World Markets & Open Interest Intro
World Markets & Open Interest Intro
World Markets & Open Interest Intro
Trading is all about “Connecting the Dots” to interpret the market sentiment and putting that
analysis to action. Trading in the markets is all about looking at various market influencing
factors that we refer as “Dots” and analyzing them collectively.
So there are about 10 Dots that we suggest a Professional Trader must look at before taking a
trade. (Don't get disheartened by reading the number 10, your mind is capable of analyzing
much more than that, it just needs to be trained). The first Connecting Dot is of World Markets.
We will learn important aspects about World Markets by trying to answer these questions
So let's begin!
3. HANGSENG: HongKong. This index is second most important for Indian markets
in the opening hours. The reason is that Hongkong, like us, is an Emerging
economy and Global Investors for most of the time pump/extract money into
Emerging markets as a group. So whatever happens in the morning in Hansang
before our market opens can be a good indicator for our market.
4. NIKKEI: It is the benchmark index of the Japanese economy and is the earliest to
open as per IST. It trades from 5.30 AM in the morning.
5. DAX : Germany
6. FTSE 100 : United Kingdom
7. CAC 40 : France
6. Is there any specific time period when Global Markets become less significant for
Indian Markets?
This is a very important aspect to understand. Though for most of the times we will move
along with the Global markets but there would be times when we shall be highly
insensitive to World markets. These will be the times of important Domestic Events like
Budget, Elections, RBI Monetary Policy or any other important event of domestic
relevance.
As an exercise you can track historical correlation between Nifty50 and DAX and look for
convergence.
To prove the impact of Dow Jones on our Markets let us discuss the Trading Opportunities of
the day in which Dow had a major impact.
Morning Trade
The example is for Bank NIfty morning trade for 12th Jan 2022
To plan our Morning Trade we must look at the following factors.
1. Price & Volume Action
2. Open Interest of Previous day
3. Dow Jones Spot Performance of previous session
4. US 30 Futures performance before the Market opens
5. Asian Market Performance before our Market Opening
6. Pre Open Market levels of Bank Nifty.
As this is the first day we shall be discounting the impact of Open Interest as it is yet to
be discussed. But we shall discuss other factors
So on a daily chart we can say that the market is looking really Bullish.
Since the Bull run has been for consecutive 9 days there is some tendency of a pull back for
Profit booking at higher levels. However, opening a bullish up move is very much possible and
that's all we are discussing and interested about.
So today Price Action and Open Interest need to be further validated by Global market support.
Our Price Action and Open Interest point towards a Bullish scenario for the next day opening.
To further strengthen our view we must look at World Markets before our markets open.
Now we also need to take into consideration US 30 Futures to see the net impact of US
Markets.
So
DOW JONES SPOT : Bullish
US 30 Futures : Bullish
—----------------------------------------------
NET Result of US Markets: BULLISH
To make things simpler we have specially programmed AI drives algorithms that give you
Morning trade clues on OI Pulse under Morning Trade Strategy.
Let's take example of 38400 CE
So had you purchased 38400 CE till 435, you could have easily trailed till 470 levels in Opening
minutes only.
So this is how our Opening Trades played out and we guess the impact of Global MArkets is
also clear to you.
In order to understand the impact of DOW on intraday trading opportunities let us look at the
second trading opportunity of the day.
Trading Opportunity 2 and DOW JONES
At 13.54 today we had a breakout on the down side. This was mainly due to Profit booking.
Usually we wait for a second consecutive candle to enter in Put trade but we entered the trade
mainly because of the DOW factor.
Since DOW fell at the same time from its higher level we entered a Put trade and we could
easily scalp successfully.
Though this was a risky trade but with Dow on our side we took the trade and results were
positive.
So with these two examples I guess that the impact of DOW on our market is pretty clear.
We shall now be using DOW as an integral part of our strategy in upcoming days.