Weekend Musings

As we move further into this bear market, we are going to be witness to changing conditions not just of our own local market movements but from others as well.

This was projected yet again through the big gap open on Friday, a condition not generated by our own dealings. We tried to be ready through a study of the Euro, Dollar and the Spx which we did ahead of the Holiday in this post here, each of which went as expected to the given targets.

Bear markets are a continual battle between deteriorating fundamentals and the governments attempts to abort the cleansing process. That is the scenario for very difficult trading conditions.In 2008 even though our market was not as affected,  the liquidity pump given to industry is now showing it's ugly head in run-away inflation which the RBI is having a difficult time to manage.

The news from Spain and Italy and the Fitch downgrades reversed a tear away rally which 3 days earlier had reversed a water fall like decline!

In such markets one has to be willing to reverse positions quickly, because  fundamental perceptions can change fast and profits evaporate. 

 Unless someone had inside information that the downgrade was coming there’s just no way to  predict these kind of things. And the same thing can happen on the downside. The Fed can abort almost any leg down with just a hint that they might fire up the printing presses. This is the recipe for a very volatile and whipsawing type market. 

For the next 12 months at least, I foresee a dogfight for every little profit.Indeed if you are not emotionally equipped to handle this kind of trading environment, I suggest waiting on the sidelines as somebody once famously said "cash is a position".

To trade successfully in such markets, one needs to have an excellent trading system which can quickly identify the changing moods of the markets.No system is fool proof and nobody is going to get a 100 % of their trades right, but proper and timely execution can prevent losses if not generate out right profits!

Secondly, these markets cannot be traded in a vacuum. You need the support of a trading community to point out not just various pieces of news, but also price discovery and direction. Indeed in volatile markets, it is not possible to store up large amounts of information from the markets and a helpful guiding community can go a long way in ensuring that you are on the right track in such markets.

At Vtrender we take great pride in knowing that we have to a large extent tried to cover both the above mentioned  attributes through the OrderFlow system and then the Trading community in the Trading room.

In OrderFlow we have an excellent system of trading which will always put us ahead of the various turns this market will take as it rides out this bear market. The instrument does not matter. the system works in all markets across stocks, commodities and currencies.

Take a Look :

Bank Nifty :

 Gold :

Silver :

 

Those are the OrderFlow charts for this week gone by.

They ensured that our week was profitable regardless of the down then up movement of the market.


In our small community at Vtrender Live in the trading room, we are increasingly getting to hear very good views on both sides of the market. Indeed like lawyers coming to a courtroom, arguments are being made for both sides of the market, with the final market judgment accepted as supreme.

As the saying goes : "Believe in the market, not the experts in the market"

Happy weekend.