NIFTY & USD/INR Report 28th December, 2011

VIEW ON NIFTY

Nifty: Nifty yesterday after sideway opening at 4774 tested the higher level of 4804 where the 20 DMA resistance was seen at 4815 and on lower side after testing the lower level of 4725 closing was seen around the level of 4756. Today as the Asian market is trading flat to -ve nifty is expected to open around 4740 and will take support 10 DMA at 4702 and if trading is seen below 4702 will bring to lower level of 4640 and 4550 in near term. On lower side if sustain trading is seen below 4700 will open the door for 4660 to 4600 in near term, whereas on higher side resistance is seen at 4775. It’s not expected to cross the higher resistance of 4800 and till the time its holding the same selling at rise is advisable, where in medium term 4350 is the target which is 100% expansion of a- b from point c and can also test 3900 which comes to 161.8% in medium term. Stochastic has just nearing the overbought zone and if the resistance is taken at 4800 will turn -ve and will move back to lower zone.

VIEW ON RUPEE

USD/INR: Rupee yesterday closing was seen positive just above the resistance level of 53 per$ at the level of 53.08 and as expected is moving upside where we expect it to test the level of 53.5 to 53.8 in near term. Today opening was seen sideway around 53.05 per$ where some range bound move is expected where on lower side support is seen at 52.9 per$ and on higher side immediate resistance is seen at 53.4 per$ where till the time support of 52.8 holds buying at dips is advise around 53.05 per$ and will test 53.2 and above 53.2 will move to 53.4 in near term. In short term trading range bound to upside move is expected where it will move slowly to test 54 again and 54.5 in medium terms where buying at dips is advice in medium term for positional traders. Stochastic which has given positive intersection near lower zone which indicates price will rise side way to upside and higher target can be tested soon.

Report By

xDirect India

“Deal With Your Psychology Before Dealing With Your Money”

All About Trading Psychology

The Forex Market has exploded onto the scene & is the HOT financial market. People are trading in millions & making valuable profits too. This often leads us to invest & earn some decent profit for ourselves too; through Forex Trading. Thus, we sign up with a Forex Trader and have tried & used the DEMO Accounts being successful considerably.

Now, is The Time for Live Accounts?

Often even after going through a definite period of time dealing with Demo account we are unsure about the LIVE Account. The only reason for this unsurely behavior is the involvement of REAL MONEY. This in turn plays a great deal with our Psychology.

Trading Psychology:

A very less-spoken secret about trading is its PSYCHOLOGY which forms the most important element of any investment process. Trading Psychology is nothing but the state of mind of the trader while trading & its capability to control his empowering emotions.

 The only sure-shot way to successful trading is taking control of your Emotions.

While trading or at the beginning; traders are often gripped by common emotions of FEAR (Apprehensions) OR GREED (Sureness) depending how the initial trades start off.

Invariably, at all times of trading one should keep in mind that Losses are a common aspect of this trade. For successful trading, one not only needs to have sound technical knowledge & resources but should also have a broad spectrum about the trading business. A calm frame of mind often leads to correct decisions which in turn garner desirable profits.

There are types of Psychological myths & traps that if conquered upon; along with fundamental & technical analysis leads to expertise in trading.

Common Psychological MYTHS in the trading world:

1)     Holy Grail Myth: There is hardly any chance or luck in Forex trading as it is in gambling or placing bets. Simply because forex trading is NOT gambling. The trends are based upon the technical &fundamental factors & thus a strong trading plan will reap the boons.

2)     The Monday Effect-A very common myth, many traders believe that Mondays will follow the prevailing trend from the previous Friday.  Thus if the market was up on Friday it will prevail all weekend, come Monday it will rise again. Are we having Monday Blues? Probably. For Such trends have less to do with days & more with activity in the market.

3)     Expert Myth: It always plays a great support for our psychology to have an expert by our side during crucial decision-making times specially while involving Money! But, we must not forget even Experts are human beings & prone to mistakes. Its best, to understand the technicalities & well study the market before investing thus; letting the Expert be Ex-of your decisions.

4)     RUMOR DOESN’T HAVE IT:  It is a pre-requisite to keep a tab on world news & events that often leads to changes in the markets. But moreover, it is important to differentiate between the real news & the rumors; which are often planted by financial institutions in order to move the position of market.

Having done with the common myths which lead to a great disturbance of the Psychology, lets concentrate on the actual demons-“The Traps” which many often traders do fall prey to.

1)     Fear/ Apprehension/Despair: Losses usually lead to fright. This in turn can lead to inactivity in trading. The best way to overcome this is to use the “STOP-LOSS” orders. You cannot be afraid of a loss you assigned on your own.

2)     Greed/Super-Sureness: If or not it usually arises from making small profits, the trader starts anticipating more profits & thus invests higher amounts of lots, neglecting the initial investment strategy formed. Investor should focus on “Stop-Loss” & thus ensuring his capital before making or losing profits.

REMEMBER TO DEAL WITH TRADING PSYCHOLOGY

Ø      Trading is speculation which is all about taking risks in order to earn profits!

Ø      Assess your reason on market- Boredom/ passion/ way of life/hobby?

Ø      Invest only as much as you are prepared to Lose.

Ø      Do a thorough research of the Forex Trader you’ll be dealing with; in terms of Platforms, Spreads & Sales Support.

Ø      Market prices are NOT biased on your emotions & expectations. Thereby, stick by your TRADING STRATEGY.

Ø      Be Objective; Let your emotions take a backseat.

Ø       Market always gives occasions, so the one you lost won’t be the last one.

Ø      Trend is Your Friend – try following the Trend, it always works.

Ø      CONTROL is the synonym for Trading. Take control of Yourself, Your Emotions & eventually Your Forex Position.

Ø      Have a positive approach towards life, calm mind works best while taking trading decisions.

Thus, for a successful trader, it is always better to 

Deal with your Psychology Before Dealing with your Money!!!