BIG PICTURE ANALYSIS
Yesterday prices have traded in a channel and in late hours, prices has broken the upper trading channel line. Today prices Opened within previous days range near PDC. I expected the prices to trade within new price channel.
ACTUAL TRADE
Trade 1 -
Candle 1 - Prices opened within previous day range. Nifty Sold out and closed below PDC and near PDL.
Candle 2 - Prices closed below PDL near Lower Channel Line.
Candle 9 - Candle made a Swing Low after BO. Decided to go long on break of this swing low.
Candle 19 - Enter Short on break of the Swing Low after PDL BO.
Candle 20 - Covered the position at breakeven as later i was not sure that prices will breach the Channel low. after exit prices breaches the lower channel trend line. and found support at BRN as i expected earlier.
Trade 2 -
Candle 30 - Prices made another pullback to the swing low of candle 9. Entered short again in the expectations that BRN level will be tested again. Ignored that prices has found support on Lower Trend line of channel on candle 29.
Candle 31 - SL hit and stopped out with small loss.
Trade 3 -
Prices traded in the tight trading range quite a long time. I expected to enter short on the confirm break of BRN and decided to enter on the weak pullback.
Candle 77 - 84 - Candle BO the BRN and traded near the BRN for sometime. Also it was Trading Channel range High.
Candle 85 and 86 - Prices successfully BO the BRN. Waited for the weak pullback and decided to enter on weak pullback.
Candle 88 - Entered Short with stop loss to candle 83 High.
Prices moved downward and found support again on Lower Trend line of Channel. Decided to wait as i thought lower trend channel line will be broken on second test. But prices move above without re-testing the Lower Trendline of Channel. Moved my SL to breakeven point.
Candle 107 - SL hit. Exit on Breakeven.
Lession Learnt :
(1) When prices are trading in the Channel, Avoid taking any trade and if any trade is taken, then exit when prices found trend channel Upper/Lower lines.
IDLE TRADE
Vikas
ReplyDeleteI don't know how to trade with these channels. It is an entirely new subject for me, so would not be able to comment on it.
URD
Hi Uday
ReplyDeleteThanx for the comment. I happen to found the channel during trading session and drawn it. Later i found prices were respecting the channel high and low trendlines. The subject "channel" is also new to me and i also always try to trade as per decision point methods but deviations came through me when i happen to be trading outside the DP System rules which is why i thought that i need more discipline to stick to the DP System rules while trading in real time.