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)

Another Waterfall Effect in Nifty Futures?

30 sec read

Waterfall Effect breaks the market when the price moves against the big momentum traders. which forces the momentum traders to liquidate their positions aggressively by creating an avalanche trigger. The waterfall effect can be explained through order flow analysis by analyzing the buyers and sellers commitment and their trade location.

We captured the Buyers and Sellers commitment during the last couple of days in Nifty Futures and brought the meaningful zones pictorially over the candles to understand where the current commitments are.

Sellers twice defended the commitment zone around 17300-17450 levels and back to back buyer commitment levels which formed on 15th Feb 2022 stood at 17316 – 17111 and 16870 – 16977 levels respectively. Price breaking 17111 decisively could trigger a waterfall effect as back to back momentum traders are positioned on the longs which could force the players to exit their positions.

So what could possibly go wrong?

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)

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