How It Works?
The Daily + triangle is created whenever a market moves over the previous three day high and remains above the previous three day low. The reverse is true when the low of the previous three days is broken to the downside, it creates a - Triangle. This is an automatic stop-out of a long position if the Weekly Triangle (4th signal from top) is +. If the Weekly Triangle is -, it signals a short sale is in order.
Now let us analyse Nifty future on the basis of Trade Triangle again:
Based on a pre-defined weighted trend formula for chart analysis, Nifty future scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend). It means an uptrend is in place. Intraday, intermediate and long-term trends are pointing in a positive direction, while the short-term trend is in a downward direction.
// +10 Last Hour Close above 5 hour Moving Average
// -15 New 3 Day Low on Thursday
// +20 Last Price Above 20 Day Moving Average
// +25 New 3 Week High, in the current week
// +30 New 3 Month High in September
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// +85 Total Score
So now we can clearly see the Daily and Weekly triangles are opposite to one another, and this indicates that positional traders should be in sidelines mode in Nifty future and re-enter long only when we get new 3 day high. It means for tomorrow, positional longs will be triggered only above 5048, if the high of last 3 days gets broken.
6 Successful Short-Term Trading Rules To Follow:
1) The odds are in your favor when you trade with the major trend.
2) Always trade using stops. Never cancel a stop.
3) Plan your trade and trade your plan.
4) Never try to pick tops or bottoms, the market may surprise you.
5) Go with the flow. Don’t fight the markets.
6) Last but not the least - don't try to predict the market.
Special Note - I conduct an one day web-workshop held on every Saturdays on "TRADING FOR A LIVING" where I discuss some of the high probability trade setups for intraday or swing trading in Index futures or stocks. For registration and enquiry about the workshop please see more in this page or do call me at 9432883838 or mail me at stockmaniacs@ymail.com.
1 Comments:
Hi Sir,
Thank you again for the insights and the methodologies you have been providing to all of us. Every article is well compiled and just helps us better in our understanding. Few Questions on Trade Triange Methodlogy:
1. What score do we assign for a triangle when its neither a 3 day high nor a Low but somewhere in between/ or do we take the recent of high or low made?
2. Does it imply one doesnt create a positional short/ long until we have a score of -100/+100 respectively only?
3. Since the scores are generated post the moves we may tend to enter a short late enough to gain an advantage similarly create a long once highs are made. Or do you think this still holds good a good number of times?
regards,
santoshree ray
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