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How To Read The Chart (Part-1)

Devendrasinh S. Chauhan


"WHATEVER THE MIND CONCEIVE AND BELIEVE, IT CAN ACHIEVE" 

                                                                                                                    By Nepoleon Hill


One of the interesting subject to learn is "Chart Reading". The beauty of chart reading is that there is no specific defined rule for reading chart which makes it more interesting and effective. That means person can read the chart in a way he or she wants to read, however the purpose should be clear while doing this. Different people interprets the same chart as per their understanding, experience and mastery in a different way. WHEN YOU DON'T HAVE SOMETHING TO START AND YOU ARE STILL TRYING TO DO THAT JUST THINK HOW BEAUTIFULLY YOU ARE USING YOUR MIND AND DEVELOPING ANALYTICAL SKILL...!! 


I have received few messages regarding how to read the chart ?? what will be the tomorrow's market view?? at what level market will expire on expiry day?? and so on. When i analysed carefully such questions and noted that the reason for all questions is "Not having knowledge of something that can answer all the questions" and that something is "Reading of Chart". Means if you know how to read the chart you will automatically get the answer of your above questions. 

AND THEREFORE I HAVE DECIDED TO WRITE ON CHART READING SUBJECT IN SIMPLE WAY.

In modern times chart reading becoming so simple with the help of various charting software. The day by day use of social media is increased and more number of people are connected with it. Through the means of social media like Twitter, Telegram, Youtube, Whatsapp, Facebook & many more, we keep our self updated with the latest news and updates from all over the world. One of them is "Chart", yes we used to see the chart that different people shares with their own techniques and logic which is good habit of learning. But not all charts that we see are as perfect as they presented. 

For example you might have seen the same chart on two or same social media with different opinion. One may be in view of bullish and other in bearish. And when we see such different opinion on same chart, we only believe that chart in which our position is open, and that is basic human psychology. But point here is that sometime when we see the chart of any person with such a good observation that force you to believe in it. And if our position is open in opposite direction then we choose to exit from our trade. THIS IS TOTALLY WRONG HABIT OF TRADING...!!

Let's understand with practical example. During the period of May'20 to Sep'20 one stock was continuously in news and watchlist which is "Bharti Airtel". Almost everyone was so so bullish in this counter and waiting for breakout above 600. On social media also if you check you will find 90% suggestion on bullish side of Bharti Airtel. But at the end what happened it just fall from 550 to 400. Now why that happened??. It just because people gave more importance to news flows and their mental belief and not the chart. If you look at the chart carefully you notice only one time it has tested the level of 600 with low volume in the month of May'20 and then continuously taking support at 550. And finally breached the level of 550 and created confirmation of bearishness on 31.08.2020 with high negative volume. Even then people were bullish looking to next day movement from 514 to again 550 with low volume. AND THEN GONE...!!!


THE ONLY REASON OF SUCH INCIDENCE IS: BELIEVING ON SOMETHING WHICH WAS NOT VISIBLE AND IGNORING SO MANYTHINGS WHICH WERE VISIBLE....!!!

This happens most with those who think that there is some secret in chart which they are not able to catch. But there is nothing secret in it. The correct method of reading chart is relying on yourself and then accepting the outcome no matter whether it is Profit or Loss. Only thing that matter is your experience and learning from it. Just don't carried away with others opinion on your stock or index, if you do so you are simply passing message to your mind that other's view is right and mine is wrong. And from very next moment your mind starts working according to your belief and starts producing negative outcomes as per your wish. ALWAYS BELIEVE WHAT YOU DO IS RIGHT FOR YOU...!!

