Choppy Markets are not a downtrend.

One down day in the Nifty and TV channels have started calling it the ‘end’ of the bull run. If we have one more down day (we could!), analysts will start proclaiming that the markets had run ahead of themselves and a sharp correction may be coming.

I have often wondered if analysts have ever done any systematic and disciplined trading in the market. Many technical analysts disappoint me, when they speak on TV. I regret to write this, but this is true. It seems that the analysts have read a few technical analysis books and become experts. The basis of trading lies NOT in chart patterns or indicators, but in probability.

If you want to become a good trader, read easy to understand articles on probability. The web will have many of them.

Markets are random most of the time. Sometimes, there is a window of opportunity that opens up for the patterns that you trade. In these periods the probability of success goes in our favor. When the windows open up, the probability is in our favor, but there is no certainty at all. We cannot predict what markets will do in the next minute, then how can we predict what markets are doing in the next few days or weeks?

My point is: the Nifty is probably entering choppy areas. Life time new highs are NOT bearish. We have no idea of what the markets will do in the future, so we follow the trend assuming that the trend has more chances of continuing than reversing.