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Hello guys, I hope you are doing well. In this edition of our weekly market newsletter (Weekly Indian Market Outlook), I will cover the weekly Indian market outlook, weekly chart analysis of the Nifty and BankNifty, and weekly strategies for weekly income.
In the last few weeks, we saw very high volatility due to the Adani saga and the budget session. In this type of market, it’s very difficult to follow a system when you are dealing with continuous losses. But for me, my trading journal helps me a lot to follow my system in this tough time. That is why I strongly recommend creating a trading journal and reviewing it from time to time. In fact, this is the topic for today also.
The topic we discuss today is “Importance of trading journal in stock trading”
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Importance of trading journal in stock trading
A trading journal is a crucial tool in stock trading. It is a record of all the trades, strategies, emotions, and market analyses that a trader makes. A trading journal is an important part of becoming a successful trader and improving your trading skills. It helps you keep track of your progress, measure your performance, and evaluate your mistakes, thus avoiding repeating them in the future. Here, we will discuss the importance of a trading journal in stock trading and how it can help traders achieve their financial goals.
- Improving Trading Performance
A trading journal is an effective tool for monitoring and measuring the performance of trades. It will not only help you to identify your strengths and weaknesses, but it will also help you to evaluate your trade execution and make necessary changes to your strategy.
A trading journal is a record of the trader’s trades, including the entry and exit prices, trade size, and stop-loss levels. This information can be used to measure the profitability of your strategy and determine if there are any adjustments that need to be made to improve performance.
By analyzing this data, you can identify the markets, assets, or strategies that are working best for them and those that are not. They can then focus their efforts on the markets and assets that are producing positive results.
- Emotional Control
Emotions can be a major obstacle to successful trading. Fear, greed, and hope are the most common emotions that traders face. These emotions can cloud a trader’s judgment, leading to impulsive decisions that can result in significant losses.
A trading journal can help you understand and manage your emotions better. By keeping a record of your trades and the emotions you felt, you can gain insight into how your emotions are affecting your trades and make the necessary changes to your behavior.
- Developing a Trading Plan
A trading plan is an essential tool for successful trading. A trading plan is a comprehensive guide that outlines a trader’s strategy, risk management plan, goals, and objectives.
A trading journal is a valuable resource in developing a trading plan. By keeping a record of your trades and market analysis, you can identify patterns and trends that you can use to develop your trading strategy.
You can also evaluate your trade execution and make necessary adjustments to your plan. A trading journal helps you to stay focused and disciplined, as you are able to review your progress and measure your performance against their goals and objectives.
- Learning from Mistakes
Trading is a learning experience, and traders make mistakes. A trading journal provides traders with a record of their mistakes, so they can learn from them and avoid repeating them in the future.
By analyzing their mistakes, traders can identify the root cause of their losses and make necessary changes to their trading strategy. This information can be used to improve their risk management plan, to better understand market conditions, and to develop a more effective trading plan.
- Staying Focused and Disciplined
Trading can be a mentally and emotionally demanding activity. Traders can get distracted by news events, market analysis, and other traders’ opinions. A trading journal can help you to stay focused and disciplined by keeping you accountable for your trades.
By reviewing your trades and market analysis, you can stay on track and maintain your focus on your goals and objectives. A trading journal also provides you with a record of your successes and failures, which can be used to motivate and encourage you to continue on your trading journey.
A trading journal is a valuable tool for traders to achieve their financial goals. It provides traders with the opportunity to monitor and measure their performance, manage their emotions, develop a trading plan, learn from their mistakes, and stay focused and disciplined. By keeping a record of their trades and market analysis, traders can make informed decisions, avoid repeating mistakes, and continuously improve their trading skills. A trading journal can also be used as reference material to help traders make better decisions in the future.
Moreover, a trading journal can also help traders track their progress over time. By reviewing their journal regularly, traders can evaluate their performance and determine if they are meeting their financial goals. If they are not, they can make necessary changes to their trading strategy and improve their performance. In short, a trading journal is a crucial tool in stock trading that every trader should use to achieve their financial goals and become a successful trader.
In conclusion, a trading journal is an essential tool for stock traders who want to achieve success in the stock market. By keeping a record of their trades, strategies, emotions, and market analysis, traders can measure their performance, manage their emotions, develop a trading plan, learn from their mistakes, and stay focused and disciplined. A trading journal is a valuable tool that helps traders continuously improve their trading skills and achieve their financial goals. So, start keeping a trading journal today and take your trading to the next level!
In case you still facing any issues, whether it’s the psychological part or the execution part, I’m always there for mentoring through my Mentorship Program.
Weekly Strategies and Important Levels
This week, after a positive opening, we saw range-bound movements in Nifty and BankNifty. Both are trading near to resistance zone but couldn’t manage to close and sustain above the resistance zone.
Apart from range-bound activity in Nifty and BankNifty, we see good buying interest in midcap and small-cap stocks.
Nifty Reality and Nifty Midcap 100 were the top gainers, closing with gains of 2.2% and 2.1%, respectively. On the other hand, metals and commodities are the top losers, closing with losses of 2.2% and 1.4%, respectively.
