Most frankly ask a trading question in the stock market

Most frankly ask a trading question in the stock market and commodity market trading most of the mistake get a lot off a loss in trading
What is Day Trading?
Day Traders usually buy and sell (or sell first and then buy) securities (including Stocks, Bonds, Commodities, currency, options, futures etc) during the same day and, as a general rule, do not hold the securities overnight. They are therefore said to have “Zero Position” at the end of the day. (However, some Brokers have started providing facility to square up the Buy-Trades on next market day). Many Day Traders make dozens of trades every day hoping to capture profits that arise from small intra-day price fluctuations.
What is Swing Trading?
Swing traders usually hold a security from one day to 2 weeks or so. Most of the swing traders concentrate on Breakouts on just a few selected High Volume stocks that they believe will likely make a significant move in price in the near-term.
Many people think that day trading is just gambling. Please comment.
No! That is a misconception. Day trading has large potential rewards, and it also has large potential risks involved. Generally, in any form of gambling, the odds of winning or losing are 50-50, where no strategy or tools may influence your chances of winning except your luck, which may play an important role. But in day trading, with the help of Technical Analysis, Proper Trading Strategy, discipline, Patience, use of stop Loss mechanism the odds can be turned in favor to extent of 80-20 or even higher. Even with 50% trades going wrong and hitting stop loss, a day trader can make a profit and turn out to be a winner. Day Traders must follow successful trading rules and avoid most common mistakes to remain in profit consistently.
In brief, what services are you offering for Day traders/Investors?
1. Highly Active Day-traders can get real-time Intra-day Trading Calls in comfort of their home or office through our ”Message Room” (like MSN/Yahoo Chat-Box). If you are a busy executive or a person on move but do not want to miss any trading opportunity, you can get live trading calls on your mobile via SMS and profit from every short-term fluctuation in the Market. (Additionally to assist you formulate a trading strategy for the day we have Daily Morning Newsletter specially designed for Day and Swing Traders, a trading guide like Bullish or Bearish Patterns, Breakouts, Candlestick Patterns, Overbought/ Oversold stocks, Support/ Resistance Levels for key stocks, Trend change Levels, Bar Reversals, Highly volatile stocks, A/D data, Stock Likely to move (both Bullish & Bearish) with Targets/ Stop Loss Levels and lot more…)
2. Semi-active Day Traders, or that expert themselves want the second opinion or want additional tips, can go for economical ‘5-SMS a day’ plan with a Basic Newsletter giving important support resistance levels of 50 most active scrips including leading “F&O” scrips.
3. High Net worth Investors may avail our Portfolio Advisory Service to track their portfolio and make the best use of Technical Analysis to profit from Trading in scrips in hand. Such investors may send separate mail giving their contact numbers.
4. For those, who wish to have Technical Analysis of a specific Stock, we offer detailed Technical Analysis Report at a nominal Fee, payable in advance.
What is the difference between 2 services plans named “5-SMS a day” and “Intra-Day Live SMS Calls”?
”5-SMS a day” is basically a service in which SMS will be sent at ‘Fixed time’ like first between 9.30-9.45 am with trading recommendations if any followed by at 11.00, 12.30, 2.00 and at 3.15pm or before closing hours if extended. While in “Intra-Day Live SMS Calls” plan you get SMS as soon as there is a Buy/ Sell Signal from Charts. Number of SMS may vary depending upon trading opportunities to the extent of 15-20 calls a day. These will be time-sensitive for active traders.
Please clarify as what is the difference between “Basic Newsletter ” (BNL) and “Detailed Daily Newsletter” (DNL)?
”Basic Newsletter (BNL)’ as the name suggests gives basic trading information to the Day Traders like Important Support/ Resistance Levels/ Trend Change Levels/ 10 Period High/Low/ Bar Reversals/ AD data. This information is very useful for Day traders who trade only on Support/ Resistance Levels. The “Detailed Daily Newsletter (DNL)” Contains all the reports useful for all Day Traders and Investors using 1/5/30/ 60 Minutes & Daily Charts, like Bullish or Bearish Patterns, Breakouts, Candlestick Patterns, Overbought/ Oversold stocks, Support/ Resistance Levels for key stocks, Trend Change Levels, Bar Reversals, Highly volatile stocks, A/D data, Stock Likely to move (both Bullish & Bearish) with Targets/ Stop Loss Levels and lot more……………..
What is “Free Newsletter & Tips” on your website?
