Sunday, 23 July 2017

Swing Trading Setups 23072017

1) AXISBANK:  It has broken out of 4 month long consolidation.  Seems prices are getting accepted above BO level.  Now two ways to enter in this stock.  One, buy above 544.20 or on pull back at 535-530 area.  SL below 500 and targets 580-600-613-638.

2) DRREDDY:  Seems poised for a big breakout above 2780.  Trade this breakout whenever happens for short term gains.

3) ITC:  It is now pulling back to its earlier breakout level. It can be bought in the region of 270-285 with SL 255 and short term target 320-340-355.

4) COALINDIA:  On weekly chart, it has taken support at 4 year old level and reversed.  It can be bought at CMP of 262.35 keeping a SL below 238 targeting the level above 300 in the short term.

(This post is for educational purpose only demonstrating application of price action trading concepts to real time charts.  It is not a buy/sell recommendation in any form.)

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.

Here are the trades that I ended up taking this month so far, click here.

I not only trade for myself in stock futures but also share setups with precise entry and exit levels in advance so that other traders can also trade in them along with me.  I don't just stop there.  I go one setup further and help them better manage the trade to maximize profit.  Also if someone is really interested, can even learn all the tricks and methods of trading from me.

I hope every reader of this blog will appreciate my genuine and honest endeavor to make intraday trading profitable for everyone.

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.

Thursday, 20 July 2017

Patience makes money

Today I want to emphasize the need for patience, time and emotional construct for making money in the stock market.  There is no denial of the fact that longer we are able to hold the trade, more the possibility of making money from it.  Once we take the trade, we need to give it enough time to move and patiently wait for that move to occur.  Not allowing enough time and exiting early with small profit will never make money in the long run.

I share with you real time trades taken in AXISBANK Future and MARUTI future today as an example.  It was possible for us to enter at the right level.  After the entry both the trades immediately started to move in favor and rewarded handsomely in a very short time.  Exits were made at the predefined target levels.  However, I must say that both these trades had the potential to make the profit of Rs. 22600 in a single day from one lot if the trades were allowed maximum time, i.e. till close of the day.  Here are the charts,

One important thing to note about these kind of perfect trades is that they never test the entry level for rest of the day.  Also these trades most likely will move in one direction only throughout the day, i.e. type 1 trend day.

So whenever we realize we have taken a perfect trade like this, we just need to sit tight, wait patiently and allow it enough time to move for maximum profits out of it. 

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.

Sunday, 16 July 2017

Followup on stocks

In recent past I posted few stock charts with my analysis.  This post is just a follow up on that.

1) Hind Petro:  It was analyzed in post anticipating breakout.  It moved perfectly as expected and within two days reached target price of 390.  This is the power of anticipating breakout and getting much early into the trade.  Now if it starts to get accepted above 390, it can go much higher.

2) Lupin:  It was a sort of catching the falling knife, but it worked well.  Read here.  It also moved as expected and reached target.  Now the next level to watch is 1250 as marked on the chart, provided it is able to hold its recent low.

3) Reliance:  I analyzed this stock in detail in September last year.  Read it here.  At that time it was around 1100.  It did test the patience but once it started to move, it did not look back and now it is trading at 1533 and moving towards 1600.

This is the power of price action trading.  Once you learn it and master it, you will be able to trade not only for intraday gains but also for short and long term gains like this.  There will be no boundary or restrictions of trading like trading time frames or trading instruments. Trade any time frame, any instrument, any market in the world.

Saturday, 15 July 2017

Zero Risk Option Trading Strategy for BATAINDIA

Today I am sharing with you zero risk or very minimum risk and high reward option trading strategy for BATAINDIA stock.

Lets first have a look at its chart and try to see what exactly is going on there.

As you can see, prices are range bound between level 590 and 510-520 since May 2017.  If we expect the prices to remain in this range in near future, it is possible that prices will now test lower range extreme, i.e. 520-510 level after getting rejected from upper range extreme of 590.

With this information, now lets create a option strategy to benefit out of this price move from CMP to 520-510 level with very minimum risk or zero risk.

Bear Put Spread:
The option strategy is bear put spread where we need to,
SELL 1 lot of current month 520 Put @ 1.10 and BUY 1 lot of current month 530 Put @ 1.15.
Here is the snapshot of this strategy with expected profit/loss potential.

As you can see, with this strategy the maximum expected profit is 9700 to 10900 and maximum possible loss is 1155 on or before expiry date which is just 12 days away.  Risk reward of roughly 1:10 or potential return on capital of around 10% in next 12 days.  Isn't it just amazing?

Capital required for this strategy is around Rs. 90000 (less than 1 lakh).

Now if you do not want to take the risk of Rs. 1155 and want to make it zero risk strategy, you can buy 37 shares of BATAINDIA at CMP of  558.  So if the prices go to 590 level instead of 520 the loss of Rs. 1155 will be taken care of gains by the shares that you buy (37*32=1184 at 590 level).

Only issue here is the liquidity as very few option contracts are traded in this stock at those strike prices.

Let's observe this strategy, how it performs in real time till expiry date.  If it works well, we can try it on more liquid stock options.  I will update all of you again after the expiry and produce the final results of this strategy.

Your views and suggestions are most welcome!

(please do not trade with this strategy.  It is for learning purpose only.)

Thursday, 13 July 2017

ITC - Perfect Intraday Reversal Setup

Today in the morning session I spotted a very good reversal setup in ITC.  I thought about sharing this with all of you.  I have marked all important price action in the chart.  As you can see, prices were in down trend for last many days and today made an attempt to reverse the trend.  I traded it but unfortunately it trapped me hitting my small SL and then moved in favor.

Apart from this, this week is turning out to be a super good for stock trading.  Have a look at this month's trade performance thus far,

Party is out there in Dalal Street.  Hope you all are enjoying it!

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

Short term trade setup in Lupin

Have a look at Lupin daily chart above.  It has been in a strong down trend for a long time, but the volume and price action of last few days indicate it is refusing to go further down. Today a very strong bullish candle has formed with significantly high volume which further indicates big buying in the counter at lower levels.  So now it seems like the time has come for the Lupin to give at least a sizable bounce from here. It can be bought at around CMP of 1084 with SL at today's low of 1036 and target close to 1180-1200 in a couple of weeks.  It is a good 1:2 RR trade setup.  Let's see how it pans out.
(This is for educational purpose only.  It is not a trading idea or any kind of advice.)

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.