Intraday Trading: Pivot Trading system.

While I don't recommend Day Trading, there are many who are interested in Day trading only and keep asking me what is the best way to trade Intraday. So for their benefit I am explaining one of a very effective Day Trading method . Its called pivot trading system and its simple yet extremely powerful and accurate. More often than not it delivers however key is to patiently wait for the levels before you initiate your trade.

You just need to spend couple of minute before the market opens and you will be ready to trade.To calculate pivot levels & support/resistance you need : Low, High & close of previous day.

Lets take example of Nifty. Suppose previous day low was 11500 high was 11610 & close was 11520

Now your pivot level = (11500+11610+11520)/3 = 11543
Resistance 1 = Pivot level*2 - low of day  i.e, (11543*2)-11500 = 11586
Resistance 2 =  Pivot + ( High-Low) i.e, 11543 + (11610-11500)= 11653
Support 1=      Pivot level*2 - high of day  i.e, (11543*2)-11610 = 11476
Support 2 =    Pivot - ( High-Low) i.e, 11543 - (11610-11500)=      11433

Now you have all the levels you need to trade ( you should have this info ready by the time market opens). Now once market opens let it settle down for first 30-40 mins and lets say by 09.45- 09.50 AM-

a) Nifty is trading at 11520 i.e, (below Pivot level but above S1)  in this case you Buy nifty once it crosses 11543 and sustain for couple of mins ( with a SL of 11476 S1) but if it starts moving down and break below 11476 (S1) then you short sell with a SL of 11543

b)  Nifty is trading at 11550 ( above Pivot but below R1): in this case you buy  when Nifty crosses 11586 (i.e R1) with a SL of 11543 ( pivot) and sell if Nifty break below 11543 ( pivot)

c) If Nifty opens between R1 & R2 then buy above R2 with a SL of R1 & if Nifty is trading between S1 & S2 then sell below S2 with a SL of S1

d) If nifty is trading very close to pivot point itself then wait for S1 or R1 to break before trading.

It is very simple and effective and can be used for any stock or futures ( online calculators are available to calculate pivot levels and one can use them But I listed the formula here so that you know how it works)

Practice this for few days and am sure you will find it useful and working. But like all trading rules the key rule here is the discipline. So trade with discipline.

Nifty Outlook and Trend for 27th May 2019

Medium Term Trend:  ↑UP (down below 11550)

Strength returns: After falling around 400 points form days high yesterday, Nifty found strength today and rose to 11850 levels. It made a strong close at 11841 ( up 187 points).

In last  2 days VIX has fallen around 50% ( from 29 to 16) which in turn has destroyed premiums of options across various strike prices. We had mentioned ( more than once) in our previous posts that 11640-700 is a strong support for market and unless it breaks, the trend will remain strong and on the upside. Inspite of falling 400 points yesterday Nifty held on to its support and today gave more push up.

So is it safe to assume that fall yesterday was just a profit booking and now that markets are settled and the move has resumed? Probably so, but we need more strength above 11880-11910 levels( todays high) to conclude the same. Yesterdays fall was a ibt too strong and probably markets will be spending a little more time around 11700 before moving up from here. Market trend remains up but with a caution & another bout of profit booking can not be ruled at this stage.

One disturbing thing (for bulls) to note is that, on daily charts, the entire rise from 11108 is looking like one extracting triangle where rise are getting shorter and falls are getting bigger ( and it seems in its last E leg). Nifty needs more strength above 11900 levels to negate this pattern ( which can have strong bearish implications going forward).

So overall market are in uptrend but further profit booking and weakness as a result can not be ruled out however as long as 11600 and 11550 levels are holding, the prospects of Nifty hitting 12K+ levels is still there. For any bearish scenario to materialize , we need to see strong fall from here breaking below 11550-11500 levels in next few days. More time markets spends above 11600, more the chances of markets going further up from here are there.

Happy Trading!