As part of the promotion of our services and to help traders and investors from time to time, who cannot afford our regular services, we give useful information through of Newsletters and other articles on Technical Analysis. Most Part of these newsletters is reserved for Paid Subscribers, however, the Disclaimers/ Privacy Statement shall be applied to subscribers of Free Newsletters also.
I am willing to subscribe to the services offered by you but can I have “Free Trial” for a few days to test your skills?
We can realize your apprehensions but you will appreciate that we are in this field since 1990 and proved our performance in all the best and worst periods of Stock Market hence do not require any testing. Moreover, there are many cases in which people keep on asking for Free Trials under different names with different identities and mobile numbers. Therefore as a matter of policy, we do not give FREE TRIALS. You may try our “2-Week” Paid Trial offer.
Can I cancel my Membership/ Subscription any time due to any reason?
Yes! You can cancel your membership/ subscription any time by giving 7 days’ advance notice in writing, however, the running month will be charged full and refund will be sent to you within 15 days after deducting the charges on the basis of ‘Monthly Subscription’ multiplied by the number of months the service was used. For Example, if you intend to cancel the Yearly subscription of a Plan (whose Yearly subscription is 22500/- while the Monthly Subscription is Rs2500/) after using it for 5 months. So you will get (Rs.22500/- minus Rs.2500×5 months= Rs.10000 minus full taxes if applied)
“I want to start day trading, but I don’t know the first thing about it.”
If you not sure about day trading, please don’t just “jump in” take the time to read up and learn the basics of trading. Day trading is NOT easy and not a “get rich quick” strategy. A great way to start into day trading is to paper trade or use a trading simulator (without involving actual funds). These strategies don’t take into account all the possible risks that occur when trading with real funds, but it can give you a sense of what it’s like to trade. Please make sure you have a strong foundation of knowledge before using actual funds
What is ‘BTST’ offered by many Brokers of NSE/ BSE?
Taking advantage of the Settlement Procedures of Stock Markets, which requires settlement of Trade on 3rd Day of execution, many Brokers have started offering their Clients / Day Traders the facility of BTST (short form of ‘Buy today Sell tomorrow’) at nominal extra cost (or NO Extra Cost by few) provided the financial interests of brokers are protected. These trades are to be sold on next day (or before 12.00 noon on 3rd Day). However ‘Short Selling’ under this facility is not possible hence not available.
‘How much capital is needed to begin day trading?
Generally, any day trader should have enough trading capital to enable him or her to buy at least few hundred shares of any given stock on any particular day – preferably without having to use margin or using only part margin. In addition, the new day trader should treat this as 100% risk capital and should not have to unduly worry that the whole amount of this capital may be lost very quickly.
How many On-Line Buy/ Sell Advises do you give in a Day?
On a Normal Trading day with usual fluctuations, you can expect 5 to 10 calls, however, on a good volatile market, these calls can go up to 20 also whereas, on a Non-trading market, these get reduced to 1 to 3 only.
What are your criteria for selection of stocks for Day-Trading?
The very first criteria are ‘Volume’. We select only ‘High Volume Stocks’ only for easy entry and exit (even in Stop-Loss case). Second criteria are ‘Volatility’. It has been seen that Volatile stocks give better Trading opportunities for Intra-Day.
What is the number of stocks, you analyze for Day Trading?
We follow about 200 High Volume Stocks of ‘Nifty’, BSE ‘Sensex’, ‘F&O’ stocks including select high volume stocks. Apart from that we ‘rotate’ 10-15 stocks from time to time, which get into the limelight on some news/ results/ media or on Technical Breakouts.
How do you give Real-Time Buy/ Sell advice to Day Traders?
We give real-time trading advice using ‘Message Room’, ‘Pop-Up Alerts’ and by ‘SMS’ on your Mobile Phones during market hours. Message Rooms has the facility to only receive messages. For Message Room and Pop-Ups, you need to have internet facility during market hours to be On-Line.
Which of ‘Message Room’ or ‘Pop-Up Alerts’ or ‘SMS’ is suitable for me for real-time trading advise?
Message Room is for those Traders who have Internet facility, to be online all the time during trading hours and they trade through internet/or Broker’s terminal instantly. ‘Pop-Up Alerts’ are useful for those busy investors/ traders/ HNI (with internet facility) who want to trade only when there is an opportunity. A small ‘Message Window Pop-up’ on their computer screen notifies them as soon as we send a message. And SMS is for those active traders who are mobile and can get their trades executed over the phone or otherwise but do not have access to internet facility all the times.