In case you are consulting any experts or following any experts/trader on any social media and accordingly working in market then follow him or her blindly and in that case do not use your mind. The reason is if you starts putting your views which is in opposite of your experts and believing that you are right and he or she is wrong, then taking action on your trade as per your view, may create negative image of your experts or consultant in your mind. And same way mind takes your thought and starts producing negative image of your experts or consultant from next time, which will make you confuse about what to do now. REMEMBER WHATEVER YOU FEED IN YOUR MIND IT STARTS REACTING ACCORDINGLY AND STARTS PRODUCING EXACTLY THAT WHICH YOU WANT...!!

Be crystal clear for your work not only trading & investing but also at any level of work, at any moment, for any situation in life. And when you are confused about what exactly you have to do?? Then best answer is starts your own analysis and it is possible for you, if you really believe in yourself.

LETS STARTS READING CHART...!!

There are so many ways to learn & read the chart. But you have to follow the method that suits to you. In which you are more confident, in which you have more faith, in which you believe, that you want to master. As i said earlier there is no defined rule for reading. But we have to create few rules to reach to our goal. Accordingly look at the basic rules that we have to consider before starting reading of any chart.

Rule No. 1:   Chart should be neat and clean. There should be no indicator on chart.

Rule No 2:    Decide the specific Interval of Time on chart. Like Daily, Weekly, Hourly, etc.

Rule No 3:  Write down the purpose of looking to chart. Means what exactly you are looking in to chart?? It may be Support & Resistance Level, Entry and Exit level, High Volume, etc.

Rule No 4:    Keep others view on same chart aside. To avoid conflicts in your mind.

Rule No 5:  Start reading the chart. Ask questions to yourself and write down the same in your note book.

Let's take example of above rule. Below is Bank Nifty Hourly Chart. 


Applying above rule to above Chart. As per my experience i use Hourly chart because i am comfortable with it. I will tell you reason later in this post. If you look at the chart it is neat and clean without any indicator. Rule 1 & 2 completed. My purpose of looking to chart is Support and Resistance level that i have marked on chart with Support around 35450 and resistance around 36650 and completed Rule 3. As i explained in Rule 4 i have totally ignored what people are talking for Bank Nifty next movement, because for me i have clearly told my mind that i will enter the trade once my above level comes and then i will accept the outcome whatever it will be, by this Rule No 5 completed. NO MORE QUESTIONS BECAUSE I GOT THE ANSWER OF MY PURPOSE OF READING, NOW JUST WAIT FOR LEVEL AND TAKE ACTION THAT'S IT...!!!! 

Few people may think that how to know that 35450 is Support and 36650 is resistance. Then let me clear it, above is my own view based on my experience and knowledge. And this experience and knowledge is nothing but my past performance and results. I know that whenever such kind of pattern forms on any chart i look that chart in a same way that i am looking above. For me there is no secret in chart i believe what i see. AND WHAT I SEE MORE NUMBER OF TIMES THAT I BELIEVE...!! And for next time my belief becomes my objective that helps me to read the next chart.

Let me share you one story from the book "SECRETS OF PIVOT BOSS" by Franklin O. Ochoa, which will help you to understand the psychology of mind in co-relation with market.

"Think about the first time you heard a new song. You like the beat and you relate to the lyrics, but they are completely new to you. However, once you have heard this song five or six times, or even one hundred times, every lyric, beat and drum solo has become saved in your brain. You can anticipate the chorus and upcoming instrumental solo. You can even identify the song by hearing a two second shippet. Trading is No Different.Once you have mastered the type of trading days that occur in market, you will be able to anticipate reversals, breakouts, and even you can catch market with high level of accuracy and authority."

From above story you will be now clear about how to develop the skill to read chart, to understand market movement, to predict market. All you need is more and more practice. THAT'S ALL....!!!

Now we are ready to start looking in to chart. We have cleared our mental confusion. We are not clear about how to read the char. What should be our starting point.

Above is basic steps that i have mentioned to start with. Now let's understand what other parameter that we have to consider. For that we have to be clear about what kind of analysis we want to do.

Below are the basis of analysis.

