Here are my thoughts about my trade today. First of all, I am amazed looking at the chart of SunPharma
stock to find price validating pivot points R2 and P though out the day. There
is lot of randomness present in the price for today. Please refer the 4-minute chart of SunPharma stock below.
Today I went short in this scrip. The primary reason for the short entry was that price met with Resistance zone near 649.5 levels. I expected one more down move to manifest.
Incidentally, after my entry I found the Risk-Rewards ratio in this trade unfavorable. It was just 1:1.45. This was a mistake on my part. Now, I wanted to cut the trade and look for another opportunity.
In hindsight it was a good decision. In fact, I took some time to cut the trade in green at least to pay for brokerage. There was every chance for my Stop to have been taken off by market. Luckily I found a point of exit little into the trade on the green side.
After manually closing the trade, I was relieved looking at the randomness of the price. However, I also found that the trade had less support from multitude technical confirmations. Looks like I entered a dumb trade.
What about Nifty?
Nifty 50 Opened Gap Up near a Resistance zone. The zone is
marked by the rectangular zone near R2. It's amazing to see how the broader index hit the pivot
levels so accurately. The Gap was filled today itself. Today's top is near
15043. Please refer the 15-minute chart of Nifty 50 index below.
Lessons:
Never enter a trade that has an unfavorable Risk-Rewards ratio against you. First check if RR ratio is favorable. [I only fear I am learning the hard way.]
A full list of technical confirmations is the need of the hour for me.