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Market Range – Is it that Simple !?

Greetings !!

Prices are always on move,

~ Few times in Trend (highlighted as ABCD in the attached NIFTY50 Daily Chart).

~ But many times in range (oscillating in between of two price points);

And identification of Ranging Market Conditions are very important because, there Market builds-up energy for the next TREND.

What Next: Few times Trend Continuations but many a times Trend Reversal.

MARKET RANGE - 9 DECEMBER 2019

NIFTY50 Spot Index Daily Time Frame Chart Description: 

On 7th November, when NIFTY closed above 12000 for the first time after June 2019, we had updated to clients that 12200 as Possible Market Top (marked as Point 1 in above Chart), and on 14 November 2019 gave Market Support as 11800 (marked as Point 2).

WhatsApp Screen Shot attached below are for better clarity & understanding.

Advance Levels are always helpful. Market was kind enough to obliged Pillars’ Strategy calculated Trading Range in those 20 days. No surprises.

 

Why we avoid doing Options & Range Trading ?

Traders understand the Importance of Trend but Successful Traders understand the importance of both Trend and RANGE. And, ideal choice To Capture the same is,

~ Use Cash &/or Futures’ Instrument To Capture the Trend

~ Use Call Put Options Hedging Strategies To Capture the MARKET Range

AND, both trending and range bound Market requires precise levels, which can used for Entry, Exit but mind you they can’t be risk free. Because,

Both Trending & Ranging Markets behaves in the same manner. For example both can be,

~ Time wise Long &/or Short,

~ Amount wise Big or/& Small, AND

~ Price Momentum wise Fast &/or Slow

And, this depends on variety of News-flows, Seasonal Effect, Event Impact.

In that context, Options are way to Risky. Because, if advise Shorting Options then practically we are doing less reward high risk trading and if advise Buying Options then Time Value of Money would decay the premium paid, therefore net result will be loss even though, Market went in our favour at last.

Most Importantly, we had seen that People find very difficult to apply Stop-Loss and in case of Options they never ever uses the safety measure called the Stop-loss.

And this is the precise reason why we don’t advise for Options or Range Trading.

However, we keep our clients aware of the same with best of the intensions.

Thanks for Reading.

 

Team Rocket

Get in touch with us at,

~ WhatsApp: +91 99003 30558

~ E-Mail ID: Rocket@RocketTrades.com

For more details, doubt, feedback; Speak with Nilesh Jain on 99003 30558

We’re Strictly a Research House armed with proprietary methods & workings.

 

Officially Rocket Trades Clients are having Zero Positions in NIFTY BankNIFTY till this write-up. However, we may get Entry during this week of 9 December to 13 December.

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