[DigitalOne]

Originally Posted by SmartCat

Another idea would be to hedge your portfolio by buying NIFTY put options of December on 1st January of each year. For eg: if your equity portfolio is Rs. 1 cr, buy 10 lots December 2023 15000 PE (20% away from where we are). You will have to spend around Rs. 70k for buying put options or 0.7% of your equity portfolio value. Think of this as a black swan insurance policy.

Can you elaborate a bit here? I have considerable investments in equity but all in MFs and Nifty ETFs. How do I go about buying Nifty Put options (via ICICIDirect, if possible) ?

[SmartCat]

Originally Posted by DigitalOne

Can you elaborate a bit here? I have considerable investments in equity but all in MFs and Nifty ETFs. How do I go about buying Nifty Put options (via ICICIDirect, if possible) ?

Before that, how familiar are you with options? Have you ever traded options? And yes, you can use ICICIDirect.

Meanwhile, read up on 'portfolio insurance' (google the phrase) to get an overall idea
https://www.investopedia.com/terms/p...oinsurance.asp

[thirugata]

Gold is approaching the resistance area and the momentum is reducing. So it might consolidate or retrace a bit from here.



Smallcap 100 index has reached a critical point. A breakout could potentially give a big move. But looking at the currently market scenario it looks like a lower probability.

[DigitalOne]

Originally Posted by SmartCat

Before that, how familiar are you with options? Have you ever traded options? And yes, you can use ICICIDirect.

Meanwhile, read up on 'portfolio insurance' (google the phrase) to get an overall idea

Thanks!! I went through few articles, Youtube videos and understood the concept. But finally decided it is not my cup of chai for now, and I will de-risk using the old-fashioned asset allocation way.

Also haven't the markets already priced in an oncoming recession/low growth phase? Somehow I don't expect a huge crash in the market. Of course this could also be my optimism bias talking .

[deetee]

Nifty index is poised for a break down the consolidation range. Like everyone I also thought the dull swings will last till the budget, but looks like a direction is emerging before that. Given the momentum and close of the 25th candle, if friday (27th) session breaks down the range, that's clear indication of direction. This being a third attempt at breaching down the support, if this attack fails and Nifty manages to break out above 18200, we can see a new ATH beyond 19k. Friday will be an interesting session. If it closes below the range, then a possible target before the budget is 17550. If it doesn't break down and stays within the range, another 3 more days of dull action can be expected. But given the kind of consolidation that already happened, and momentum of the index, there is more probability for a decider on Friday itself.

[deetee]

Nifty has a strong crucial support around 17300 levels. Two key trend lines as shown in the figure are jointly creating a support level. It is holding now. If there is strong bounce here, index may see new ATH. If this support breaks, there is further downside awaiting.

[thirugata]

Originally Posted by deetee

Nifty has a strong crucial support around 17300 levels. Two key trend lines as shown in the figure are jointly creating a support level. It is holding now. If there is strong bounce here, index may see new ATH. If this support breaks, there is further downside awaiting.
Attachment 2414014

Weekly candle is sandwiched between 20 and 50 weekly SMA. IMHO big move is expected only once the last weeks range (Basically budget day range) is taken out. Unless there is further bad news or some good news to change the market sentiment we may see some sideways movement inside this range.

[deetee]

Originally Posted by thirugata

Weekly candle is sandwiched between 20 and 50 weekly SMA.

Agree that. One other observation is that this bounce didn't exactly come from the 50 weekly SMA. But I get your point. Unless one of them is broken, index may play in between gathering momentum to break either of them.

Originally Posted by thirugata

IMHO big move is expected only once the last weeks range (Basically budget day range) is taken out. Unless there is further bad news or some good news to change the market sentiment we may see some sideways movement inside this range.

One thing very clear with the index chart is that, there are lot of significant supports below 18400. If index has to break down those multiple supports (spaced closely) , it may happen in two ways.

1.) Divide and rule : Index will show a few wide range up and down moves until the supports space out giving a chance of breaking them one after another.
2.) Take them out all : Index will show tight range movements such that the supports get spaced tighter and closer and then take them out with one big strong move or gap down below the supports.

