Today I took a trade more aggressively as soon as I saw weakness of bears in a Hammer candle shown by arrow mark without waiting for confirmation candle to finish. There was R1 pivot present as Support just where the Hammer occurred. And the stock had opened Gap up for the day. The scrip was correcting. I thought a rally to higher prices might ensue. Please see the 5-minute chart of Axis bank below.
Within two candles I sensed weakness of bulls easily as seen in huge up wick in the third consecutive candle marked by small circle.
R1 pivot was held for over 30 - 35 minutes into the trade. Suddenly, R1 was taken off. I had chance to cut the trade manually and reduce the amount of loss.
But somehow I didn't do it. This is also a lesson in active trade management. Since I tried to be more aggressive today, I entered the trade in small quantity.
Trade details are as follows. Entry @ 723.3, Stop @ 721.1, and Target @ 728.5 Risk-Rewards ratio was 1:2.5
My stop was placed below the Hammer wick. Let's see from the view point of professionals. Those who saw this Hammer would have noticed all up wicks in the subsequent candles after Hammer. They knew few novices are in there. Definitely, they would have entered short near 723.5 levels.
A second opportunity emerged with good Risk-Rewards ratio which is shown in the chart. Falling prey to the reasoning of the mind I didn’t go forward to take trade. In this opportunity, in the 4-minute chart there was a beautiful shooting star with confirmation which is not seen here.
What about Nifty?
For today Nifty 50 index opened Gap up near R2 pivot level of the day and was resisted near minor Resistance zone of 14850. Once first hour clutter was finished, the broader index was playing pivot levels well, while staying sideways throughout the day. R1 and R2 pivot points were acting as important levels for Nifty for the day which can be seen from the 5-minute chart below.
Lessons:
Be an active trader first. Later, when market teaches all lessons you may try to be an aggressive trader.
When actively managing the trade, any signals that give strong cues will have to be considered with open mind. This lesson I am learning the hard way.
Until a trader gains a considerable experience it is better to trade with rules and confirmations. That way a novice will avoid making dumb trades.