How do I decide as for how many shares to buy?
You should try to use the same amount of money on each trade, NOT the same number of shares. You should decide before you begin the service how much you will trade with. Let’s say you decide on Rs50, 000/- per trade. If you are buying XYZ, and it costs Rs50, you should buy 1000 shares. If you are buying ABC and it costs Rs25, you should buy 2000 shares.
Is every stock suitable for day trading?
No. A day trader should never trade low volume stocks. These stocks have poor liquidity and hence a higher price volatility. This may make it hard for you to exit your position quickly at a fair price. Trade only high volume, well-known stocks.
What does it mean to “short” a stock?
To “short” a stock, you simply sell the stock without actually owning it. You will have the obligation to buy back the stock on the same Trading Day in order to “cover” your short sale to make you have ‘zero position’. When you short sell a stock, you are hoping that the stock price will drop so that you can buy it back at a lower price than what you sold it for, thereby making an Intra-Day profit on the transaction.
Is it possible to keep Short Position ‘open’ for more than a day?
No, in Cash Segment all the trades are settled on ‘Delivery’ basis on End-of-Day position thus Blank Short Positions must be covered on the same day to avoid coverage of stocks in ‘Auction or Spot’ otherwise, normally at much higher price than prevailing market prices. However position in stocks traded under “Futures & Option Segment” (known as ‘F&O Segment’) can be carried forward to the extent of 3 Months (under different contracts of 1 Month/ 2 Months/ 3 Months) provided such shares are traded under ‘F&O segment’ (at present there are only a few stocks under this category. Check with your broker about F&O dealings/ Margin Requirement/ Brokerage and settlement procedures. For more details and the latest list of such stocks you may visit www.nseindia.com).
What is the difference between a market order, a limit order, and a stop loss order?
Here are the key differences between each type of order:
1. A market order instructs your Trading Terminal or shares, broker, to buy or sell shares immediately at the current market price. This will usually take place at the “ask” price
2. A limit order instructs your Trading Terminal or shares, broker, to buy or sell shares at the certain price specified by you. When (and if) the price of the stock reaches the price you previously specified, your order will be executed at that price.
3. A stop loss order instructs Trading Terminal or shares, broker, to liquidate your position if the share price drops or rises above a certain amount specified by you. (Imp. Note – Give sufficient spread between Stop Loss limit and Trigger Price to avoid any non-materialization of Stop Loss Order)
Should I Trade without using Stop Loss Orders
Never! Never trade without Stop Loss however you may be sure of your success. In one stroke it may wipe off all your capital (maybe more on Margin Trading) if anything goes wrong. Your ‘Stop Loss’ order should be initiated along with your Buy/Sell order without fail. Even if 50% of your trades are met with Stop Loss, you can still make a profit on winning trades. (Imp. Note – Give sufficient spread between Stop Loss limit and Trigger Price to avoid any non-materialization of Stop Loss Order)
I have tried day trading but with high brokerage charged by my broker, I end up negative despite successful trades. What should be reasonable Brokerage in ‘Day Trading’ to catch small price movements profitably?
Normally brokerage is linked with the Trading Volume/ amount of Margin and the services provided by the Brokers. 5 (Five) Paise per share of any amount, on each side of Buy or Sell, is the kind of brokerage advertised by a few popular On-Line Brokers. Normally High Volume Traders pay brokerage of 0.015% to 0.04% of traded shares while Low Volume Traders may have to pay more brokerage. There is a practice of Fixed Brokerage per month also with some brokers irrespective of Volume or Number of Trades. Also, it may be kept in mind that brokerages are more competitive in big cities than smaller cities/towns due to competition and other infrastructure costs involved.
I am a Businessman running my own business. Though I am an active Investor and Trader, at times I don’t get much time to follow my trades. Is Day-Trading suitable for me?
A. Basically, Day Trading is Suitable for those who are trading online, have direct access to Trading Terminals or brokers to get their orders executed instantly. Every minute (rather second) matter in Day Trading. If one cannot track his trades, must not involve in day trading, which at times require prompt decisions.
What rules do you think are the most important for day traders?
There are many important rules that day traders should adhere to but the most important of these are (You may also check the website for most common mistakes committed by day traders):
