CAGE STRATEGY –
Most ignored fact of the market is
Market movement is rangebound for 75% of total time.
That’s why it is difficult to wait for remarkable move in screen.
80% movement happens in 20% time.
So moves are sudden & sharp. You may be watching screen from 10am to 5pm and waiting for movement.
you took a tea break from screen for 10minutes and found that silver has gone up by 1000pt in last 10minutes.
So minute to minute watching is not the solution.
We need stratagy.
CAGE – We are catching the trade like a mouse trapped in a cage.
Silver was falling down last week. It went 38800 from 42000.
Now it is risky to sell in bottom & tough to buy after seeing such free fall.
say on that day low was 38550 & high was 39200.
So we put a stoploss BUY above high and stoploss SELL below low.
Bcoz movement in any direction will be very big & spontaneous.
Silver suddenly bounced back on friday28 jun.
It was in tight range from 38600-39000 since last 6hrs.
It went 39400 in 5 minutes.
Many trader couldn’t catch it.
If you see 500 pt up in 5 minute, you wait for deep as a general habit.
but such bounce back after 3-4 days free fall never give chance for long thinking.
It went 40100 in next 10-15 minutes.
So our trap worked in buy direction and we got profit automatically.
If it would have gone in sell direction, we have got the same profit in that case also.
Some times high is very far from CMP, Then you can place stoploss BUY ABOVE AVERAGE.
Practice this with mini & micro lots daily. Sometime it may open buy side and then suddenly came down to open sell side. Position will square off causing losses .
Timing is important.
Do it after 5pm now a days.
Keep observing screen and see the changing timing patterns.