Support Vs Resistance Study

Support is basically a zone or level from which a stock bounce back and tries not to go beyond that level.

There could be different reasons for the same and generally it is said that buyers become active at this level and a significant buying supports the stock from going below to this level.  As buyers finds the price attractive at this level and believe that the stock at its best position.

Resistance is a level or zone from which, stock starts loosing its value or starts a downtrend.

Stock reaches at this level and starts coming back towards support again, as sellers are active this area and found the stock costly or overvalued. Hence traders starts selling and resulting of same the stock shows downtrend.

Support and Resistance zones are basically used for doing positional trading. There are different stocks, which are used to be in a range and stay there for long periods even for years.

For e.g. ITC is a perfect positional tading stock and stay in the range of Rs. 270.00 to Rs. 310.00. However there are different stocks which remain in the same zone even for very short period of 15 days or one month.

For more please visit our website www.mynsetrade.com

BOOK LOSS: INTRADAY OR CONVERT THE TRADE IN DELIVERY?

Hello ! Here we are discussing one of the biggest mistake one rookie trader do in his innocence or in fear of Loss booking. Let us discuss a situation, we bought 100 scrip of India Bull Housing Finance on 03.06.2019 @ Rs. 814.00 for Intraday with a Target of Rs. 825.00. As you found that after taking trade it sustains around the same level and then starts going down afterwards. After some time, your trade starts showing losses and goes as low as Rs. 790.00 level.

Now what will you do??

Decision 1 : You will book the loss and close the trade.

Decision 2 : You will convert your Intraday Position to delivery.

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STOP LOSS : NEEDED OR NOT??

Prime function of SL IS “PROTECTING THE CAPITAL”.  If one is capable of making good money management, then market can never be able to put you in loss. Definetly, there will be days, when you close your trade in loss, but at the end of a week/month/year you will remain in profit. SL helps you in booking small loss instead of book a huge loss. Yes, you here it right, booking a loss. You have to respect the market and its all decisions, you can never go against it, so respect it decision, if it is giving you loss, that should be fully respected by us and book it. Don’t try to resit it and make it a matter of ego, that you can never in loss or your trade setup cannot be fail, even you select it as per market trend and take the trade accordingly.

Here, we discuss some methods to put SL in Intraday trade:

A ) Multiple stop loss rule for Intraday:

If 3-4 stop loss hit occur in single day trade, don’t go for another trade.

Reason : Considering SL to Target ration as 1:3, hence forth if 3 trade hit SL then loss will be x+X+X=3X

And if 4^rd trade hit the target, as per ratio of 1:3, therefore profit will be 3X.

Henceforth loss of first three trade i.e. 3X will be managed by fourth trade viz. 2X.

B) Multiple SL type II: Generally we find the resistance of support zone, instead of a point, hence if you able to find a zone for your SL, then you should put SL lot wise. For e.g., if you buy 100 scrip, you can put the SL by 50 scrip first, then 30 scrip and at last 20 scrip. Sometimes it helps to hit your SL to be hit by the tail of the candle.

For more information, do comment or visit our website.

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look at the chart for a quick understanding

INTRADAY TRADING CONCEPT

Intraday Trading as the name suggests itself that Buying and Selling the scrip in the same Day.

For e.g. if you buy Ashok Leyland 100 scrip in the morning at 11.30 a.m. then you have to sell it before the close of the market hours I.e. by 03.30 p.m. irrespective that you are in profit or in loss and if you fail to do so, your broker will do it self and your position will be auto square off.

One important point is that you can do reverse also in day trading I.e. sell the scrip first and then buy it back before the close of trading hours. However in the reverse process you have to buy the scrip on mandatory basis, otherwise your stock broker will do it for you but by the auction method, and you have to pay for it.

So, its imperative to take care of all those scrips which you shorted in the morning before the close of the stock market for the day. That why you will found that sometimes there is high volatility in the market post 03.00 p.m. as most of the intraday traders starts closing their positions if they didn't do it earlier, results in fast movement of the scrip in a particular direction.

That is why, it is suggested by most of the stock traders that if you are looking for positional trading or BTST/STBT or for a long trade also, buy the stocks just 01-02 min prior to market close as their is high probability of getting the stocks at good values.

