Decision Point Trading (DP Trading)

Decision Point Trading (DP Trading) is a trading method in which our trading decisions are based on the price behavior around certain decision points. These decision points are created by the market structure itself or prior day’s important price levels. Price is the ultimate truth. The basic premise of DP trading is that price is always in ranges; even when price is trending, it is seen as moving from one range to another.

DPs that we consider for our trading are:

• BRN (Big Round Numbers): Price points like 10100, 10200, …11300, 11500 and so on
• PDC: Previous Day Close
• PDL: Previous Day Low
• PDH: Previous Day High
• IRH: Initial Range High
• IRL: Initial Range Low
• Range Highs
• Range Lows

At these decision points we try to look at the price behavior and based on it we make our trading
decisions. Price can act in the following manner at DPs:

a) Breakout Failure (BoF): Price breaks out the decision point (range extreme) and falls back to the
earlier range
b) Breakout PullBack (BPB): Price breaks out the decision point(range extreme), reverses, and
continues in the direction of breakout
c) Direct Breakout (BO): Price breaks out the decision point (range extreme) and continue moving
in the direction of the breakout

The above three are the basic price patterns, several variations of them have been observed and
practiced, like TST (Test of S/R, Complex Pullback, Failure of BoF etc.

This method was introduced by Nifty Nirvana aka SmartTrader aka Niranjanam aka Rajesh through his blog, niftynirvana.blogspot.com. All credit to him for developing this wonderful methodology and make it publicly available. Development of DP method of trading is inspired from Lance Beggs (Your Trading Coach).

The resource booklets can be downloaded from the following link:
http://niftynirvana.blogspot.com/2013/12/download-e-book.html

Daily my analysis and trades based on DP method of trading are posted on twitter handle 'ForNifty' (https://twitter.com/ForNifty)