1. Always do your own due diligence (Research) before entering any Trade
2. Always Trade with the money you can afford to lose
3. Divide your Capital among 10 equal Risk Parts
4. Never Over Trade
5. Always use ‘Stop-Loss’
6. Never Average your Losses
7. Sell Short as often as you go Long
8. Don’t Change your Strategy after initiating a Trade
9. When in doubt, simply get out.
10. Buy on Bad News & Sell on Good News
11. Don’t follow the crowd, they are usually wrong
12.Ban wishful thinking in the Market
13. Hope, Wish, Fear, Pray are all 4-letter words, an obstacle in successful trading
14. Many small profits are equal to Big Gains.
Q. Do you give ‘Technical Analysis’ of any stock on Subscriber’s request during Market Hours?
A. No! Strictly Not! To remain focused on our research and analysis, We do not appreciate any phone calls or entertain any query during market hours. Our suggested calls are clear with Volume/ entry level/ Target/ Stop Loss Level that nobody should have clarification or confusion or misinterpretation of any kind.
However if such stock is in the list of about 100-125 High Volume stocks, which we follow on daily basis, such requests can be considered but after Market Hours or on Weekends.
Anyone seeking our Technical Report on any stock may contact us through ‘Technical Query’ section after paying a nominal Fee.
Do you or your associates Trade in any of your recommended Stocks?
No! As a matter of policy, we maintain high degree integrity and to give unbiased advisory, we (employees, associates, partners, analysts, promoters of Team.trade4profit) do not trade ourselves in the Stock Market. It has been noticed that many analysts, who are traders themselves, though wrong technically, try to justify their recommendations and try to create hype about any stock to create an Exit route for themselves.
Do you get any compensation from any company you recommend in your Chat-Room Service or in Newsletter?
No. We have never received and never will receive, any compensation of any sort from any company we cover in the newsletter or our Chat-Room Service. All stocks we cover in our service are selected because we feel they stand a chance at making a profit for our Subscribers/ Members and for no other reason.
What time are the Daily Newsletters sent to Members?
All members should receive the newsletter(s) before the markets open. Normally it is sent any time between 11.00 pm to 7.30 am, however, owing to reasons beyond our control it can be delayed further a few times a year.
Will your Service be available on all the trading days throughout the year?
No! You should be prepared for ‘No Service’ for about 10 Trading Days in a year due to various reasons beyond our control (like failure of Website Server, Failure of Service at Data Provider’s end, Failure of Internet connectivity, Power Failures, Technical Faults at our Computers, Viruses, Social Compulsions etc). We shall keep you informed in case of such Force Majure situations and try our best for alternative arrangements if possible.
What are the ‘Futures ’?
It is an Agreement between the Buyer and the Seller for the Purchase or Sells of a Particular Asset (like Equity Stock/ Index etc) at a Specified Price and on a specified future date (1 Month/ 2 Months/ 3 Months). It conveys an OBLIGATION on both Buyer and Seller to Fulfill the Terms of the Agreement. Futures are Settled on Last Thursday of the Specified Month and both buyer and seller have to pay minimum Initial Margin as per the requirement of the stock exchange and account between buyer and seller is settled Everyday till the expiry of the Futures contract.
What are the ‘Options’?
An option is a contract, which gives the Buyer of Option (holder) the right, but not the obligation, to Buy or Sell specified quantity of the underlying assets, at a Specific (Strike) Price on or before a Specified Time (expiration date) i.e. 1 Month/ 2 Months/ 3 Months etc. The underlying may be physical commodities like wheat/ rice/ cotton/ gold/ oil or financial instruments like equity stocks/ stock index/ bonds etc. There are 2 types of Options i.e. Call Options and Put Options.
Can anyone Day-Trade in Futures & Options?
Yes! Anyone can do that and square-up his position at the end of the day, but as the name suggest these instruments are meant for Position traders who anticipate a substantial price movement in stocks coming under ‘F&O Segment’ (limited numbers as on date). Trading in ‘Futures & Options’ is more suitable for Swing & Position Traders who can maintain their Long/ Short positions by paying Margin Money as per requirement of the Stock Exchange.
“I forgot my password, now what?”
A. There is a facility below “Member Login” area on the Home page to get ‘Lost Password’ automatically emailed to you but in case of any difficulty, all you need to do is email us and tell us who you are. We’ll get back to you shortly with your password. To avoid this situation, be sure to write your username and password down and keep in a safe place.

