Monday, 31 July 2017

Wednesday, 26 July 2017

Nifty @ 10000

A historical day.  Congratulations to all investors and traders.

Traded Nifty Future today once it comfortably started trading above 10000 level which yielded some.

Friday, 21 July 2017

This is how my day starts for stock trading

Here is the screenshot of my terminal which I use to screen stocks for trading in the morning session. This is just to give you an idea what kind of screen or charts that I keep looking at during the day.   No AFL or fancy charting software.  Here I just try to keep all the information like Nifty level, number of advancing and declining stocks, intraday and historical charts and cash and future stock watch lists, in one single screen.

I start my day at 8 o'clock in the morning by watching TV for potential news flow and its likely impact on the stocks and sectors.  This will give me a list of stocks and sectors where I can expect potential price moves because of news. At around 8:30 am I will start my PC and set up the screen.  I will then go through short term and long term charts of around 50 stocks that are in my watch list and mark the levels.  I will also spend some time analyzing the Nifty and Bank Nifty charts and big picture.  Now around 9:10 am I am ready with my homework and trade plan.  I am aware of the news flow and technical setup of the stocks.  I then just wait for the market to open.  Once it starts to trade, I keep going through the charts one by one looking for my kind of setups to trade based on price action.  For example, today I could spot a good setup in ASIANPAINT.  It was breaking out some sort of consolidation at the open in expectation of good quarterly results that is going to be announced on Tuesday, 25th July.  It gave the profit of Rs. 5600.  Here is its intraday chart,

In short, it requires me to start my day at least an hour early so that I can start trading once the market opens.  It is not like I just come to screen at 9:15 am and start to trade.  It requires to do all the planning and be aware of current market trend, sentiment, news flow, volatility and technical setups.

My charts are always clean.  There are no indicators or moving averages.  Only price and volume are there on the chart.

Once the potential trade setup is found, it again requires to put trend, sentiment, news flow, volatility etc together and make final decision to trade.  After making the decision to trade, again it requires to patiently wait for the setup to trigger and enter at proper level.  If it does not allow to enter or does not trigger, need to find some another setup.  So this is how the cycle repeats and I normally end up taking 2 to 3 trades in the morning session.

Nifty Future 21072017

It opened within previous day's range and tried to break PDC but failed.  This gave a nice BOF setup to go long as marked.  This moved well.  In afternoon once the prices started trading below BRN and PDC LOD was not able to hold the prices, a short was possible as BPB of PDC LOD.  This also moved well.  After that V shape reversal happened which was difficult to catch.  Once the prices got accepted above PDL, a long was possible as BPB of PDL which also moved well.

Today it was a bit volatile and hence generated good number of setups to trade and benefit out of the volatility.  Hope you all enjoyed Nifty trading today.

Wednesday, 19 July 2017

Nifty Future 19072017

It traded in a narrow range for most part of the day and once it broke out of PDH BRN, presented a BPB setup to go long which moved some.

Monday, 17 July 2017

Nifty Future 17072017

It opened full gap up and traded in a narrow range.  In afternoon it did break out of this narrow range but lacked momentum and traded in another narrow range.

I have always believed in following the markets and doing what markets want us to do.  I cannot make myself handicap by trading Nifty alone.  As a full time trader I cannot depend on trading only one instrument for my living.  If Nifty does not give a good opportunity to trade why should I blame the Nifty?  Rather I should try to find other trade opportunities elsewhere.  Stocks are providing plenty of setups everyday and very good trade opportunities.

Today I traded in stocks like TECHM and TCS in morning session and HCLTECH in late afternoon which made me more than Rs. 9000 per lot.  If I had decided to trade Nifty alone and never explored stock trading possibility like this, I probably would have ended the day without earning a penny.

If you want to excel in trading, never depend on one or two trading instruments.  You have to have plenty of choices to trade.

Wednesday, 12 July 2017

Anticipating breakout (Ant. BO)

You would have probably read about lot of different strategies to trade breakout and you might be trading these breakout strategies.  The problem with trading the breakout is that most of the times these breakouts fail and we keep wondering why the breakout failed.  Even if the breakout is successful, sometimes it may jump the order while breaking out when the prices move sharply with momentum, keeping us away from the good breakout.  These issues forced me to look for a better alternative strategy to trade the breakout.  Now let's discuss it.

Normally once the prices start to form a range, traders tend to look to trade that range whenever the prices break out of that range.  Some traders will even wait further, they will wait for the prices to break out, then confirm this breakout and upon confirmation of successful breakout they will enter into the trade.  The below picture explains this,

In both the cases above, traders tend to enter into the position upon breakout only at higher levels. This strategy of entering into the breakout works wonderfully whenever there is good momentum behind the price moves.  If the momentum does not support, the breakout will likely fail.

We can also devise a different, yet effective strategy to trade the breakouts.  In this strategy we can try to enter at lower levels, much ahead of the breakout, in anticipation of breakout (Ant. BO).  Like this,

Once a good understanding of markets, trend and price reading skill is developed, it is possible to enter into the trade like this in anticipation of breakout.

Another method to buy at lower levels and sell at higher levels in anticipation of successful breakout is to first wait for the range to develop. Once the range develops, wait further for the BOF (breakout failure) at one extreme of range and then enter upon failure of breakout.  Mostly, failure to break one extreme of range often leads to successful break of other extreme of range.  Like this,

Now lets have a look at couple of live stock charts to further understand the strategy discussed above.

It is the chart of KNR Constructions.  As you can see, it did provide 3 opportunities to buy once the range started to develop in anticipation of potential breakout of 216 level.  One can still trade this stock if prices start to get accepted above 216 level.

Here is the chart of HindPetro.  It also gave couple of opportunities to buy on BOF of range low.  One can expect the potential breakout of 390 level in near future.

Now here is the chart of Bank Nifty Future where I tried to trade ahead of breakout, in anticipation of potential breakout.

Hope you would benefit from this post and Ant. BO strategy in your trading, especially while looking for potential breakout.  With this strategy you will always buy at lower levels and sell at higher levels, a much better way to make money.

(please share this post and blog in your circle)

Friday, 7 July 2017

Wednesday, 5 July 2017

Nifty Future 05072017

Today the range got narrowed.  There were two setups as marked.  One worked but another did not. Prices broke out of the range ultimately but very late.

Tuesday, 4 July 2017

Nifty Future 04072017

After a trend day yesterday, it was expected to remain range bound and it did remain range bound.  First setup was BOF of PDH which moved well.  Second setup was BOF of BRN which also moved well.  This kind of slightly broad, tradeable ranges are fun to trade with DP system.