Trade Journal - [27 - 05 - 2021]

Here's beautiful shaky day trade entry. To be frank, I had really lost my focus in the first half-an hour. During mid-day I took up a short trade in Sunpharma stock very hesitatingly. Below is the 5-minute chart for reference.

Sunpharma opened little Gap up with a huge red candle with large wick on its head. This candle can aptly be named as up thrust candle. Now, 706 - 705 zone has been a hurdle for the price. The 706 - 705 zone is marked in the red box. Yesterday, price was thumped down from this zone. So, there is Previous Day High.

Today, with the up thrust candle in place I looked to go short. The second candle for the day is a Hanging Man. The wick present downside of Hanging Man also tells us there are few bulls who believed that they could push through 705 - 706 zone. But, they couldn't succeed as the low of the Hanging Man was bulldozed off by the 4^th bearish candle.

At 11:55 A.M., Double Top was in place near the 705 - 706 zone. With up thrust from morning and 200-MA nearby this short trade seemed reinforced with more bearish strength. So, even before, the Double Top was in place, I had already entered the short trade. I frankly didn't like the way I entered.

The trade details are as follows. Entry was @ 704.1, Stop was placed @ 705. 7, and the target was @ 699.5. The target was fixed based on two reasons. If 200-MA is nearby, price gets attracted and in this case 200-MA also fell at support zone near 699.

Once price fell down to 700, I lowered my Stop to 703.2 making it a free trade. I even cancelled the Target order to firmly wait and take whatever the market might give. Price did come up to 702.5 and it started falling drastically. There was pause before falling below 200-MA. That's when I fell prey to my emotions and closed the trade manually at 699.8 with 1:2.7 Risk-Rewards ratio. That was a jiffy exit.

But, as we can see from the chart, price immediately shifted gears down and fell down to till 696 levels. In fact, I wanted to close near 696 or 695 levels manually. But I couldn't do it this time. I felt very bad. I simply kept gazing at the monitor lost in the act of price.

Trade Journal - [24 - 05 - 2021]

Here is an important entry of a case study into my Trade Journal. The chart below is the 5-minute chart of Sunpharma stock. The stock opened near the daily pivot ‘p’ with a huge Green candle marked in the chart.

Quickly in next 10 minutes the stock found support near the current weekly pivot 'P' and started to go higher towards a confluence of pivots. Current day daily pivot 'r2', previous day daily pivot 'r1', and previous week pivot 'P' formed the confluence zone.

Along with the confluence zone, there was also a hurdle of upper band of a rising channel which fell near the zone. As we can see the price reached that spot.

Once the price reached this point, a big bearish engulfing formed. Here was my dilemma. I have read methods to enter trades when bearish engulfing forms. A big candle such as the one seen above alters the Risk-Rewards ratio. I even remember that we may keep an entry point near the midpoint of the candle and our Stop above the candle. But, I just didn't feel like entering.

Trading Bullish or Bearish Engulfing is challenging. Not all times price retraces to 50% midpoint of the candle. But we can place an entry order if there are more confirmations.

In fact here’s the chart of 3-minute time frame below, where we can see a beautiful Hanging Man candle followed by confirmation candle. Blowing up the chart is another way to confirm if there a point in case.

I have marked the conceived short trade idea in the chart. The Risk-Rewards ratio worked out to be 1:3. The Entry is @ 696.7, stop is @ 698.45, and the target is @ 691.

The trade worked out well in this case. This was also early morning trade set up. Upper band of the rising channel also mounded its blow on price.

What about Nifty 50?

Briefly, let's see what happened in the last session. Refer the chart below. On Friday, Nifty opened Gap up and continued to move higher. It breached 14120 - 14150 zone and closed higher.

Today, though Nifty opened higher, was resisted near daily pivot 'r1' and the index was range bound. Nifty has taken support near 14120 - 14150 zone. For today, Nifty closed 0.15% higher.