Some firecrackers in the US markets last night. A quick look at the charts tell me that it was high frequency trading which carried the market all the way up from 1043 to 1059.Only Buyers.
We got a gap.And we are near 5320 levels again.I posted a chart yesterday of an auction between 5272 and 5320 being important for the market today. Let’s see how it pans out.
On another note, I want to stress to my readers the importance of inter-market analysis in your study. The header of this blog mentions it as a study of market profile and inter market relationships.If you have to make serious money in this market, you have to develop the edge in identifying the movement of ‘hot money’ through other foreign markets, commodities, bonds and currencies.So far I have kept it to the US markets, but we will soon involve the rest for getting a better picture.
I’ve stayed away from doing a lot of trading today. The gap up ensured that the market belonged only to scalpers this morning, quick to run away with a 10-15 point gain.
5339 has been the high of the day, very close to the level of 5344 we have been watching.An argument can be made for a trade both ways: a) Trend is up as long as 5225 holds or b) trend is down till 5367 is not taken out.
The fact that we have sold aggressively from these levels as also the up-down moves of over 80 points each, make this a treacherous market to trade.
We have done intra-day trades on the blog so far.On days like today, where the market didn’t give much confidence for a trade either way, I felt the need to put a system in place which will work for us regardless of gaps, other markets etc.
So I dusted some old notes and have managed to put something together for a positional set-up based on MP levels.
I have put it across to Viren for his views and we will run the trades here live on the blog.They are basically swing trade set-ups with a stop and reverse system ensuring that we will always be in a trade.I figure that the trades will run between 2-7 days duration. Once it works with the Nifty, we’ll bring the Bank Nifty as well.
I hope to foster a better understanding of market profile through this.
Once we put up a few trades, I look forward to your comments towards the same.
I’ve found a name for it too !! A.I.A.T –always in a trade. how’s that?