1. Date 23-May-2012
2.Market - NSE Nifty Futures Contract
3.Amount committed - 2 Lots of Nifty Futures
4.Why did you do the trade
Formation of Bullish engulfing pattern at 4800 confirmed the support formed by previous bullish engulfing pattern at same level .Target of more than 100 points confirmed risk reward 1:5 .Bullish engulfing pattern: - lowest low of two sessions near to 4800 can be used as protective stops.
Typically correction end at 78.6% and bullish reversal of stochastic reveal the long trades.
Formation of bullish engulfing pattern in 60 min chart and morning star in daily chart confirmed the long trade.
5.Entry price- 4810
6.Risk - 20 points
7.Initial Target - 4920 and 4950 are first two targets
8.Exit Price -
Bearish engulfing pattern 5020 and Trend Line break 5010 were early indication to exit or book some profits.
9.Analyze the trade -
I dumped the 1 lot at 4890 because of minor resistances at that level. After that , 1 was left with 1 lot . Market gave signal of profit booking at 5010 level (spinning tops formation) in daily chart. Trend line reversal was another signal to book profit.
Exited another lot at 4882.25 ,trailing stop loss between between 3 sma and 12 sma.
10. Postmortem -
Made a mistake by trading with 2 lots of nifty futures. If Risk Rewards (1:5) is favorable always trade with 4 lots. If Risk : Reward is like 1:4 and 1:5 ,trade with 4 lots.
