Important
notes :
1) This site is for education purpose only and no liability should
be assigned to this site or its owners for any profit or loss that
one may incur based on studies published on this site.
2) The method that is under discussion above is based strongly on
ATR (Average True Range), which is formed in accordance with the
tops & bottoms formed during daily trading sessions. A low is
formed when sellers do not want to sell any more. A high is formed
when buyers want to buy no more. A trading range is formed thus,
and a moving average of a number of sessions forms the ATR.
3) This study also assumes that both the Bulls and the Bears try
to stretch this trading range in their favour and that in such a
stretch there are zones where they both get "tired" and
infliction points where both get "charged up"
4) This study suggests that one should buy when the Bears get weak
(i.e. in the Buy Zone) and sell when Bulls get weak (i.e. in the
Sell Zone) with a Stop loss of breakdown and breakout points respectively.
5) If niether of these zones are reached within a particular trading
session, then the study assumes that the Nifty is "consolidating"
and suggests one to not open fresh positions, but continue to hold
positional longs or shorts as the case maybe.
6) This study also advises the above method to be used in conjuction
with other trend identification tools like ADX RSI MAs etc.
7) This study does not purport to predict the levels on the Nifty,
but only indicates probable moves when particular levels are reached
or breached.
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