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)

Nifty Futures and Where the Buyers Commitment could go wrong?

1 min read

The last two trading days (9th Feb & 10th Feb) of Nifty Futures buyers provided a significant volume commitment. So what is so important about the volume commitment from the buyers and where have the volume commitment happened?

What is a Volume Commitment?

Volume commitment is a trade location where more aggressive participants enter or strong absorption happens which brings the trend to comes to an end.

How to use Volume Commitments?

One can consider using Orderflows to measure big deltas and cumulative delta gives a clear idea about the overall commitment for the day.

Smart Money Commitment

Volume commitment happens with smart money and very often comes at an extreme impulsive phase when huge panic is observed in the markets. Interestingly most of the smart money happens when the markets are bottoming out / intermediate bottoms.

Momentum Traders Commitment

At times momentum, traders do big positioning by creating aggressive price action and in certain cases, big speculators create aggressive positioning with strong volumes however the commitment is not guaranteed and such kind of trade location where the price going against the positioning zones usually leads to larger liquidations aka waterfall effect!

Nifty Futures Volumes Commitment Zones

The last two trading days (9th Feb & 10th Feb) of Nifty Futures buyers provided a significant volume commitment around the zones 17330 – 17430 levels and 17491 – 17602. If Price breaking such levels in a very short term could indicate the more liquidation odds in a very short term with a kind of waterfall effect.

Waterfall effect post breaking buyer commitment – updated on Feb 15th, 2022

If you are a price action trader you know how important the volume commitment plays a major role in tracking the market context via volume. Volume commitment is one among them.

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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