1.    From the point of  View of :    Support and Resistance. 

2.    From the Point of  View of :    Chart Pattern.

3.    From the Point of  View of :    Candlestick Chart.

4.    From the Point of  View of :    Price Action, based on Volume activity. 

5.    From the Point of  View of :    Open Interest. 


The above analytical instruments are used by various traders and investor to predict the market movement. And we have to consider any of the above point of view as our Rule 3 that i have mentioned as PURPOSE OF LOOKING INTO CHART. Do not mix point of view unless you master any one of it. Once you master one of it then go for other one. By doing this day will come when you will be able to predict master based on your mastered analytical instrument.

You all well aware about above instruments and its important. Let me elaborate in summarized form for understanding.

There is separate and specific logic and theory behind all above analytical instruments. 

Like in case of SUPPORT & RESISTANCE we used to see the level where market take support and face resistance at particular level or zone for more number of times. Which later on we consider it as support and resistance level or zone. 

Then in case of CHART PATTERN we used to take entry when particular chart pattern forms on chart like Double Top, Double Bottom, Head & Shoulder, Trippe Top , Tipple Bottom, etc. Now to understand how this chart patterns works, you need to read the psychology of such pattern through the reading of books or you can also learn from youtube where people explain very will about such pattern. So better to first understand and then look the same in chart. 

One more tool of analysis is "Reading Price Action". Price action means something that gives you idea about particular zone where buyers are ready to buy and particular zone where sellers ready to sell based on Volume activity. Many traders are active on such price action based trading tools.

And lastly Derivative data based analysis where we use Open Interest to identify where buyers and sellers are active. With the help of Open Interest we can understand the level of breakout and breakdown. 

NOW LETS DISCUSS ABOUT  IMPORTANCE OF TIME FRAME FOR READING CHART...!!

Again different people use different time period for trading like Daily Chart, Hourly Chart, weekly chart, 15 Minute chart, etc. We all have to select that time period which is suitable to our trading style. For example if you are positional trader then you may use Daily Chart, weekly chart. Same way if you are intraday trader then you may use 5 Minutes to Hourly chart. I am intraday trader and i use Hourly chart for my analysis and trading purpose. 

In my early days i was very confused between different time period and not able to calculate what exactly i have to do. Sometimes i use 15 Minute Candle, then 30 Minute, then Hourly , then Daily and then also end up with negative outcome. Time after time i realized that i have to stick to any one of time frame which is more powerful. So i have started analyzing different time zone and finally decided to go with Hourly Chart. 

The reasons for choosing Hourly chart are summarized below.

1.    During 1st Hour market manage to sustain with overnight news flows.

2.    During 1st Hour market discounts Opening news flows on account of results or corporate developments.

3.    During 1st Hour market trade nearly 50% of trading range with high and low.

4.    Reduce the chances of falls breakout or breakdown.

Considering above points i have selected to to go with Hourly Chart because it gives me at least 80% probability for movement of remaining day, which is sufficient for me to plan my trade. 


On a same line you can also create your own trading time. REMEMBER ONE THING ALL TIME FRAME IS EQUALLY IMPORTANT, BUT WE HAVE TO MASTER ONLY ONE IN WHICH WE HAVE MORE CONFIDENT...!!!

I hope i have covered all the basic points on which you can start your day for chart reading. The importance of Mind power is also explained you very well manner that helps to build the better and greater future. 

So starts from today application of Chart Reading with your own way with the help of above points. I know you can do it. ALWAYS REMEMBER IF OTHERS CAN DO THEN YOU CAN ALSO.!!

Today i have just explained the relationship between our mind and market. And hopefully i am managed to explain you in easy and simple language. 

In Part-2 : I will show another magical technique of Chart Reading that you have but you are not aware about it.  I will also share with you successful traders mind set during trading with practical example.



Thank You..

Happy Trading.
"Learn & Earn"...!!



(Disclaimers:- Above is Just for educational purpose only.)

