Here's an account of a loss trade. The scrip in consideration is Auropharma. Below is the 5-minute chart of the same for reference. Having suffered a loss in the morning I was in for taking another trade. This stock was open in one of the tabs. I was waiting for an opportunity.
Though price opened Gap up price filled the gap immediately. I zoomed in to 2-minute chart to find an impulsive structure fall from day high to earlier resistance area marked in the chart by horizontal box. I expected the price to retrace the fall by 0.618. Generally, price will retrace anywhere between 0.618 - 0.786.
I have marked the point where I presumed the retraction was complete. So I placed a short trade. There were lot of signals that made me uncomfortable while the trade was on. Though I felt price could go against my plan, I stuck to the plan. There were ample signals alerting me. My stop was taken off. Later price covered 78.6% retracement and started falling.
I must have waited for little more time. Impatience was another reason for the failure. Entry wasn't timed well. I didn't enter the limit price while putting on the trade.
What about Nifty 50 index?
Nifty 50 opened Gap up near 'r2' by about 70 points. A higher CPR relationship was in place. Below is the 5-minute chart of Nifty 50 index for reference. I have marked the CPR area for current session by a colored horizontal box. Nifty kissed 17106 levels twice from where heavy selling had come earlier. For most part of the day Nifty slithered around 'r2' pivot.
