1-2-3 over!!!

(comments from discussion on trade 3
http://www.mudraa.com/singlepost.php?messid=76185)

dear sim,

this golden rule

that market forces can't change direction

more than 3 times in a day

is more or less an empirical one derived primarily from observation and experience.

as i said, market forces can't change direction too often and too quickly.

otherwise it is not the change of direction, but vibration.

i would like to picture the market forces more like an elephant than a deer!

(rather, a trader is a deer)

and we rarely see an elephant go round and round except when mad.

first decisive direction can be deemed to have been taken

when the price breaks the boundary it marks for itself in the first half hour or so.

the second direction may not be taken throughout the day

if a strong trend is there.

otherwise, the second direction is likely.

this second direction generally is the last one of the day

except when the markets are range bound

with high participation

with bags of money

raring to go

like bulls after red!!!

during trends

second direction is generally strong.

but the second trade hardly leaves any time for the third one!

third one happens only when second one fizzles out.

but the third one is rarely big.

by that time

'law of diminishing returns' come into play

both the hunters and the hunted are tired.

hunters have their belly full

and the hunted want to escape with life!

Obviously, there is no room for the forth shot!