(Rule Base Trading helps to Consistent Performance Else Ready for Accident....✈๐Ÿ™†)


   

Trading Tech Ticks (Be The Trader and Not Gambler)

Devendrasinh S. Chauhan

 "Jai Shree Krishna!!!!"

Before moving to our subject let's have some positive thoughts in mind which help us to become good and discipline trader. I recommend everyone reading this post to repeat this lines everyday before market opening and after market closing....!!! It has tremendous power once we make it our habit... Try It...

1.    I am very Good & Discipline Trader.

2.    Today is my day.

3.    I will get good opportunity of trading.

4.    I will make good profit today.

5.    I am confident about my trading set up.

6.    Tomorrow will be my day.

7.    If I lose then that will be my new learning for the day and   next time i will take care.


Now, let's talk about "Trading Tech Ticks". Trading Tech Ticks means ways of trading according to my understanding and accordingly i am going to explain how we can trade for continuous profit in market.

It is known that "Trading is an Art", but it is applicable for those who are Artist means experienced trader with control over emotions. Except that all other traders are just trading like a Gambling or Luck by Chance. Isn't it??!!. Therefore at the end only Artists win and gambler lose. So Be Artist & Not Gambler" no matter how long it takes but that is only key for discipline & successful trader.

Discipline Trader

Gambler


Today I am going to explain different trading Tech Ticks which can help you to become An Artist from Novice Trader.


"Trading Tech Ticks"

1. Rule of Compounding:-

We all are familiar with term "Compounding",it simply means growing anything by addition of incremental rate. We can relate to our trading then we can consider "Anything" as our Base Capital and "Incremental Rate" as percentage of profit margin. For better understanding let's go through below table.


In above Table starting capital is Rs.25,000/- and closing capital for the day is Rs.26,250/- increased by Profit of Rs.1,250/- for the day. In above table i have used intraday margin of 10 Times (You can change as per your comfort) and accordingly trading margin for the day comes to Rs.2,50,000/-. Now as per my risk taking ability i have fixed Maximum loss for the day at 1% of trading capital of Rs.2,50,000/ which comes to Rs.2,500, and my maximum profit of the day at 2% that comes to Rs.5,000/-. Now i have applied accuracy ratio of 50:50. Meaning by that chances of profit and loss is 50:50, accordingly my maximum loss for the day would be Rs.1,250 and Profit Rs.2,500 and therefore my net profit for the day would be Rs.1,250/- which i have added to my opening capital and became next day opening capital. Next day again by using margin of 10 Times resulting profit comes to Rs.1,313/- and reached to closing capital of Rs.27,563/- and so on. If we repeat the above style of working for 15 days then we will end up with capital of Rs.51,973/- means almost 100% return on opening capital of Rs.25,000/-. 

Hope you understand the structure of above table which is nothing but the "Compounding" calculator that manages our Risk and Reward. You can change Intra day Margin, Risk to Reward and Accuracy ratio as per your trading set up. I have considered simplest form of Risk to Reward ratio and Accuracy of 50/50 just to clear the formation of Table. Many of you would be wonder that how it is possible to have daily profit, then you are right not possible at all but that is just for your understanding purpose.

Now just assume that one day we have made loss and another day profit, in that scenario table looks as below.


Now end result will change and now closing capital at the end of 15 day will be Rs.38,561 with 54% return on capital of Rs.25,000/-. 

On a same way above table can be updated with changes in Margin, Risk to Reward Ratio and Accuracy ratio, ultimate result would be profit. Because the purpose of above table is to understand how "Compounding" works.

"Compounding" is method and not trading set-up. Selection of Stock for trading depends on our technical and price action analysis. Compounding Model is to be associated with your trading style. Your trading set up will decide perfect entry and exit level while compounding model helps to you manage the risk which we have already marked in Compounding table.

