Where are the Markets Headed Next? How to handle the Volatility

BankNifty Futures: 18th was a copybook trading day and fortunately we were on the right side of the trade as well. check our pre trade analysis at (https://www.facebook.com/powertrade.trading/)

This can be primarily be attributed to conviction in the plan as much as right analysis for the plan. Why did we mention that 17140 is a key zone?( we know the market reaction once that was breached)

If you check the hourly candles there were multiple instances when that was respected and it was building up supply there. beyond that we saw a straight dash to 16900, to be honest the ease with each was broken was surprising.

BankNifty Futures Price Chart Analysis

Now whats next?  The new Trend decider now is 16940-50 levels if you observe the charts.  until we manage to hold or trade below it pull backs on intraday basis can be shorted.  Downside targets can be near 16650 or lower. It will be key to observe whether the breach today was an aberation or a build up of new trend. Hence prudent would be to see how that level is treated. If markets moves and holds above it can give a good pull back trading opportunity to the contrarian players. 

NIFTY Futures: Just yesterday we discussed that 7850 continues be the achillies for NIFTY and until convincingly taken out we are not going to see aconclusive breakout. On the downside we discussed a break of 7820 can provide a low risk trade and what a trade it was , a trade which yielded nearly 80-100 points with a 30-40 points risk.  now that NIFTY has breached 7800, 7780-7800  range will be the trend decider. If markets sustain above it expect a reversal in trends.Below it markets will continue to trade in the direction that has emerged today. 7850 will be a tough swing hurdle going forward. A break above it will only signal a resumption for the bulls

Basics of a successful trading strategy and plan. Planned approach to becoming a winning trader

Successful trading at times is simplified process of few steps.  While the markets will remain volatile at times frustrating in a range at times defying any sense of movement  and at times react crazy to news based movements. This is the nature of the market and will remain so. This is something we cant control or alter.

What we can do is have our basics of a successful trading correct and stick to it in a disciplined manner.    

There are two high level components to a good trading 1. Have the right plan in place 2. Stick to the plan.

 In details the steps are as follows:

Lets discsuss the steps in details Now:

1.    Identify: This is the first step to identify a potential winning set up, scan charts to see repetative patterns

2.    Define: Define the buy sell logic in simple terms. At times this is the most difficunt stage as we try to keep changing this at early stages

3.    Develop: Develop the strategy if you can in any trading software

4.    Backtest: Back test the strategy to see if its profitable in various market conditions

5.    Disciplined Trading: Now once you have decided the strategy just stick to the plan and execute as per it. Give your strategy a good time to trade in real market conditions. Don’t be frustrated or over joyed in the short run

6.    Review: Review and refine in  a periodic basis if needed. But we recommend at least a quarter trading to even decide if a strategy needs refining.

 

Not all steps are easy to be done by a trader at all levels and at times we don’t have the money to try out strategies.This is where the system based solutions from powertrade come in. we provide the in depth expertise and suport to help you with the first 4 steps. Rest 2 is simply followed by the trader and eventally makes the difference between a winning and a losing trader.

Powertrade has developed advanced algorthim based solutions which have now a proven success record over varying market conditions.

Our smartsignals trading signals gives the trader an edge over others and makes a key difference. Smartsignals have outperformed the market in a consistent basis over the long run.

 

Let us review how our trading signals have performed:

 

Underlying: BankNifty Futures

Traded Quantity: 2 Lots

Start Date: Jan-2012

Start Capital: 1 Lacs

Current Capital: 3,74,100 INR

Returns On 100 INR Invested in the Index versus Traded with the system

If we look at the systems performance one thing is evident that the returns were not achieved in a magic but through disciplined trading for months. You follow smartsignals or not but that is the essence of a winning trader, to be able to stick to the plan.