Here are my thoughts on an important trade plan that formed this morning. Below is the 2-minute chart of Axis Bank. Normally, I have 5-minute chart on different windows. Since the price was bouncing off from 707 zones I zoomed in to 2-minute chart to see if there was an opportunity.
Price opened Gap down breaching the lower band of a rising channel slightly seen in chart below. Immediately, price tried moving up only to be resisted near weekly pivot point. Again the price fell down to 707 levels and started coming up. Time was 9:45 A.M. and that's when I blew up to 2-minute chart.
A beautiful hammer followed by confirmation candle at 9:35 A.M. was already in place in this 2-minute chart by the time I zoomed in. I waited if I can get an opportunity to enter close to 708.
I didn't have any orders open. At 10:00 A.M. a second hammer formed. This candle shown in chart did come to the area of earlier confirmation candle and quickly filled whatever orders those were present. It was very quick but it was a window of opportunity.
It took some time for me to understand what these twin hammers loudly said in the morning. As all this was happening, I really was hesitant to enter the trade. The Risk-Rewards ratio was only 1:2. I had my apprehensions as there was a weekly pivot near 712.8 that had pushed the price down in the morning which may act as hurdle.
So I decided to watch this trade. Lot of emotions ran in my head though I had no trade on. As we can see the price crossed the weekly pivot level and reached the daily pivot 'p' to hit the target price cleanly.
Lesson:
Watch charts with complete focus. This lesson I seem to be learning the hard way.
Once price reached daily pivot 'p' at around 11:45 A.M., a few minutes later a Double Top formed nicely. In addition to that price was finding resistance near 200 MA. Also, double top was near Resistance zone marked by the rectangle box. I continued to stay in 2-minute chart for the rest of the day. Please see the chart below as reference.
Once double top was in place, I decided to enter the trade. I rather entered the trade very hesitantly. Trade details are as follows. Entry is @ 714.5, Stop is @ 714.55, and the target is @ 707.5. Good Risk-Rewards ratio of 1:5 was present.
Price plummeted. Once price fell down to 710 levels I lowered my Stop to 712.5 making it a free trade with target still set at 707.5. But I couldn't control my emotions near 710 levels as price wasn't falling any further. In fact, Nifty was starting to fall nicely and there was no similar follow up in this scrip. I thought about the sudden price rise in this stock if Nifty starts to bounce off lower levels which didn't happen.
I fell trap to mind and closed the trade just minutes before the price began falling heavily towards 707 levels. In fact, we can observe in the charts that the price fell to the point of confluence of yesterdays and today’s daily pivot ‘s1’. I felt very bad for the decision though I closed 1:3 Risk-Rewards ratio.
Lesson:
Sticking to the plan has great benefits. Despite the outcome, we should stick to the plan. That's it.
Find out the logical base of all the reasons of the mind before changing the decision. This lesson I am learning the hard way.
What about Nifty 50?
For the past two days Nifty 50 found Resistance near 15120 levels. Today nifty continued moving down which started since yesterday afternoon. Please see the chart below.
The opening candle has up wick indicating weakness of bulls and this weakness got reinforced strongly by the following huge red candle. After this strong bearish candle Nifty stayed below moving averages. Till 11:45 A.M. Nifty retraced till 15020 and then started its down move which ended near weekly pivot 'R1'. Nifty closed 0.83% down for the day.