Benefit of this model is that we will be very clear about potential loss and profit before the execution of trade. And with the help of this table we can decide trading quantity and value which again depends upon risk taking ability.

I have seen many traders using this Tech Tick in their Trading Career. And after 1 or 2 months when their capital exceeds certain amount say Rs.1 Lac or Rs.2 Lac they transfer the all fund to their bank account and again start with Base Capital and continue to make money. If they can do then why we can't. Start developing such king of model as per your experience and learning.


2. Imaginary Trading:-

This is unique and magical technique for Trading You may not find such trading pattern anywhere. But i have seen somewhere on social media one image and from that Image i have started thinking and that i am writing here. "Imaginary Trading" means application of Technical and Price Action analysis on chart which is going to be emerge in future. 

For Example:- Once we finish watching any movie trailer our mind starts visualizing about entire movie. Right???... And during that visualization we decide whether to see that movie or not. If we are not happy after Visualization then we will not go for it and if like then we go for it. Why our Mind is so powerful to visualize the things, simply because we all have programmed our mind with certain beliefs and that beliefs comes from our experience and knowledge. In past we have already seen number of movies and accordingly we have stored images of that movie in our mind and therefore our mind is able to visualize the entire movie based on image saved in our memory.

This method is directly linked to our Subconscious mind. We know how our subconscious mind works. Same way we can also starts imaging probable price action on chart and whenever in future that level comes we have to take entry. We are clear about Technical Analysis and Price action analysis and therefore we just have to put that analysis on chart with the help of Our Imaginary Mind. Let's understand with the help of Chart.


Above is Hourly Chart of "Muthoot Finance Ltd". Considering downward movement on hourly chart i have created future level with help of white line. These lines are nothing but trendline. Now as per my imagination once price moves towards 1230 i will short for target of 1166 and buy at 1166 for Target of 1210 and so on. The thump rule of this Trading Tech Tick is execution of entry only and only when price moves toward the imaginary levels. 


Let's take another example of "Bharti Aritel".


Above is Hourly chart of "Bharti Airtel". In above chart Bharti Airtel is in uptrend on hourly chart. And by plotting White line as trendline i will execute entry once price reached to imaginary level. 

Through this method we can create our own Opportunity for trading in future. Yes stop loss is always required whatever system we use. People looks for opportunity but with the help of Imaginary Method we can create Opportunity. 

Benefit of this method is that it will control our emotion and increase level of confidence that makes us Real Trader from novice trader. Don't think that this is Assumption base trading, it is discipline base trading method because it is pure technical level base trading which is widely used trading tool all over the world. Only thing we have to do is Execution of trade when opportunity come. That's all!!!!


 3. Avoid Over-trading:-

This is common psychology of majority of Novice Traders. We often used to trade by way of increasing stocks for trading or increasing size of quantity for trading. In both the case we have to suffer lose, because it is over trading. Below are the common reason for Over Trading.

1.    To recover loss.

2.    Not happy with Little profit, so increase the size of trading quantity.

3.    Penny stock tips by News channel.

4.    Most common "FOMO". (Fear of Missing Out).


Out of all above reason the most common and dangerous reason is "FOMO". Whenever we are trading based on recommendation of Experts on TV channel or from any social media, our mind tells us that "Yes this is good recommendation and you should increase the quantity of trading. Because the person recommending stock is very smart he explain the reason with full of positive notes and we easily perceive his statement and store in our Mind. So next time whenever you heard any recommendation your mind instruct you to go for trade because we don't want to lose this trade and for more amount of profit we take more number of trades which later on become our biggest enemy in our trading career. So never listen anybody always do your own analysis to pick the stock and go for it. Your own mind is far far far batter than others but we always doubt our mind and believe on others mind. Just start believing in you and then see the miracle..!!!!! If they can do then we can also do.