Read more...
Technical Analysis

Technical Analysis

Technical Analysis most important in trading for intraday and long-term hold we can identify to find what is next movement and get profitable trading in stock and commodity 

In the science of Technical Analysis, Volume plays a role which is as important as any other basic indicator. An increase in the volume in conjunction with Stock price moves adds strength and momentum in the direction of the move. It reflects the market’s confidence that the uptrend will continue in force or its pessimism that the downtrend will.
For the market, declining volumes as the market rises are supposed to warn the end of a BULL MARKET.
Likewise, a sharp increase in volumes resulting in Selling Climax signals the end of a BEAR MARKET. 

An increase in abnormal volume can alert investors to coming price movements, Up or Down before it becomes obvious to the overall market. Therefore, the market axiom “Volumes Precedes Price.”
Historically, the majority of BULL MARKETS have originated with at least two days within the two-month period where upside volume is at least nine times greater than the downside volume. Investors who track volume and spot the two-day Exceptional Upside Indicator can out-maneuver other investors and earn excess returns by positioning themselves for the coming Bull Market.
Basic Volume theory includes the following maxims:
* Increasing Volume with an advance is Bullish
* Decreasing Volume with a decline is Bullish
* Increasing Volume with a decline is Bearish
* Decreasing Volume with an advance is Bearish
* A Market Top is imminent when heavy volumes occur with little or No Gain in the averages.
* Heavy Volume confirms the direction of price breakouts from a Support or Resistance Zones.
* An increase on heavy volumes after a previous substantial rally signals a “Blow Off” with an impending top and
Reversal approaching.
* Heavy Volumes accompanied by an accelerating drop in prices confirms a “Selling Climax” and impending price
reversal after the panic selling subsides.
* Low volume periods after upward price reversals reflect a Consolidation Phase before the resumption of the Upward
Movement.
The Daily Volume Indicator measures extremes in the Supply/ Demand relationship. If a Stock closes at the midpoint of its trading range for the day, the indicator reflects no change. Closing Price above or below the trading range midpoint show an increase or decrease in the Daily Volume Indicator, respectively.
In constructing the Daily Volume Indicators, Technical Analysts take into account the day’s volume, closing price, Distance between closing Price and the midpoint, and the Trading Range.
These are just the basic characteristics of the Volumes, these must be read in conjunction with other commonly used indicators before drawing up any conclusion.

