Trading Lessons
TRP
Trading by Trend Reversal Points(TRPs) on Nifty Futures
The quest to find the right tool to trade began eversince the trading history.There are millions of tools available in the market claiming their credence.While some uses mathematical equations others use chart patterns to astrology and a host of other signs or a combination of many.Is there a 100% safe Trading system ? ..the answer is NO.
While many systems attempts to attain a safer trade using different strategies and a combination of signals to forecast the market direction,here is a system which uses simple mathematical percentage calculations to find out the most probable trend reversal point ,by following the market.
“Market is the King, don’t try to fight with him,but follow him”
WHY ONLY NIFTY?
Why we are suggesting to trade only in Nifty?
The question one should ask yourself should be “Are you a trader or an Investor?”I f you are an investor,you neednt be here.This place is not for you.Investing in fundamentally strong companies should be your forte.
If you are a trader,you have the choice of trading in a number of stocks,track each one of them individually and live in tension.Individual stock prices can even be manipulated by operators,but not nifty.
Ask any experienced trader in the market,and they will vouch for nifty as the safest bet to trade.Minimum loss and good returns.You also have the choice of trading next months futures for position or even you could trade in options.
Trading by TRP gets rid of one of the biggest evils of trading….your emotions.Here exact entry and exits are conveyed as the market progresses and never forecasted.
HOW TO TRADE
How to Trade by Trend Reversal Points(TRP)
The two figures shown-daily and intra are calculated corresponding to data received from End of Day charts and intra-day.In simple terms use the daily figure to do positional trades and intra day for day trades.
ALL VALUES SHOWN CORRESPONDS TO NIFTY FUTURES VALUE.
Positional Trades
Go long when nifty futures crosses and closes for the day( EOD) above the TRP and vice versa for shorts.
Day Trades
For intra day the 30 minute closing price of nifty futures is considered for the calculation.
Therefore go long when the price closes above the intra day TRP and vice versa for short.
A trade should be initiated only when the trend changes.. ie from positive to negative or from negative to positive .
Book half of your holdings when you get 20-25 points and carry the rest till the trend changes or till 3.25 pm .
Always book your position at the end of the day and sleep peacefully.Markets will always give you fresh opportunities.
High risk traders can initiate a trade in the early hours of trading day,if the nifty futures price comes closer to TRP ,say with 20-25 points and be quick to take profits as intra day whipsaws might show false trends.Again book half the quatity for 20-25 points profit to avoid loss.
Low risk Traders and New Traders avoid early morning trades and wait for a clear crossover of TRP.There could be days when no trade is done..but a winning trade is better than two losing trades.
Watch the commentary box for live updates and comments..you could also put forward your queries through the chat room,during market hours.
ENTRY POINT
When to initiate a trade?
Day Traders-Initiate a trade only on a crossover of TRP and closing above for long and below for short. However high risk traders can take a trade in the opening hours if nifty opens near to the TRP by keeping a strict SL.
STOP LOSS
How to Keep a Stop Loss?
Day Traders-when the trade is initiated again the logical SL is only on a 30 minute closing basis.But if you are risk averse you could keep an SL of 25 points,though this is not logical.Book half of your position when you get 25 points in profit to reduce any loss.Once nifty moves away from TRP by 30 points and constantly closing above that level ,the SL could be moved to TRP and trail the trade till the trend reverses or till the end of the day.The TRP will keep advancing every 30 minutes as the market moves.
When markets reverses the direction and hits the SL at TRP ,boldly reverse the trade.
Watch the market commentary on home page for live updates.
TARGETS
Projecting a target is like astrological predictions.It may or may not happen.The only scientific method to calculate targets is by using Fibonacci equations.Fibonacci again projects different levels,so the question again is which level to book? target 1,2,3?
This is where your emotion plays the very important factor. Depending on the bullishness/the bearishness of your emotions or the people around you and media you take the decision,often wrong.
Here we dont have targets.We go with the flow of the market.When it turns we reverses as well,and the markets tell us when to book and when to reverse.Follow the market and money will follow your way and our back testing and experience have given us fantastic results.
We are not making any claim.See for yourself.Do paper trade for sometime to get the confidence.
A Gem a day
To execute your trades properly, you need a strong sense of confidence. Meaning, a distinct lack of fear. Understand, that the markets (your analysis) will not give you this sense of confidence if you haven’t learned how to think in probabilities first. In fact, you will find just the opposite is true. If you haven’t learned how to think in probabilities, the better the analyst you are, the less successful you will be as a trader. To execute your trades properly, you have to get to the point where you are completely comfortable operating in a state of “not having to know” what will happen next.When you’ve mastered the skill of being able to maintain your sense of confidence, while simultaneously “not having to know,” you will be in the best state of mind to perceive what the market is making available to you from it’s perspective, and also execute your trades flawlessly. When you get to the point in your development where you can execute your trades flawlessly, that is when the full potential of your analytical abilities will come to bear on your bottom line results.