Why do you think the markets went up on Friday afternoon only?
Is it because of fundamental or technical reasons?
If you consider technicals, then definitely yes but technicals suggested the upmove much before. But then why the markets continuously slid down to create panic before moving up by 125 points from day's low in the 2nd half only?
Well, if you had gone through my previous post and read the point 'c' mentioned in the last to one paragraph, you will find me mention about the T+5 factor in trading. in most cases the clients take leveraged positions with their brokers and square them off on the 5th day following leveraged positions in cash markets. Thus the debit positions are carried on till the 5th day. In the current case, Nifty hit 4756 on Friday last when most of the retailers took long positions expecting a breakout as the markets has just made a new top. After Friday, it continuosly fell till Thursday and closed at the day's lowest point creating panic. As a result, most traders voluntarily squared their positions on Thursday, otherwise their broker would square them off on Friday (T+5 day). Now, Nifty opened in the green on Friday but immediately went to red and almost made a new low. All this happened within the first 1 hour of trade which was enough for the brokers to square off the debit position at the lowest prices causing maximum losses to their clients. Once this work was done, the technicals came into play. The market was already oversold and the wave was suggesting the upmove towards 4830 on NF. The PCR was hovering around 1.20 suggesting near month put writing. And it happened....Markets started recovering at 12:15 and went up by almost 125 points on the Nifty (almost 2% up from day's low)...
Why I shared this? The simple reason is one should have a broader perspective in trading....Its something more related with very simple things which we tend to neglect....We always keep searching the most difficult ideas but forget to look into the most trivial ones.....
Trading is more about macro ideas than many micro constituents....
Happy Trading !!!
Is it because of fundamental or technical reasons?
If you consider technicals, then definitely yes but technicals suggested the upmove much before. But then why the markets continuously slid down to create panic before moving up by 125 points from day's low in the 2nd half only?
Well, if you had gone through my previous post and read the point 'c' mentioned in the last to one paragraph, you will find me mention about the T+5 factor in trading. in most cases the clients take leveraged positions with their brokers and square them off on the 5th day following leveraged positions in cash markets. Thus the debit positions are carried on till the 5th day. In the current case, Nifty hit 4756 on Friday last when most of the retailers took long positions expecting a breakout as the markets has just made a new top. After Friday, it continuosly fell till Thursday and closed at the day's lowest point creating panic. As a result, most traders voluntarily squared their positions on Thursday, otherwise their broker would square them off on Friday (T+5 day). Now, Nifty opened in the green on Friday but immediately went to red and almost made a new low. All this happened within the first 1 hour of trade which was enough for the brokers to square off the debit position at the lowest prices causing maximum losses to their clients. Once this work was done, the technicals came into play. The market was already oversold and the wave was suggesting the upmove towards 4830 on NF. The PCR was hovering around 1.20 suggesting near month put writing. And it happened....Markets started recovering at 12:15 and went up by almost 125 points on the Nifty (almost 2% up from day's low)...
Why I shared this? The simple reason is one should have a broader perspective in trading....Its something more related with very simple things which we tend to neglect....We always keep searching the most difficult ideas but forget to look into the most trivial ones.....
Trading is more about macro ideas than many micro constituents....
Happy Trading !!!
1 comment:
saptarishida,i am new in this market can you tell me after hitting 4820,what should i do for here now.
thnx
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