Nifty Analysis & Weekly Chart for period 09 – 13 Sep,2013

Weekly Stochastic/RSI Chart still support bullish view.

Low of the Hammer are still protected 5254 and 5118 on  weekly basis. 

Weekly remain bullish above 5632

78.6%  of the last major fall  5882 need to crossed for trend to turn bullish.

5688 is the immediate support , 6093 is the immediate support on weekly chart

Monthly chart show 5950 ,6093 as resistance 

MACD - no signal yet

Nifty Daily Chart Update -13th Sep 2013

Daily Trend is up above  5629(SAR)

Bearish Engulfing Pattern @5932

Raising window support 5460,5688

Weekly Indicator is bullish and Daily Indicator is bullish OB.

Support are 5210-5315-5350-5410-5448-5487-5515-5550-5606-5606-5630-5675

Resistances are 5720-5748-5840-5920-5970-5985-6080-6113-6150- 6187-6230-6284

Low of the Hammer are still protected 5254 and 5118 on  weekly basis. 

Weekly remain bullish above 5632

78.6%  of the last major fall  5882 need to crossed for trend to turn completely bullish.

Nifty Daily Chart Update -10th Sep 2013

Daily Trend is up above  5450(SAR)

Weekly Indicator and Daily Indicator is bullish .

Support are 5210-5315-5350-5410-5448-5487-5515-5550-5606-5606-5630-5675

Resistances are 5720-5748-5840-5920-5970-5985-6080-6113-6150- 6187-6230-6284

Low of the Hammer are still protected 5254 and 5118 on  weekly basis. 

Weekly remain bullish above 5632

78.6%  of the last major fall  5882 need to crossed for trend to turn completely bullish.

Thought Process Before You Put The Trade ON

TO ACHIEVE  CONSISTENCY , I SHOULD 
1.Be able to identify an edge (trading method)
2.Have a trading plan on how to utilize the edge
   Risk Parameter , Money Management (Position Size), Profit Objectives
3.Able to execute the edge without making trading Error
4.Think in probabilities
5.Making a mental shift from trade to trade perspective to series of trade perspective 
6.Believing that you don't have to know what is going to happen next on trade by trade to win or make money.
7.Develop the ability to recognize you have crossed the threshold from normal self confidence to the state of euphoria.


Main Components of  My Trading Plan 

Risk Management

Why do we need Risk control and Money Management ? 
Some losing trade are normal part of the trading. My responsibility as trader is to Keep my losing trade small  and let the winner run . Every trader has a potential to be loser ,if it is loser then i need to protect my self from loss. 

Money Management 

• Allow me to be wrong 
• Help me control risk 
• Take into  account every trade can be potential loss
• Separate the pros from the novice 
• Money Management is the state of the mind .

WARNING SIGNAL :- If your draw down on last 10 trades exceeds 12% ,then your are exposing your self to obscene risk . (Based on Risk of Ruin Table)

GOAL:- Let your winning trades run and cut your losing trade short !!!

Healthy Money Management Psychology begins when you believe that  and acknowledge that each trade outcome is unknown at the time you enter the trader!. 

Trade Risk Versus Market Risk 
"Trade size" control the Trade risk .Can be controlled through protective and trailing stops.  
"Account Size" control the Market Risk .Cannot be controlled  ex. huge Gap up/down .
If you control your Trade Risk then there is high probability of recovering the Market Risk. 

Risk of Ruin 
The probability of an individual losing sufficient trading money to the point at which continuing on is no longer considered an option to recover losses. Make Risk of ruin work for you .

Win-Ratio Formula 
Win Ratio =# of wins divided  # of trades
Ex := 60%= 60 divided by 100

Pay off Ratio Formula 
Pay off Ratio =Average winning trade divided  Average Losing trade
Ex :=  3= 300 Re  divided 100 Re or (3:1)

Relations between Win-Ratio and Pay Off Ratio
Screen shot below show even if we get the 2:1 risk  : reward and  50 % winning : Risk of ruin is reduced to 0.8%.Make Sure you make risk of ruin work for  you than against it.

Two Percent Risk Formula 
Account size × 2% = Risk amount
Ex:= 1,00,000 *2% =2000 -(These is the dollar amount you can afford to lose if you get stopped out.)

Trade size formula

[Risk amount − Commission]÷ Difference between entry and exit = Trade size
Ex:= [2000-500] ÷ (15*50)=2 (Maximum contract you can purchase)

Please find the link of  some more articles on Risk Management 
1.Nifty Future Risk Management Plan
2.Risk Management Checklist
3.Fine Tuning Your Money Management System