Also, Intraday gives quick money, without investing or blocking the money for a day or more. also a lot of brokers gives margin for intraday, which helps the traders to buy more than the money they have in their trading account.

There are different rules provided by different investors/trader/books etc etc for doing day trading.

However, we believe that experiences are the best teachers for the people in the stock market. Nobody can teach you more then that but only if you are ready to learn.

Rest we have different posts on the Intradwww.mynsetrade.comay trading rules on the basis of our own experience and on the recommendations of other traders and book masters.

But our suggestion is do trade, learn from them, do testing, make your own rules and always follow them.

INTRADAY DAY TRADE NSE STOCK MARKET LOVERS

PART 2: 

Continued:

5. Stop Loss: Stop loss is a must tool and your savior in the day trade, always finalized your target and stop loss even before take entry into trade. But here I am telling you some important things which are the main reason by which your stop loss hits many time.

6. We all take trade on the basis of a particular time scale, for e.g. 5 min chart, 10 min chart, 15 min chart or so on. So you just have to do one thing, don’t put Stop Loss in system, but keep it in your mind and wait for the time period on which basis you take the trade or we can say let 1 more candle to be complete, exit trade only if next candle close above your stop loss and next coming candle starts forming above it. For e.g. Lets consider you take a trade on the basis of 15 min time frame chart and you take entry at 11.15 @ Rs. 100.00 per scrip with Stop Loss Rs. 98.00 and target Rs. 105.00. Lets consider at 09.20 stocks goes below Rs. 98.00 or your Stop Loss, so you have to wait till 11.30 a.m. and exit trade on the basis of candle starts forming at 11.31 a.m., but keep your eye on buyer seller ration also.

7. This method will save your from all the small/long tails formed by the stock, done by large traders to hit the stop loss of the small retail traders like us.

My today's Intraday Trade:

IBULHSGFIN : Sell at 9.32 a.m. @ 757.90 

Close trade at 9.45 a.m. @ 752.00

A small profit.

www.mynsetrade.com

A small tip: (Please do your own research before take any trade)
ITC at its good level to accumulate 06.06.2019

07.06.2019 ITC shows good consolidation with 60 % delivery report. Entry can be taken but accumulation time starts just now.

DAY TRADER/ INTRADAY RULES

Part I :

Different rules for intraday (By my own experience, completely my own views)

Timings : 9.45 a.m. to 11.30 a.m. and 1.30 p.m. to 3.00 p.m.

1. Intraday requires quick movement of stock in any direction so that entry and target can be done as soon as possible. Hence selection of stock is very important, go for volatile stock only.

2. As volatility and control by big traders like institutions in NIFTY 50 stocks are comparatively low or almost impossible, so NIFTY 50 stock generally good for day trade as they are more comfortable with indicators.

3. Selections of lot and add on lots are must be taken care properly, don’t average in loss at any cost.

Go with small lot initially (it could be as low as 50 to 100 depends on your portfolio size and your money management method).

4. Booking Profit : Starts booking profit even before your actual target hit, if trade takes more time than your calculation but do it in part of lots. For e.g. if you have 500 stocks, sell 100 at 60 % of target, sell next 100 in 70%, next 100 in 80% and rest in your 100% target achieved.

wait for the part 2....

Intraday NIFTY lovers

Part I :

Different rules for intraday (By my own experience, completely my own views)

Timings : 9.45 a.m. to 11.30 a.m. and 1.30 p.m. to 3.00 p.m.

1. Intraday requires quick movement of stock in any direction so that entry and target can be done as soon as possible. Hence selection of stock is very important, go for volatile stock only.

2. As volatility and control by big traders like institutions in NIFTY 50 stocks are comparatively low or almost impossible, so NIFTY 50 stock generally good for day trade as they are more comfortable with indicators.

3. Selections of lot and add on lots are must be taken care properly, don’t average in loss at any cost.

Go with small lot initially (it could be as low as 50 to 100 depends on your portfolio size and your money management method).

4. Booking Profit : Starts booking profit even before your actual target hit, if trade takes more time than your calculation but do it in part of lots. For e.g. if you have 500 stocks, sell 100 at 60 % of target, sell next 100 in 70%, next 100 in 80% and rest in your 100% target achieved.

wait for the part 2....