Analyzing actual Trades - 04 Jun 2009

This morning, I said

Quote

For Traders with a SHORT TERM BEARISH VIEW OF THE MARKET

Go short if Nifty trades below 4470, SL at 4530 or 4575 depending on your risk appetite and position sizing


For Traders with a SHORT TERM BULLISH VIEW OF THE MARKET

Go long around 4490 ( nifty ) with SL 4430. If 4430 breaks, stay away until a dip is clearly visible

Unquote


As it turned out, the first group of traders would have perhaps broken even with a bit of tight management of SL , while the second group would have made a good amount of money.

For myself, I chose to trade with a negative bias, and was a bit more aggressive than I had suggested. Also, for me preservation of capital is of great importance. Hence I try to break even as soon as possible. Here were my actual trades from today.



First Trade:

Time: 10.08 am: Sell Short at 4494.25, Initial ( Mental ) Stop Loss @ 4540
Time: 10.24 am: Nifty at 4484, placed Actual Stop Loss @4512
Time: 10.39 am: Nifty at 4472, moved Stop Loss to 4591 (BREAK EVEN after commission, YES!)
Time: 11.00 am: SL triggered.
No gain no Loss on this trade.

Second Trade: ( still staying with Negative bias )

Time: 11.14 am: Sell Short at 4487 Initial (Mental) Stop Loss @4512
Time: 11.17 am: Nifty at 4493, placed Actual Stop Loss at 4504
Time: 11.27 am: Nifty at 4475, moved Stop Loss to 4485 ( In the Positive , YES!)
Time: 11.36 am: Nifty at 4463, moved Stop Loss to 4474
Time: 11.45 am: Nifty at 4457, REALIZED STRONG RESISTANCE at 4450, moved Stop Loss to 4563
Time: 11.47 am: Stop Loss triggered
Net Gain - 20 points after commission

What happened during the rest of the day? Watched the market recover ground, realized my negative bias is not supported by price action, chose not to participate.

What is the moral? If you have a reasonable strategy, and you stick to it, you have a reasonable chance of getting somewhere even if you misread the market.

Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that day trading is not for the novice and there is significant risk of loss of capital in trading.