Dear PAN,
Thanks for the email. I am sure you must have had a fantastic weekend.
I just finished reading the Zero sum book and it had good information like:
· Imbalance, Liquidation and Awareness,
· How the smaller timeframe trades impact the higher timeframe trades
· Fractals in the market
· Shift in trader’s psychology….
…. I enjoyed reading it. Happy to know that a new article on pin-bar is getting released soon. I will definitely keep checking your site frequently for the release. Please suggest me if I can buy the Pin bar book from your site or is it sufficient if I read your new article on pin-bar.
I also read the new article on Onada MT4 indicator; it was good. But felt bit sad because I cannot use the indicator as it does not support Indian market J
There are few other great articles on your site like combining supply and demand with support and resistance. I will read them this week. Thanks a lot for releasing such great articles… May god bless you with more energy, happiness, better health and wealth for continuing this great service
As usual may I kindly ask your valuable guidance on Nifty for the upcoming week…
Attached is the chart of Nifty. As you have rightly mentioned the price did break the Minor Demand Zone and now it is moving lower towards the Major Demand Zone. If you look at the supply zone, there are multiple highs touching the supply zone indicating the banks are placing more sell orders. My query is, when the market reaches the bigger demand zone, will all these huge sell orders will be closed by the banks? and do they go for fresh buying?
Is there any way to know that they have closed all their sell orders and now they are buying at the Major Demand Zone? If it was touching just one or two times, I would have not got this doubt. Since there are multiple touches, wondering if this is a change in the trend? Please correct me if I am wrong.
In the chart, the arrows marked in black are the two short trades I enter based on your teaching. I closed the second trade bit soon because there are multiple pin bars in that zone. Hope what I have done is correct. Thanks for this wonderful method.
Also, please.. please don’t get me wrong as I also want to know your suggestion on another instrument called Bank Nifty. Please reply to this new instrument when you get leisure time as I know you have a very tight schedule.
Both Nifty and Bank Nifty use to move in the same direction with little variations. Sometimes Nifty will initiate the movement and Bank Nifty will follow the trend bit late… Sometimes Bank Nifty will initiate the movement and then Nifty will follow the same.
Attached is the Bank Nifty Daily and Hourly chart. I have marked my readings on the hourly chart. Please at your leisure time can you please look at this chart and share your valuable feedback.
Many thanks in advance. As usual eagerly waiting for your reply.
Regards,
My Response:
Thanks for your kind words Shri, may god bless you too.
As far as the pin bar book is concerned, it’s fine to purchase it now if you want, I mean the article will contain some things related to the information found in the book, but the book itself isn’t really about the stuff that will be in the article, if that makes sense ?. I’ve had a look at the images you sent me and left my response below.
The way the Nifty has fallen since our last email to me suggests that we’ll see the market break back above the highs very soon, maybe not this week, but for sure within the next 2 weeks maybe. If the banks were getting sell trades placed to make the market reverse, I’d expect the first swing down caused by them getting their trades placed to be really sharp, with little to no retracements taking place during the actual move down.
The drop that we’ve seen take place since the beginning of April contains multiple retracements, which suggests that the banks have caused the move down by taking profits off short trades instead of getting sell trades placed to make the market reverse.
The focus for me would still be on looking for a reversal structure to form when the market is close or inside the major demand zone.
If the market drops again from where it is now and breaks through the lows made on the 18th, I’d start watching for a reversal structure to form.
First you want to see a move higher take place, and then you want to see the market drop down to the point where the move higher originated from before moving higher again.
That would be a sign the bank traders are getting buy trades placed to make the market reverse.
If the first move higher is sharp, like the previous swing higher we saw on the 18th, make sure you mark a demand zone around the source of the move.
If the market drops back into the zone watch for a large bullish engulfing candle to form, as it will be a good sign the bank traders are going to cause another swing higher to form from getting buy trades placed.
I’ve had a look at the images of the Bank Nifty as well, it seems to me like the Nifty and the Bank Nifty have a positive correlation to one another. The interesting thing for me is that at the end of last week the Bank Nifty started to rise after it had fallen down to the point where two swings higher had originated from earlier in the month.
It could be that these two swings have formed as a result of the bank traders placing buy trades, and that the move down into the them we saw last week, could well because they weren’t able to get them all placed with the sell orders they had available in the market initially.
If this is the case I think we’ll see the market continue to move up tomorrow.
If it closes past Friday’s highs, I think it’ll be a good sign we’ll see the market move back up to the highs of the drop which began last Monday.
Of course if this happens we’ll see the Nifty 50 move up aswell, so it could be that the downswing on there we’ve been watching over the past couple of weeks could come to an end tomorrow.
Looking at it again, this seems especially likely given the the fact a sharp swing higher took place last Thursday.
The sharp swing higher may have been created by the bank traders getting their first batch of long trades placed ready for the reversal to begin.
The move down back to the source of the swing may be them getting their remaining buy trades placed.
There isn’t any way to confirm whether this is true or not at the moment, but I think that even if it is and we see the market move up tomorrow, another retracement or move down will take place shortly after, when the Bank Nifty moves up to the highs of the drop created last Monday, so don’t fret too much about getting a trade placed straight away, as I’m sure there will be a chance to get another entry even if we do see the market reverse tomorrow.
Hope this helps…