Why I am biased about downmoves here?? Why don't I think index will rally now?
1. Last week candle, even though it is coming at a support and with very good volume, it failed to close beyond 50% of the previous bearish weekly candle. A close beyond 50% of that candle body could have been a confident reversal and precursor to rally. But this candle looks more like a bullish last stand to hold downward momentum. If this candle's opening is broken by next weekend then this bullish move gets invalidated and a strong bearish case gets established. Picture attached:


2. From another perspective, for 5 weeks since December end, Index played out in a 400 point range, including two doji candles. That is a significant consolidation and then followed by a break down. Now the green candle of last week looks like a test of that consolidation range.

To conclude, the net bias is towards a downmove but as you also mentioned, if the next week manages to close above this candle , 18k to be precise, then we have a case for new rally in the index. At this stage, I don't think there will be lot of sideways movement (given that we already had 5 such weekly candles recently). Next week may be a decider is what I strongly believe.

[thirugata]

Originally Posted by deetee

To conclude, the net bias is towards a downmove but as you also mentioned, if the next week manages to close above this candle , 18k to be precise, then we have a case for new rally in the index. At this stage, I don't think there will be lot of sideways movement (given that we already had 5 such weekly candles recently). Next week may be a decider is what I strongly believe.

I am not bullish either, bullish scenario gets priority 3 for me in current scenario.
IF we go by simple dow theory of higher high and higher low, the latest higher high is not a significant high from previous high. (Marked in while line). But generally these highs and lows come in set of 3 , here we have 2 higher highs and 2 higher lows (marked in yellow). In truncated trends it stops at 2 set and does not complete the 3rd one. So in my opinion if the previous higher low 16747 gets taken out, we will see the higher low ie (in larger wave form) 15183 will also go.

[deetee]

Originally Posted by thirugata

So in my opinion if the previous higher low 16747 gets taken out, we will see the higher low ie (in larger wave form) 15183 will also go.

[/ATTACH]

That I absolutely agree. If 16747 gets taken out, it will be a steady downtrend after that. Eventually, the 11k-12k level I mentioned sometime back can be longterm downmove target. But before that this confluence of supports at 17300 area needs to go. Will be interesting to see what happens in next few weeks.

[Mustang_Boss]

Originally Posted by thirugata

I am not bullish either, bullish scenario gets priority 3 for me in current scenario.

Could you please recommend me on how these technical analysis is done on charts? i tried but nothing worked. Often these could be projected in both directions with the data..

Any suggestions are highly appreciated. Thank you.

[thirugata]

Originally Posted by Mustang_Boss

Could you please recommend me on how these technical analysis is done on charts? i tried but nothing worked. Often these could be projected in both directions with the data..

Any suggestions are highly appreciated. Thank you.

Technical analysis basically identifying repeatable patterns/ behavior using indicators or just candles (virgin price action).
In technical analysis it is very important to know when do you say your analysis is wrong ie stop loss level; so being open to an opposite view is important.
Yes you are right, different indicators give different directional views and some times contradictory to each other. So the way I look at it is what is the probability of each of those views happening and decide on my action. Again this judgment comes with observation and experience of chart analysis.
If you are keen on learning, learn different kind of indicators like moving avg, MACD, RSI, pivots or whatever of your choice. But try out one thing at a time to understand how script behaves with respect to the indicator. Eventually you will know what suits your style or what indicator you are comfortable using with. I personally use moving avg and RSI to decide on my action and trendlines to understand support resistance areas. It took me 3 years of trial and error to arrive at this combination.

It is good to have a strong risk management method and take lesser risks when you see the probability is lower if one needs to take position. It is better to pre-decide your risk management method and just follow the plan after that. This way your approach remains standard and it makes it easy to analyze later if you need to tweak it.

Hope that answers, happy to discuss more if you have anything else in mind, from whatever I know.

[deetee]

Originally Posted by Mustang_Boss

i tried but nothing worked. Often these could be projected in both directions with the data..

It's very rare that nothing works. I am sure something would have worked very well but many would have backfired. Almost every trader goes through that phase, unless personally led by hand of a very good mentor.

