Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Cardinal Rules for Short Term Traders – Market Profile Tutorial

1 min read

If you are short term derivative trader using Market Profile then here are some of the very important cardinal rules which could help traders to take better trading decisions

1)Never fight against the short-term/Dominant traders(Smart Traders) unless things are getting emotional (Poor Structure, Spikes, Emotional News based Seling, Stealth Auction, etc.,)

2)Never hold the positions in the same direction for too long if the trading inventory is getting long to too long or short to too short.

3)Never Average your trade on the losing side.

4) Never fight against the high confidence buying/ high confidence selling unless things are getting too emotional or Never fight against the trend unless exponential trading odds persist.

5)Use Hedged Futures/In the Money Options for directional high conviction bets.

6) Trade At the Money or Out of the Money options when things are getting super freaky/super emotional and where the majority of the crowd is expected to take the same side and where the crowd is likely to go wrong.

7)Avoid ATM/OTM options in regular low volatile markets for positional trading

8)Use Credit/Debit Spreads during low volatile markets (e.g during falling vix and falling ATR situations)

9)Never start the week without Top Down Analysis. Start the week/month with both direction and volatility analysis. Frequently check the ongoing volatility.

10)Stay Away from reacting to ADR/GDRs, SGX Nifty, Huge Premium/Discounts, World Markets, Crude Oil, or Fundamental information. Markets may react to these pieces of information in a very very short term momentarily however markets have minds on its own. And has short-term memory loss to such information.

41)Give More Importance to Acceptance of Short term reference levels as it reflects the change in trend.

12)Go neutral on Weekends and Go neutral if you really don’t have any idea what is happening

13)Try to do chunking when visual references are on both sides and plan to execute trades one step at a time, Stay away from trades in case still, a strong dilemma persists or until one side of the references
gets cleared.

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

TradeZilla 6.0 – Intensive Mentorship Program on Market Profile,…

For traders who want to gain expertise in Market Profile, Orderflow, Market Microstructure, Options Trading & Trading Systems we are running 150+ hours of...
Rajandran R
6 min read

Cardinal Rules for Short Term Traders – Market Profile…

If you are short term derivative trader using Market Profile then here are some of the very important cardinal rules which could help...
Rajandran R
1 min read

Bank Nifty Futures – Market Profile Charts and Overheated…

Bank Nifty Futures - Market Profile Charts and Overheated Emotions - September Series
Rajandran R
18 sec read

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More