During the feeling of FOMO we never think about loss this is another big problem with new traders. During the market hours we only think that we must get Minimum Rs.5,000 or Rs.10,000 or any other amount of profit only, and we totally ignored Probable loss. Because your winning probability is always 50-50. Instead we should start our day with first statement that "I should not Lose more than 1% of my Capital" and you have to set Stop Loss also @1% of your trading size. Now you have only 2 option either book loss at 1% or book profit at 2% or 1.5% which ever applicable as per your Risk to Reward ratio.      

"The way we trained our mind, exactly on a same way he instructs us". 

Over Trading is not trading Tech Tick but many traders using this as Trading Method which is totally wrong. Just think about your losses you will find that majority of your loss was due to Over Trading. Right???.

My intention behind writing on Over Trading is that by Avoiding over trading we can save our capital that we can use in other value added activities. Over Trading is nothing but the pure Opportunity cost for us...!!!

Now let me tell you how people treat Over Trading as trading Tech Ticks. You will be agree once you finish this post. One of my Friend used to trade in Option and end up with huge amount of loss. Why that happens??. During initial stage he was greedy about option trading because Option is very cheaper to buy say Rs.3000 to Rs.5000. And during initial stage he used to book Small amount of profit say Rs.500/- to Rs.3000/-. And he was happy with that. One day he decided to increase the size of quantity because now he was not happy with small profit he fixed in his mind that now we have to increase our size of trade to earn more amount of profit and his mind has stored this message in memory. Only mistake was that he has not stored probable loss if any. And as i stated above our mind is our Manager and we take action based on our Minds instructions. 70 to 80 Percent people have faced this scenario. Isn't it??

Then they start looking for professional course on market and that is again chargeable. In such condition the objective of Trader is not learning it is purely for the purpose of recovery of loss. After completion of training they go for live trading and again start making money as per training course. Again one day our greedy nature tells us to go for bigger trade as you are now professionally trained trader, and as per our minds instruction we start over trading and the moment market reversed we fail to control our emotions and start putting orders just to recover loss but at the end we lose our profit as well as capital. Stay Away from Over Trading..!!1


How to Avoid Over -Trading:-

1.    Exit once your stop loss hit and close the system.

2.    Start preparation for next day.

3.    Note down the reason, that why my stop loss hit??

4.    Divert your mind towards other work and you can go for walk or start reading books.

5.    Power Off TV, Social Media during trading hours.

6.    Just focus on your trade and level.


4.  Rule Base Trading:-

This is common trading method used by majority group of traders like you and me. In this method we should have our won trading principle and we take action the moment our entry and exit trigger. Rule base trading means preparation of Trading system where in everything is Crystal clear like which stock to trade, at what level to trade, when to exit, etc.

The only thing that differentiate is "Discipline". Best example of Discipline trader is "Mitesh Patel" a trader with huge amount of profit every week. The learning point from him is "Discipline" and execution of trade. He has stored charts in his mind and the moment his level comes he start trading that stock with full conviction and end up with huge amount of Profit say Rs.1 Crore in a single day. The reason for his success is confidence level on his trading style. You can visit his posts on Twitter

However, the moment our mind started avoiding Discipline then have to be ready for negative outcome of our trade. Because rules are not for breaking, it is for Following. Follow the rules and you start feeling positive outcomes. 

Rules means something which is True and crystal clear. And discipline is our guardian that controls our emotion and help us to follow our rules. Once rules broken than nobody can save us, not even God.!!


My Rule of Trading (Nifty & Bank Nifty Option Only.)

1.    Wait till closing of 1st Hourly Candle.

2.    At closing price of Hourly candle i decide Trend. (Bullish, Bearish, Neutral).

3.    After that I apply Probability Ratio of Situation formed on Chart.

4.    Then take trade.

5.    Exit if stop loss hit and Book Profit if Probability wins.


(Rule Base Trading helps to Consistent Performance Else Ready for Accident....✈๐Ÿ™†)


Thank You..