Now let us look at the weekly chart of Nifty and BankNifty to find the important levels. You can keep these important levels on the radar for further levels in the coming week.
Weekly Chart Analysis of Nifty and BankNifty
Now let’s look at the weekly chart first to know the important levels:
If you look at the weekly charts of the Nifty and BankNifty, you will notice that they have been trading in a range for the past year. Although banknifty has given a breakout but couldn’t sustain and fall again in the previous range.
After a sharp decline, we saw a good recovery from lower levels but still, both the indices are trading near to their strong resistance zones and there is no sign of any fresh breakout from here.
For a weekly perspective, 18000 is the level you can keep on the radar for Nifty. Breakout from 18000 will trigger a fresh buying that can take Nifty to a new upside level.
For BankNifty, 41800 – 42000 is the resistance zone and we may see fresh buying above this level. I will trade with a range-bound strategy until we are not getting any fresh breakouts from the above levels.
On the downside, 17462 is the support level in Nifty and 39620 in BankNifty. Keep following these levels for the weekly trading plan.
Now let us look at the daily chart.
Daily Chart Analysis of Nifty and BankNifty
Let’s start with the Nifty chart first. As I shared in last week’s newsletter, 17559–17809 is the reversal zone based on the Fibonacci Retracement tool. As the chart shows, this is similar. Despite of highly volatile market, the Nifty couldn’t sustain below this zone. This can be a good sign for bullish traders.
Now should we place a long bet here? My suggestion is “No”. I still need some more confirmation. Only if the Nifty manages to stay above 18060 will I place a long bet on it.
For the coming week, if the Nifty breaks out from 18060, you can place a long bet above that level with a stop loss below 17800. Otherwise, trade with a range-bound strategy until Nifty does not give a breakout from 18060 or a breakdown from 17500. I will share my intraday trades and strategies on our Telegram channel. Join through the button below.
BankNifty has also hit the reversal zone, and we saw good buying from the zone. Now 41567 is the level where Banknifty is facing resistance.
Important levels to keep on the radar this week in BankNifty are 41567 on the upside and 40769 on the downside. If BankNifty manages to close above 41567, then we can place a long bet for the upside target of 42555. Below 41567, it may fall again till 40769.
Tip for the week: Personally, I believe that we should trade with limited risk range-bound strategies here. because there is no clear indication of a trend.
If you trade intraday and want to learn how I catch 300-400 points in the Nifty and 800-1000 points in the BankNifty, check out my small course where I share my intraday strategies with a trend following sheet.
Weekly Strategies for February 16, 2023
In the above section. We have analyzed the chart and found the range based on the chart. Now before we create any strategies, let’s look at the open interest data to check the range for the coming week for our weekly strategies in Nifty and BankNifty.
- Nifty Open Interest Analysis:
- The highest OI is at 18000 CE & 17800 CE. The support is at 17600 & Resistance is at 18000 for the coming weekly expiry based on the PCR rule.
- Max pain is 17800. Indicates expiry level.
- BankNifty Open Interest Analysis:
- The highest OI is at 41500 CE & PE. The support is at 41000 & Resistance is at 42000 for the coming weekly expiry.
- Max pain is at 41500.
Based on the OI data, the range is narrow, and the trend looks neutral in both indices. An increase in IV is giving us a good opportunity to deploy some credit spreads. I’m sharing the strategies that I deployed in my account on Friday. You can follow the data on Monday and if it looks fine, can deploy these strategies.
Weekly Strategies for the Coming week
Weekly Strategies in BankNifty
It’s a premium strategy that we are teaching in our course. You can see this strategy has a 70% probability of success for a weekly target of 4% return. For risk management, you can keep a stop loss of 30000 as an MTM loss, and we will make adjustments if there is a breakout or breakdown from our range.
I shared this strategy on Friday in my premium telegram channel. If you want early access to all the strategies, can join our premium telegram channel: Premium telegram Channel for Positional Strategies
I have shared the weekly strategy of Nifty and other premium strategies in my premium telegram channel. If you don’t want to learn through the course but need real-time alerts and updates about these strategies, can join our premium telegram channel.
If you want to learn these weekly strategies and their adjustments in more practical ways with live mentorship, you can enroll in our Option Strategies – A Mentorship Program.
Much Check this also-
- Deploying short strangle by looking at profit/loss at the payoff chart? – A must-read for beginners!
- Why is psychology important in options trading?
- 3 Simple Options Strategies for High Volatility
Post your comments in the comment box if you have a query related to this weekly Indian Market Outlook. You can ask any question related to options trading in the comment box.
If you need more real-time assistance on the Nifty and Bank Nifty weekly strategies or want to deploy these hedging trading strategies for monthly income, you can take our premium subscription, and you will get real-time assistance every month on these options trading strategies. You can contact us on WhatsApp.
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DISCLAIMER: We are not a SEBI research analyst. Views and trading strategies are posted in this weekly market newsletter only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders aware of the risk inherent in securities trading.