Read more...
Do and don'ts for Stock Market Investments

Do and don'ts for Stock Market Investments

Do and don'ts for Stock Market Investments

What must I do now?
This is the question probably every equity investor would have asked himself a number of times in the past few months.
With the stock market moving to dizzying heights before succumbing to gravity, it’s easy to get nervous or over-excited.
Here’s what we suggest you do when the bulls and bears kick up a lot of dust.
What you must NOT do
1. Don’t panic
The market is volatile. Accept that. It will keep fluctuating. Don’t panic.
If the prices of your shares have plummeted, there is no reason to want to get rid of them in a hurry. Stay invested if nothing fundamental about your company has changed.
Ditto with your mutual fund. Does the Net Asset Value deep dipping and then rising slightly? Hold on. Don’t sell unnecessarily.
2. Don’t make huge investments
When the market dips, go ahead and buy some stocks. But don’t invest huge amounts. Pick up the shares in stages.
Keep some money aside and zero in on a few companies you believe in.
When the market dips –buy them. When the market dips again, , you can pick up some more. Keep buying the shares periodically.
Everyone knows that they should buy when the market has reached its lowest and sell the shares when the market peaks. But the fact remains, no one can time the market.
It is impossible for an individual to state when the share price has reached rock bottom. Instead, buy shares over a period of time; this way, you will average your costs.
Pick a few stocks and invest in them gradually.
Ditto with a mutual fund. Invest small amounts gradually via a Systematic Investment Plan. Here, you invest a fixed amount every month into your fund and you get units allocated to you.
3. Don’t chase performance
A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.
Ditto with a mutual fund. Every fund will show a great return in the current bull run. That does not make it a good fund. Track the performance of the fund over a bull and bear market; only then make your choice.
4. Don’t ignore expenses
When you buy and sell shares, you will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into your profits especially if you are selling for small gains (where the price of the stock has risen by a few rupees).
With mutual funds, if you have already paid an entry load, then you most probably won’t have to pay an exit load. Entry loads and exit loads are fees levied on the Net Asset Value (price of a unit of a fund). Entry load is levied when you buy units and an exit load when you sell them.
If you sell your shares of equity funds within a year of buying, you end up paying a short-term capital gains tax of 10% on your profit. If you sell after a year, you pay no tax (long-term capital gains tax is nil).
What you MUST do
1. Get rid of the junk
Any shares you bought but no longer want to keep? If they are showing a profit, you could consider selling them. Even if they are not going to give you a substantial profit, it is time to dump them and utilize the money elsewhere if you no longer believe in them.
Similarly with a dud fund; sell the units and deploy the money in a more fruitful investment.
2. Diversify
Don’t just buy stocks in one sector. Make sure you are invested in stocks of various sectors.
Also, when you look at your total equity investments, don’t just look at stocks. Look at equity funds as well.
To balance your equity investments, put a portion of your investments in fixed income instruments like the Public Provident Fund, post office deposits, bonds and National Savings Certificates.
If you have none of these or very little investment in these, consider a balanced fund or a debt fund.
3. Believe in your investment
Don’t invest in shares based on a tip, no matter who gives it to you.
Tread cautiously. Invest in stocks you truly believe in. Look at the fundamentals. Analyse the company and ask yourself if you want to be part of it.
Are you happy with the way a particular fund manager manages his fund and the objective of the fund? If yes, consider investing in it.
4. Stick to your strategy
If you decided you only want 60% of all your investments in equity, don’t over-exceed that limit because the stock market has been delivering great returns.
Stick to your allocation.

Read more...

