These charts, which should be updated daily, are helpful in entering high probability trades. Traders should be alert as significant resistances and supports are reached, particularly in a range boun bound scenario, to take take the the retest trades. trades. Some practical advice: while these signals are quite reliable, markets do not move according to any given script. Try to go long at least above an intraday pivot on the upside, or short at least under an intraday pivot on the downside. Sometimes markets gives whipsaws before taking a particular direction. At other times, the market starts moving in a narrow range before revealing its direction. Every trader has seen the market apparently in a downtrend in the morning, then suddenly turn course and end up with a healthy gain. This is one of the reasons traders should never have strong opinions; because the the market as well wel l as other other traders do not care about about you ourr opinion. opinion. If the the market goes contrary to your analysis, change your analysis and your trade. Look at a trading day as akin to finding your way through a thick forest. You need to make this journey daily, and every evening you need to prepare maps according to what you expect expect the route route the the next ext day may be. But if your your map does not ork, and you find you are heading the wrong way, you must quickly change your course. When the market does not behave as you expect it to, do as the market tells you to do. Keep losses small till you figure out what the market is doing, but do not overtrade. I start out with the map. If I believe the market is in a downtrend, I wait for the market to make some sort of an intraday high. This can be achieved by: 1. Having all the the supports and resistance res istance marked marked on the the int i ntrada raday y chart,and chart,and 2. Using th the slow sl ow stoch s tochastic astic,, the the fast stochastic and the the 20-peri 20-pe riod od moving moving average aver age to try try to sell an intraday intrad ay high. high. You sell when both the stochastics reach overbought and then you sell the first black candle from the top. Sometimes that is not the top, so I use at least a one per cent stop to make sure that I differentiate any noise from an upmove. Also, you need to be watching the intraday chart all the time if the daily time frame is your canvas, like it is for most traders. For a while the index or stock might behave behave as you anticipated, anticipated, but but you you need to chan chang ge stance stance as soon as you you see thing thingss chang changing. ing. One way of keeping a tab is to keep watching the intraday advance decline ratio: this is available on the Yahoo India Finance section. Generally, it is safe to trade in the direction of the advance decline ratio. If the number of decliners are more on a certain day, then you are fine being short; if the number of advancers are more, you are safe being long. When this ratio starts changing from 5:1 and heads towards 1:1, the market is changing direction. Also, learn to differentiate between intraday boun bounces and genu genuine ine upm upmoves. oves. One One rule of doing doing so is that that after after an intraday intraday bou bounce, the the market market shou should ld come down with velocity. If, on the other hand, the market starts consolidating at higher levels, you need to move out of shorts. If breadth also stalls at that point, then something is certainly changing. So you need to keep looking for evidence to make sure that you are in sync with the market. Will you always be successful? No. If you are not successful, keep a stop in place and re-evaluate if you are rong. You need to be on your toes in any market. Expect the punch coming from the left hook or right hook. Do not be surprised or shocked by any market move. Act quickly to fall in line with the market. Do not expect or hope the market will move in sync with you.
