CRUDE ONLINE TRADING AND ROLE OF ATP(AVERAGE TRADED PRICE)
in MCX TRADING
Average is generally weighted average of high and low of that period.
Period may be a day,week or a year.
If some commodity or scrip maintaining above ATP, then it is said strong in buy side.
& If it slips below average, then becomes weak (selling)
say CRUDE was running today near average5720.
after some struggle, it came up fairly up above 5720 with increasing buyers.
Then 2 options are possible for trading-
- buy crude@5728 sl5719
or
- buy crude jun & sell crude july – stoploss 8 pt both side.
Hedging gives us support till clarity.
Generally 40-50pt stoploss in crude is given by tippers all over india.
If you are hitting 16pt both side sl in a very bad day,
then you will get 3 fair chances in same50 pt risk.
and it’s not possible to hit 3 stoplosses consecutively, if you are entering@6.15/7.15/8.15pm.
Now crude went up to 5790. average is still 5732.
It is 50-60pt above average,
Then it is often seen that scrip slip to average once,then bounce back again( only if data supports
So what should we do here@5790?
book once buying profit.
then sell @5790 sl5800
or buy jun crude & sell july crude again with 8pt SL bothside.
This ATP phenomenon may be seen in other scrips too.