Happy Trading.
"Learn & Earn"...!!




My Weekly Trading Strategies of Bank Nifty (14-12-2020 to 18-12-2020)

Devendrasinh S. Chauhan

  1.    Trading Day 14-12-2020:



Above is Hourly Chart. On 14-12-2020 first Hourly candle closed exactly near resistance zone of 30700-30800 and formed Doji kind of candle, indicating range bound session with support around 30300. During such days we neither go long nor short hence decided Not to trade. Hence, that day i did not trade.

My View:- Neutral.


 2.    Trading Day 15-12-2020:



Above is Hourly Chart. On 15-12-2020 also same kind of situation on chart formed "Strong" Bearish Candle near yesterday high. Considering such a big red candle i have decided to go short. And therefore initiated Bear Call Spread. However, from immediate 2nd Hourly candle market recovered and ended day with loss of Rs.1450.

My View:  Bearish considering strong red candle.

My Probability:  My probability was 80% that there will be downside. And 20% probability that market may move high.

My Trade:

Buy 31000 Call option. 2 lot
Sell 30800 Call option. 2 lot
Stop loss. 30750

End of Day Result: Loss of Rs.1,450.


3.    Trading Day 16-12-2020:



Above is Hourly Chart. On 16-12-2020 again red candle at resistance zone of 30800, and hence decided Not to trade. And waiting for closing above 30800 at day end.

My View:  Neutral.

4.    Trading Day 17-12-2020:


Above is hourly chart of Bank Nifty. On 17-12-2020 it was expiry and on expiry day i mainly execute Butterfly covering 300-350 point range of expiry. 1st candle was Doji hence i decided to formed Butterfly in such a way that it should cover range of 31000 to 30500 and if that happens then i will be in profit. And if market starts moving above 31000 or below 30500 then i would be in maximum loss of Rs.1100. Because at 31000 there was massive shorts hence difficult to cross and same at 30500 there was massive long hence difficult to break.

My Trade:

Butterfly

Buy 31000 Call Option 2 lot ( Expiry 17-12-2020)
Sell 30800 Call Option 4 lot ( Expiry 17-12-2020)
Buy 30600 Call Option 2 Lot (Expiry 17-12-2020)
Maximum loss Rs 2200
Maximum Profit Rs.7000

End of Day Result: Profit of Rs.3880.



5.    Trading Day 18-12-2020:



Above is Hourly chart of Bank Nifty. On 18-12-2020 scenario was exactly same as 15-12-2020. 1st Candle was strong bearish and then recovery, and i have also did the same thing and again trapped here. And ended my day with loss of Rs.710/-.

My View:  Bearish considering strong red candle.

My Probability:  My probability was 80% that there will be downside. And 20% probability that market may move high.

My Trade:

Buy 31000 Call option. 1 lot
Sell 30800 Call option. 1 lot
Stop loss. 30650

End of Day Result: Loss of Rs.710.


(Total Profit during the week comes to Rs.1720.)

My Rule of Trading (Nifty & Bank Nifty Option Only.)

1.    Wait till closing of 1st Hourly Candle.

2.    At closing price of Hourly candle i decide Trend. (Bullish, Bearish, Neutral).

3.    After that i apply Probability Ratio of situation formed on chart.

4.    Then take trade.

5.    Exit if Stop Loss Hit and Book Profit if Probability wins.

6.    Capital Requirement Rs.35000 to Rs.38000.


(Rule Base Trading helps to Consistent Performance Else Ready for Accident....✈๐Ÿ™†)


Thank You..

Happy Trading.
"Learn & Earn"...!!


Books That You Must Read

  • By John J. MurphyMarket Analyst
  • By Franklin O. OchoaMarket Analyst
  • By Thomas N. BulkowskiMarket Analyst
  • By Steve NisonMarket Analyst
  • By Suri DuddellaMarket Analyst
  • By Jeff GreenblattMarket Analyst