in the neck which I solemnly avoid but today knowingly fell for it. It was not market’s fault.

Anyway, everyday there is something to learn. That’s the beauty of day trading and it’s an ongoing process; one cannot come to conclusions one has mastered the art of day trading; its the life in itself. My younger sister told me once, “You can learn about life when you are trading stocks”. She was one of the best traders before she quit to focus on her children. One has to go a long way. Unlike any other businesses, in this business would have been, should have been, could have been find no place.

The reason why I am more interested in using HMA-Bollinger Bands Day Trading System can be interpreted and understood better without much elaboration but from the charts I have attached so far. Be it any system, one has to work with the system to understand the nuances of the system, only then one can utilize some of the best features of the system to the fullest possible extent.

Let me bring into attention few salient features of the HMA-Bollinger Bands Day Trading System.

First, the basic concept of the system:

a. the price should trade clearly above HMA and Bollinger Bands when it is rising and

b. the price should trade clearly below HMA and Bollinger Bands when it is falling

while this is in process, as recommended by some or most of the professional traders, it is advisable to take confirmation from a secondary indicator(s), which in this system I use are Relative Strength Indicator (RSI) and MACD. RSI nicely complements with both HMA and Bollinger Bands while MACD helps identifying strengths and weaknesses in the price.

Secondly, there are times when the price starts zig-zagging on or near the HMA instead of either trading above or below and/or trading in-between HMA and Bollinger Bands, especially in time frames like 15 min. and 30 min. charts but stays the course in the 60 min. chart, its advisable to exercise full caution before taking up a position. There is nothing wrong in going for a trade but the exit plan should be crystal clear else, it will not be an ordinary pain in the neck but an excruciating pain in the sensitive area of our body.

JSWSTEEL

JSW Steel1_050312

STATE BANK OF INDIA (SBIN)

SBIN_050312

Last but not least, distance between HMA and Bollinger Bands is quite important to consider as well and also avoid taking up a position when there is a steep fall or rise in the price, as it happened today with SBIN at the opening.

You will find not only in today’s charts all the instances that I had mentioned above present but in almost all the previous charts as well, be it any instrument.

Its noteworthy to mention at this juncture, when you are visiting any site for trading related information spend time to read the message and if it suits you take it or leave it. I see lots of visitors to my site making a flash visit, spending few seconds. I don’t understand what they are looking for. Even if you see only a chart, there will be a message which may be useful to your trading. By just jumping from one site to another will yield absolutely no result rather it would lead to more pain unless you know what you want, especially when you are conducting this exercise after a bad day.

The whole purpose and objective of this site or blog is that I take time to express my trading methodology which I find to be useful to me first, when I refer back any time. If it is useful to others, well and good.

Healthy And Wealthy Trading

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