CMP: 5243
Insight for the Day:
When market VIX is HIGH as was the case today, the 34EMA,30mins -21EMA,5mins LIFO intra-day trading system can get WHIPSAWED !!
(errenous BUY signal generated @ 2:00pm followed by TSL hit @ 5230,
immediately followed by another errenous SELL @ 2:30pm)
Today all systems generated FALSETTOs -->
Even the HrHi-Lo EMA SYSTEM Failed to INTERPRET the moves between 2:00 PM & 3:00 PM today (generated FALSE SELL) !!
INFERENCE:
All I can conclude for now, is that NO TREND FOLLOWING SYSTEM is 100% BULLET PROOF,
and esp on SMALLER DEGREES (i,e INTRA-DAY) , if PRICE VOLATILITY is HIGH, then any TREND FOLLOWING SYSTEM will definitely face whip-saws.
TREND FOLLOWING NEEDS A TREND TO WORK, Yo-yoing prices @ smaller degrees will cause WHIPSAWS !!
Just as I accepted the PROFITS that LiFO-Fibbo generated these past few TRENDING days, with the same balance & humility I accept the SL hits today. ITS AN OPERATIONAL HAZARD, NO REMEDY :-)
COMING TO THE SWING (EOD) TRADE:
CANDLES & TLs :
1. EOD we have a DOJI with a LONG Lower Leg. --> Sign of POTENTIAL BULL REVERSAL
Needs to be supported by a White Candle tomorrow with CLOSE above 5244
(ideally CLose >> RES ZONE of 5256-5280, will CONFIRM a BULL REVERSAL)
2. Price again closed >> Support TLs @ 5220, Can be SUPPORT here
SMO SAR VERDICT:
HONEST VIEW AS I SEE IT --> SURPRISE, SURPRISE: DUAL PLAY POSSIBLE
1. For pure SAR trader, short trade from 5325 is STILL ON, SMO SAR LEVEL : 5256
2. Condition C1 satisfied today: Price close > 5DLEMA (@ 5206) , ON GREEN ALERT for LONGS , after C2
SUMMARY :
In such situations, were DUALITY is on DISPLAY, Keep it SIMPLE.. look @ SUPPORTS & RES
Relax, have a chilled beer in hand & wait to see if we get a EOD close >> 5280 ... GO LONG, else GO short on BREAK BELOW 5220
cheers
Insight for the Day:
When market VIX is HIGH as was the case today, the 34EMA,30mins -21EMA,5mins LIFO intra-day trading system can get WHIPSAWED !!
(errenous BUY signal generated @ 2:00pm followed by TSL hit @ 5230,
immediately followed by another errenous SELL @ 2:30pm)
Today all systems generated FALSETTOs -->
Even the HrHi-Lo EMA SYSTEM Failed to INTERPRET the moves between 2:00 PM & 3:00 PM today (generated FALSE SELL) !!
INFERENCE:
All I can conclude for now, is that NO TREND FOLLOWING SYSTEM is 100% BULLET PROOF,
and esp on SMALLER DEGREES (i,e INTRA-DAY) , if PRICE VOLATILITY is HIGH, then any TREND FOLLOWING SYSTEM will definitely face whip-saws.
TREND FOLLOWING NEEDS A TREND TO WORK, Yo-yoing prices @ smaller degrees will cause WHIPSAWS !!
Just as I accepted the PROFITS that LiFO-Fibbo generated these past few TRENDING days, with the same balance & humility I accept the SL hits today. ITS AN OPERATIONAL HAZARD, NO REMEDY :-)
COMING TO THE SWING (EOD) TRADE:
CANDLES & TLs :
1. EOD we have a DOJI with a LONG Lower Leg. --> Sign of POTENTIAL BULL REVERSAL
Needs to be supported by a White Candle tomorrow with CLOSE above 5244
(ideally CLose >> RES ZONE of 5256-5280, will CONFIRM a BULL REVERSAL)
2. Price again closed >> Support TLs @ 5220, Can be SUPPORT here
SMO SAR VERDICT:
HONEST VIEW AS I SEE IT --> SURPRISE, SURPRISE: DUAL PLAY POSSIBLE
1. For pure SAR trader, short trade from 5325 is STILL ON, SMO SAR LEVEL : 5256
2. Condition C1 satisfied today: Price close > 5DLEMA (@ 5206) , ON GREEN ALERT for LONGS , after C2
SUMMARY :
In such situations, were DUALITY is on DISPLAY, Keep it SIMPLE.. look @ SUPPORTS & RES
Relax, have a chilled beer in hand & wait to see if we get a EOD close >> 5280 ... GO LONG, else GO short on BREAK BELOW 5220
cheers
Chill Bro - lower the t/f in consideration, greater the odds of whipsaws. IMHO, 1 hour candle should be the Least Count to pronounce a potential verdict...
ReplyDeleteThanks Naagi,
ReplyDeleteThis IMHO is a v dangerous phrase.... I have been consciously avoiding usage ever since I started the Blog :-)
Our aim is to become SYSTEMATIC / better still ROBOTIC as traders, if u will
Can u pls back the view
"IMHO, 1 hour candle should be the Least Count to pronounce a potential verdict..."
with HARD DATA
No offense intended. I wish to keep my own OPINIONS @ BAY & PLACE MY TRADES IN THE HANDS OF LOGIC & MATHS, tats all :-)
cheers