Tim Morge,the expert trader ,(www.marketgeometry.com) from whom I have self learnt the method of using median lines,explains the way in which the market map is drawn and area of confluence of supports and resistances are identified.His motto is to be very patient, to identify an entry point with the smallest risk and entering the trade only after price action confirms the test / retest of the lines.He teaches how large institutional buyers , the Whales wait to "gobble"up the small fish at previous supports and resistances.The first instance of a breakout, one see's a rush of buyers / sellers ( upside/ downside breakout ) to enter not wanting to miss the momentum.But , many instances it is seen there is a pullback to the earlier breakout point ,dropping off the breakout traders, pulling out their stops.and continues with a small consolidation or range bound movement.The breakout of this range / consolidation gives a better entry point and confirms the change in behaviour / trend in the particular timeframe.
Attempting to map the Nifty's recent price action with a Multipivot median line - this is another tool in the median line method.( drawn it on a 30 min chart so that my 60 min chart studies can be maintained).The breakout of the stiff resistance gave a rally to 5200 levels.How will Nifty move on from here? What are the probable trades possible within the existing market structure.Here is my take...
