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I bet no one taught you this!

  • Writer: Alpha Trader
    Alpha Trader
  • Apr 26, 2020
  • 1 min read

Sample this real scenario on the Daily chart of Asian Paints.

In October-November of 2019, Asian Paints was in a nice uptrend:


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Then as a good student of Demand Supply price action you observe price breaking the first and then the second Demand Zones!


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So the PA trader in you sees the opportunity to short at the Supply Zone from which price engulfed these DZs, and some of you from other pedigrees might even see this as a Price CAP asking to be Shorted !!


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But the clever PA trader in you wants further confirmation, so (s)he goes to a lower time frame to obtain. So as you go the lower 15 min time frame, you witness this price action as price enters the Supply Zone.


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No good DZs broken no CAP formed! You wait some more... Then you see this...


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Two DZs engulfed. Hurrray!! So now you have figured out the right Zone to enter short. You mark the SZ and place your entry order.


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You wait for the entry. Keep waiting patiently...


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Finally after so much patience you get the entry. Hurray!!


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Then after sometime Stopped Out!!


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So now what do you do? Take the Stop Loss and leave? Were you taught how to handle such failed CAP cases? No a Swap or Flip won't help here, that's not the way to handle failed CAPs. What do you do?

 
 
 

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