Let me briefly discuss about the channels in this post.
The channels are one of the most tricky tools in the hands of traders. Reason being they are made up of trend lines. And trend lines are dynamic support resistance levels.
Dynamic means that the S/R levels keep on changing as the price action proceeds on a time scale.
The trader has to play a bit with trend lines before coming out with a neat channel. I use to setup a midline in the channel to increase the accuracy. Normally we look for convergence of price action near the midline too.
Sometimes I wonder how these lines act as magnets and stock breaks strong s/r levels to achieve the magnet levels on the channel (on any timeframe).
We need to be careful when the price starts trading outside the channel. Sometimes it leads to an abrupt move in the opposite direction. In such situations there is no point keeping the channel trades.
I hope it all makes sense to those who r interested in technical analysis.
All the best.
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Trade closed: target reached
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Algos sold to the first Target :)
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It's good to sell as close to 590 as possible with a stop above 592 for a better rrr. Started is valid as long as 578 is not broken.
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I am short with 4point stop above 592. Let's see.
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Trade psychology:- Bank nifty's outperformance may kill this trade. But I am not worried as rrr is good for me. If I lose in this one I ll grab another opportunity somewhere else. At this point it's important to keep ur calm and follow the plan. It's just one trade out of 100s that I am going to take in a month or two.