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Mahi Mahi: If A Stock Is Down 2%, It Can Be Down by 4 %

NSE:M_M   MAHINDRA &MAHINDRA
That's true..down 2% doesn't mean it can not go down further. But the conditions are that: It should be in a strong downtrend on a higher time frame; and we should have proper tools and system to manage our trade.

M&M has been in a strong downtrend on Daily, 4H and H. So I thought it could be nice short. But by the time I could open my lappy, stock was already down 2%..how lame.

I opened up my Ichimoku System and saw that stock had given a fresh break down below the cloud with higher volumes on 15 min chart (See candle A) and it was already in bearish territory on higher time frames. All I need to do was to find a better opportunity to enter.

Candle B went deep into the cloud and then sold off quickly. I placed a sell order below the small swing @ 1319.50 and got hit in the very next candle C. My initial stop was above the high of candle B.

Then I kept on trailing. The doji pointed in the chart had a nice volume but price was able to breach only a few paisas above this doji , and I was not stopped.

# I always give some room above the high of the candles when I trail so that I am not hit easily.

Finally I was thrown out of the trade @ 1303.60. It was a nice 16 point trade or 1% of the stock value. Whenever I get 1% of the stock value as profit I call it a good trade. Without a good system in hand, I might not have touched the stock.

Above trade does not mean that I dun lose. I had a small loss in SRT             buy, which I covered later in the session by shorting it. Sometimes it takes time for daily trend to clarify itself. I was breakeven in Tataglobal             and you all know about Mindtree             :)

The above experience would definitely help me to be more disciplined in future. I hope the same for all traders.

Have Fun, and happy weekend.
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Regards
Bravetotrade
Comment: This time the PRR confirmation method was used in the trade.


Comment: May be the following update will help the new followers to be disciplined in trading.


Discipline takes time to develop. Even experienced traders have problem with that :)
Reply
@vanathi, I think discipline is absolutely a psychological concept. As we have been trained right from our childhood to not take risks, not to do this, not to do that. In trading these traits developed over decades resist us to take risks even when the risk is minimum.

Our society has also inculcated a habit in us to follow the herd, but in trading by doing so we risk a lot.

I think we should change the way of upbringing the new generation if we want better traders in the future so that they don't face the same problems we faced :D

What do you say??
+1 Reply
vanathi Bravetotrade
@Bravetotrade, I agree. New generation is very smart. I taught my 8 yr old niece showing charts, buy low and sell high to get profit. And she applied it in real life buy collecting flowers in garden(zero cost) and selling it to me. Guess the profit percentage :)
Reply
@vanathi, She is making money without any risk involved. Kids learn faster :)
+1 Reply
Sir, today I could also identify some good stocks like airtel for buy and vedl for shorting. Airtel I got to know from news. Other one was an idea from trade view. How did you get m&m sir?
Reply
@RajKA, it was on my radar, I had been watching a harmonic pattern which could take it further down.
Reply
Thanks for posting your experience
Reply
@RajKA, your welcome.
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