The original article on how to trade using the levels can be found here>> http://indianstock-tips.blogspot.com/2009/11/how-to-trade-using-indian-stock-tips.html
The Full set of tweaked trading strategies is long overdue but due to my tight personal schedule, I am still unable to post it. I will surely post them before this week ends. For the moment though, I would like to clarify some points so as it may benefit those who are strictly following the strategies, so as to avoid occasional whipsaws as one of our friends, Mr. Govind has pointed out.
Today, the Nifty opened gap down. It opened below our sell below trigger price. So naturally we would not go for the trade, BUT, it went above the sell below trigger and then slowly drifted below it once again and went back up.
So in these kinds of rare scenarios, what does one do?
We will formulate one rule, which I have been following. If Nifty opens gap down or up and tends to trade over or below our trigger point at the opening of the market, WE WILL NOT trade for the first 15 minutes. Only in this case.
The second rule would be a little more complicated. I would not like to complicate this very simple strategy because we are having some rare whipsaws, but it would be worthwhile to know what to do in these scenarios so we need to know it.
The second rule would be, the 7-Point Rule. Just in case nifty opens gap down or gap up above or below our levels, then we will not initiate the first trade unless the index goes above our sell below level 7 points and then drifts down and vice versa for the buy above level.
Hope it is understandable, if it is not please do write in to indianstocktips@rocketmail.com for clarifications, or if you do have any other suggestions which may be more beneficial than the above, please do let me know.
The above will help avoid unnecessary whipsaws thereby avoiding some losing trades thereby making our winning trades more and eventually more profits.
