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Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Building GenAI Applications. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, 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. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

How a Trader should view TRIN readings

1 min read

Many of our readers requested how to trade trin. Here is an extract from “Mastering the Trade – John.F.Carter” about his knowledge on TRIN. Most Educational material on “How to use the Trin”. tell traders that “over 1.0 is bearish, so consider shorting and under 1.0 is bullish so consider buying” That statement is annoying and misleading, and it brings me to first rule when to use trin

I dont care what the current reading is

I only care about the current reading in relation to where it has been

In other words what i care about trin is not the trin reading itself. but the trend of the trin. A reading of 1.5 might seem bearish, but if the reading of the day started near 2.0 and we are now an hour into the trading day and 1.50 is the low, this is bullish. This means that volume is flowing into advancing issues and that there is a sustained buying pressure in markets. Conversely a reading of  0.85 might seems bullish, but if the reading started the day at 0.45 and we are now an hour into 0.85 is the high this is bearish. This means that volumes are flowing into declining issues and there is a  sustained selling pressure in the markets.

If the trin reading is trending higher and making higher highs on the day

I will ignore all the long setups

If the trin reading is trending lower and making lower lows on the day

I will ignore all the short setups

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Historical 10 day SMA of trin values indicates that anything above 1.5-2  indicates Heavily oversold levels where bounce back is possible towards 1. When 10 day SMA of trin starts dipping from such oversold levels we can safely assume that short covering gonna take place.

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www.marketcalls.in
Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Building GenAI Applications. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, 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. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in
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2 Replies to “How a Trader should view TRIN readings”

  1. Thanks a lot Rajandran, for this valuable post. U really rock.Regards,Indrajithttp://www.stockmaniacs.blogspot.com

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