Here are my trade details for the day. I went short in Sunpharma stock. Below is the 5-minute chart of the stock for our reference.
Since, Nifty 50 opened gap down with bearish confirmations today; I looked to go short in Sunpharma. The stock opened with a big bearish candle shown in the chart. Observing resistance near the open candle High at around 9:50 a.m., I placed my entry which shown in the chart.
I strictly kept my Stop little above the Open bearish candle. My target was near the Weekly pivot 'R1' at 703 levels. The trade had 1:3 Risk-Rewards ratio. But my stop got hit within few minutes.
Later, the stock moved down reach 703 levels and even below.
What about Nifty?
Below is the 10-minute chart of Nifty 50. We can see a beautiful H&S pattern in place. The broader index met the implications of H&S by the end of the day which is shown by vertical red boxes.
Nifty 50 opened Gap down near the Neck Line and continued its southward move. The significant Support and Resistance zones are marked by horizontal boxes. Also take note of the pivots ‘S1’, ‘S2’, and ‘S3’ being traded by the Nifty 50 so perfectly for this day.
I also conceived a counter trend trade with 1:1.5 RR ratios which worked as per plan during the middle of the day. Nifty closed 1.04% down for the day.
Lessons:
My mental feedback says that I was in a hurry to trade. The lesson is to trade high probability set up. High probability set up doesn't occur in volatile movements. We can see from the above chart the presence of volatile conditions during the opening hour.
I also completely dropped my technical toolkit to see reasonable trade in the above case. Where are those 3-4 strong technical confirmations telling you to go short? For example, RSI wasn’t indicating anything reasonable.