Lessons from the Pros

India Markets

Choppy Markets

I get a lot of questions from students about which way the markets are likely to go. Looking at my market update article from August, I had observed a head and shoulders bearish reversal pattern that did not look strong. As we enter October, we can see that the pattern did indeed fail since it was not at a strong supply zone from a larger time frame.

nifty oct

When price broke the neckline, it did pierce the demand zone below but then reversed.  I am now watching to see if a higher low is made and should a higher high follow, the bullish trend should continue.

high high

The problem lies in trying to trade in longer timeframes when the markets are potentially changing trend direction.  When you are not certain of the market direction, it is best to wait and not put your capital at risk.  You could also drop down to smaller timeframes where a trend can be observed and joined with higher probability.

nifty futures 30 min

You have to remember that as a trader, deciding not to trade is also a trading decision.  We are all too eager to jump into positions just because we feel we “have to trade.”  The truth is that we must remain patient and protect our money.  We should only enter positions when we have found a trade opportunity that offers low risk, high profit potential, and also a high probability that the trade will work.

Online Trading Academy students know that the truth to where price is going to move is on price itself.  Use what you have learned in your classes as well as in the Extended Learning Tracks to improve your trading performance.  And above all, protect your money.  If you lose it, what will you trade with?

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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