NIFTY - Long Or Wrong - 7/19/2016

Jul 19, 2016

Barring few exceptions, major global indices are working on the only principle - either be long or you are wrong. Financial engineering will keep the indices afloat and there is no reason to abandon the trading tactic. But if a person has spend long enough time in markets they know that black swan events happen and they do happen more often than probability tells us. Risk management is an indispensible ingredient for trader's longevity. So taking on a trade, no matter how confident you feel, requires defined exit points. Otherwise years gain can evaporate in seconds. We are long S&P futures but somehow NIFTY has proven elusive. Can't control the risk and can't take on the trade even if we are aware that direction is higher.
It is about time that Indian bourses should start offering NIFTY trading for 24 hrs. We have always lamented the fact that one can't trade NIFTY futures during the volatile global events due to the closed exchanges. But anyway, this is the situation we are dealing with, so better option is to wait and be patient ! Market is not going to keep on going higher forever too. If we can't get in because of lack of decent pullback then there will be time to short it at some point. With each passing day that point comes closer where sudden market swoon is more probable.