How to read and act on Daily Newsletters

How to read and act on Daily Newsletters
In the following paragraphs, we shall explain you as to how to read the figures to arrive at any Trading/ Investment Strategies.
First of all, be clear that we believe in Charts and figures than long stories with tens of ‘ifs’ and ‘buts’. With little knowledge of Technical Analysis, one can see the Basic Trend, Patterns, Support/ Resistance Levels, Breakouts, Gaps, Overbought/ Oversold Zones, Short/Long Term Moving averages crossovers and much more. Just a glance at any chart can give you a hint of possible market action in near to long term.
1. Support/ Resistance Levels (Daily/ Weekly/ Monthly Trading Strategy)
As the name suggests, there are many traders who trade only on support & Resistance levels. The table contains following details i.e. Name of Scrip/ Last Close/ 5-Period Low/ Support 2/ Support 1/ Trend Level/ Resistance 1/ Resistance 2/ 5-Period High.
In Conjunction with other indicators & tools, this table can use for:
1. Fresh Longs or Shorts on Trend Change Levels.
2. Booking Part/ Full Profit in Long/ Short Positions
3. For Quick gains of 1 to 5 Rupees on breaking of previous High or Low
Every Newsletter (i.e. Daily/ Weekly and Monthly) has a similar table to decide Daily/ Weekly/ Monthly Trading Strategy. The Support / Resistance levels are different in every table based on the Open / High/ Low / Closing of price in Daily/ Weekly/ Monthly Charts.
The table is in order of Bullish to Bearish on the basis of last closing Price vis a vis Trend Level. If the Scrip price is trading Higher than Trend Level, it is a positive sign for bulls and vice a versa. Traders can hunt for the scrips, which are on verge of crossovers to bullish to bearish or otherwise. Above Trend Level, scrip is likely to face resistance at ‘Res-1’ then ‘Res-2’. High of last 5-Periods also acts as resistance. Traders can make an entry for few Quick Bucks if scrip breaks 5-Period high to make a new High. The same rule shall apply on Downside below Trend Level.
2. Overbought/ Oversold Scrips in (5-ROC/ 12-ROC/ 9-RSI/ 14-RSI/ William%14R)
Similar to Support/ Resistance Table, this can also be used by Daily/ Weekly and Monthly Traders and Investors to decide their strategy. The figures 5/ 12/ 9/ 14/ 14, are the Period of Charts like in Hourly Charts it is 5-Hour ROC/ 12-Hour ROC/ 9-Hour RSI/ 14-Hours RSI etc. In Table of Daily/ Weekly/ Monthly, this Period will change to Days/ Week & Months respectively.
In Conjunction with other indicators & tools, this table can use for:
a. Profit Booking (in Full or Part)
b. Fresh Entry in full or part
c. Extending Trailing Stop Loss
d. Sign of Caution in Long or Short Positions
The table contains 8-10 most Highly Overbought/ Oversold scrips in each category. Suppose a Scrip is overbought in more than 2 tables, it warrants caution in Long Positions through any script can continue to remain in Overbought Zones for many periods part profit booking is always advisable. Similarly, Highly Oversold scrips in more than 2 tables suggest that trend is likely to change from bearish to bullish. If other indicators support, gradual buying can be started but with Stop Loss.
3. Bar Reversal (Up/Down), Candlestick Engulfing Patterns (Bullish / Bearish), Doji Pattern, Volatile 
a. Bar Reversal (Up/ Down): It is a very good indicator for Day & Swing Trading particularly after a significant rise or fall over a number of periods. Bar Reversal in Weekly/ Monthly Charts is very useful as ‘Advance Indicators’ to catch short-term moves on either side. For Example in the case of Upward Weekly Bar-Reversal, Investor can buy gradually on declines or Panic selling for an impending short-term up move. Same equation applies in case of Downward Bar reversal. Weekly/ Monthly Bar Reversals after a reasonably long Bull/ Bear phase indicate Trend Reversal if supported by other indicators. (IMP: This indicator should be used in conjunction with other indicators with use of Stop Loss mechanism)
b. Japanese Candlestick Engulfing Bullish/ Bearish Pattern: It is a Japanese Candlestick Reversal which is refined and more powerful form of Bar Reversal. When a ‘White’ candle engulfs a preceding ‘Black Candle’ it is called Bullish Engulfing and when a long Black Candle engulfs preceding ