Nifty & USD/INR Report, 23rd May, 2012

Daily Nifty Analysis

Nifty Analysis-23.5.12_xDirectIndia

Indian markets settled on a lower note as rupee tumbled to an all time low amid fears of slowing economic growth. The market opened positive tracking the US markets which closed in the green yesterday with Dow Jones up more than 1%  on  Monday.  The  rupee nevertheless recovered slightly in the morning at 54.6025 after breaching the 55 mark in yesterday’s session. The upside on the Indian Rupee should be now matched with the US Dollar strength that rose up to 16-month high. The 100 points fall in the Nifty is now going to take its toll further, as importers demand for US Dollar increases as month-end nears. Unless the government does not take necessary stance to
cut down on its subsidy burden there will be demand on the US Dollar considering its strength on the board. For today markets are to remain under pressure and thus may trade on sideways to bearish mode for today.

Nifty has its immediate support at 4804, a breach of which would test levels around 4765 (Low of May 18th, 2012). Resistance should be maintained 4840 and then 4885 and only a close above levels of 4885 should be considered as a meaningful correction in the indice.

View on Indian Rupee

USD/INR-23.5.12_xDirectIndia

The Indian Rupee opened on a positive note yesterday trading near the 54.65 level (against the US Dollar after the central bank introduced measures preventing banks from taking large positions in currency exchanges. Though the
optimism was short lived, it tumbled marking another day of record –low levels closing at 55.39 against the US Dollar. The home currency fell to touch an intra-day low at 55.47 as traders sold the INR owing to reeling growth problems in the domestic economy coupled with rise in the Dollar index.

Intra-day Outlook

Spot USDINR: In the domestic space, the Indian Rupee is expected trade in a narrow range post the persistent losses in past few trading session, with bias still on the weaker side. Volatility is seen continuing on the higher side wherein gains may come only if some concrete steps are taken by the RBI or the Indian government

A certain downside could be witnessed in the pair, where its initial support at 54.60, is well kept; the pair now holds its upside resistance of its bullish trend channel dated from March 8th high of 50.29 at 55.82 hence a breach should form it towards 56.25 and then 56.68 (Fibonacci extensions). Support of 54.60 is not held then wee may see a correction towards 53.95 levels in today’ss session.

Report By

xDirect India

www.xdirect.in

“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!!!