I will quote a personal example. When I started using Technical Analysis (TA) techniques, in the beginning I used very simple techniques. On one of those beginner days I got a return of 400% of the trading capital I put, all based on the rudimentary TA strategy I employed. I started believing in TA, read more about various TA techniques. I started using more techniques and began trading aggressively. Some trades turned out good and some bad. I kept reading more and more, trying to develop fool proof techniques, all with ambition of gaining more profits. Then eventually, things started backfiring and I made more loss than profits. And I kept reading more and more about TA, viewing YT videos, attending courses and what not, all with aim of sharpening my skills and getting to know the best techniques. Not matter how much more I sought to learn, my trades were not getting better.
Then eventually, the enlightenment happened. To be successful with trades, we have to accept that we need not know all the best knowledge that is out there. But we need to know when to accept that we are wrong or when to accept that this is all the money I can take now and exit the positions and reconcile with our strategy.

Fundamental analysis (FA) and Technical analysis (TA) are two parallel perspectives of understanding about the market and planning how we play it out. The former is more traditional and works well for stocks and medium to longterm market participation. For indices or shorterm trading in stocks, TA has the edge. That is because, TA is more dynamic compared to FA as it is almost instantaneously driven by market movements. Compared to stocks which are real entities, indices are mathematically derived entities with a weighted mix of stocks contributing to their value. As such, TA is even more apt when trading with indices as most techniques of TA are results of mathematical calculations. However, if all is fair and straight, all mathematicians and statisticians would have made a killing trading with derivatives. That is the beauty of markets, every one has a fair and equal chance of making money.

Even though the entity (stock index) at its core is a mathematical concept, it's chart movements are affected by emotions of large scale market participation. This is where the probability factor kicks in and throws certainty of mathematical formulae out of the window.

I repeat, one doesn't need to know every TA technique to trade successfully. Rather we need to understand the probability of being right with a technique and when we assess that probability to be high we can raise the stakes and when it is low, lower the stakes or even better, sit out until we catch a more probable opportunity.

At any point, market can throw tantrums and take a very less probable direction, even though various TA techniques point otherwise. That doesn't mean that we should be apprehensive about following the techniques. What we need to look at is how frequently we are able to assess the market right. There will be days when we get it wrong, but that should be relatively less than the times we get it right. If that's the case, then it is an affirmation that the techniques we use and how we use them both are good enough. If not then, start looking at the way we understand and apply the techniques rather than doubting the technique itself. Because, the technique itself can't be wrong, it's the errors in application part or the context of application that can lead to losses. Without identifying how to fix our understanding or improving contextual awareness, no matter how many techniques we learn, they are not going to generate profits. To do that, we have to stick with clear set of TA tools for sometime and keep analysing the results and see how to improve the application part. Occasionally it happens that, certain TA tools are much easier to understand for some , while the same can be complex for a few others. So, if after using for a while, one is not able to find success with chosen set of tools, then change one technique at a time and repeat the process until you find the right techniques that give you a relatively more success rate.

There is no set of techniques or strategies that give 100% success rate, if anyone says so - they are simply bluffing. If we can find even a 60% success rate with a certain set of techniques, its a good thing to be happy about. Further improvement, eventually comes with time and experience.

[thirugata]

Adding another point here for using multiple indicators together.

Lets say one has identified 3 different indicators which has a success rate of 60% when used individually. If an action is taken when 2 of them give same signal, odds of winning will go up to 84% and if an action is taken only when all 3 indicators give same signal the odds of winning goes up to 93.4%.

This is just a mathematical representation of how one can improve their success rate. Developing 3 different methods with 60% success rate is a very tedious process.

Downside of such a method is number of opportunities that arises reduces drastically.

Another way of improving the success is to target better risk : reward ratio.

If one gets 1:2 risk to reward with 60% success rate, you make 8 R per 10 trades (R = risk per trade)

If one can improve it to 1:2.5 with same 60% success rate, you will get 11 R per 10 trades.

[Imran.Syed]

Originally Posted by SmartCat

Open link in Youtube and watch videos in this playlist:

https://www.Youtube.com/watch?v=HCcF...mL8bK2R-OyXzCu

Videos have been deleted or taken private since.
Any other suggestions for Day 1 or 0 people? Looking to learn more and zerodha varsity didn't entice me enough unfortunately