 

Nifty Outlook and Trend for 24th May 2019

Medium Term Trend:  ↑UP (down below 11550)

Wild Chops Continues: Historic day today, NDA secured a majority which was slightly better than what markets had anticipated. Nifty opened strongly at 11900 levels up 150+ and went on to touch 12050 levels but succumbed to profit booking and gave up all its gain and closed at 11657 ( down 70 points).

There were many who were anticipating a repeat of 'Exit poll' when Nifty had opened up 200+ points and later added 400+ points as the trading progressed but all those were left disappointed by markets.

All our regular readers are aware & we have been mentioning in our previous post about 11700 being a very good support and as long as it holds there is a chance of market going up at the same time we also mentioned that 12K is very strong resistance ( because of call writing) and market would find it tough to cross 12K levels in current series. And this is exactly how the markets played out. Nifty threatened to break below 11700 levels during last 2 days but held on it and today it touched 12K levels and reversed sharply from there and even broke it.

What happened today was a classic case of 'buy on rumor and sell on news', all long positions which have been entered recently had to be unwound once the rumor became news. Also profit booking was expected since Nifty has run up almost 900-950 points from lows of (11100) in a matter of 5-6 days.

So what to expect next? markets are still holding onto 11640 support so Its still possible that some more steam is left in this rally and markets may attempt another shot at 12K but we need to see how market shapes up during next couple of trading session before deciding our next trading strategy. Mostly bottoms are made on panic days and tops are made during euphoria. Today was one euphoric day so it could be possible that some important top is hit today( that options can not be ruled out today).

For now no positions is advised ( all our longs were exited above 11900 levels today itself). Below is the excerpt of messages/trades (for your reference) shared with our subscribers in last 2-3 days.

Messages/trades we initiated during 20th-23th may (run up to election results)

20/05/2019, 09:08 - Good morning. 2%+ opening likely.

20/05/2019, 09:09 - Will advise if anything has to be done
20/05/2019, 13:30 - Nifty 11750 -buy 2 parts
20/05/2019, 13:48 - 11781,hold both parts for now.
20/05/2019, 13:48 - Will add 2 more parts a little later
20/05/2019, 14:56 - Nifty had taken 8 sessions to fall from 11790 to 11108, now entire fall is retraced in 4 days (just 50% of time). Classic case of trend reversal
20/05/2019, 15:08 - Nifty 11832. Carry both parts for tomorrow

21/05/2019, 09:16 - Good morning, hold 2 parts long for now. Will add more longs later
21/05/2019, 09:46 - Nifty 11836 buy 2 more parts
21/05/2019, 09:47 - All 4 parts entered now,  part 1 @ 11750 and part 2 @11836
21/05/2019, 10:06 - Nifty 11870,keep carrying all 4 parts. Will advise if anything needs to be done
21/05/2019, 13:50 -Nifty 11770. Keep holding all  parts long
21/05/2019, 14:49 -:Nifty 11700. Keep holding for now
21/05/2019, 15:18 - 11721 hold all parts nifty long for tomorrow

22/05/2019, 09:21 - Good morning, hold all long positions
22/05/2019, 13:23 - Keep holding all longs for now. Nothing to be done
22/05/2019, 15:18 - Carry all longs for tomorrow, Keep calm, don't panic and hold all longs (don't leverage or over trade). We exit when SL triggers and not before that ( because of rumors and panic
22/05/2019, 15:26 - Nifty has held on to its crucial support for whole day.

23/05/2019, 08:54 - Good morning, we might exit 2 parts after opening.

23/05/2019, 09:15 - Nifty 11900 exit 2 parts long. Book profit, hold balance 2 parts
23/05/2019, 09:59 - Nifty 11938 book profit balance 2 parts
23/05/2019, 10:00 - Position nil. Wait for next trade

As you can see we keep guiding and advising our subscribers through regular intraday whatsapp updates as to what needs to be done during trading hours. If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:

http://niftywaveindia.blogspot.com/2019/02/join-us-on-whatsapp-how-to-subscribe.html

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Happy Trading!