I log my reflections on current day's trading activity. Today I arrived at the trading desk without a plan to trade markets. The consequences of which, I write here as we go on. Below is the 15-M chart of Sunpharma stock. A clear Leading Diagonal is present in the chart. All the Fibonacci ratios satisfy the Diagonal conditions. Price had also finished correcting the diagonal a little over 0.618%.
Now, below is the 5-minute chart of the scrip. Two converging dashed lines are drawn. Today price opened just above the upper Trend line. Price was also above 200-MA. The first three candles also took support near the daily pivot ‘p’.
As I checked the risk profile, 666.2 seemed plausible level giving 3 points of risk. The target is near the confluence of previous and current daily pivots ‘r2’. The Risk-Rewards ratio worked out for 1:2.6. My mind started its prattle at this point saying "3 points is unacceptable."
Before, I could even draw the trade box, Price shot up altering the Risk-Reward profile. I was hesitant to enter the trade. For next one-two hour’s time price zoomed higher leaving me aside.
Lessons:
Come to trading with a plan. Plan is of utmost importance in successful trading.
If you are in doubt, enter in less quantity. Don't worry about losing. Loss trades are part of trading. In the above case a quick action was required because of absence of plan.
What about Nifty 50?
Nifty 50 index opened Gap up. The opening candle is marked the 5M chart above. The opening candle is a huge red candle. At 10:50 Nifty 50 took support near the weekly pivot point 'P' and started to inch higher for the rest of the day. The rise is not gracious, but surely a lazy one. Nifty 50 put up 15820 as Day High.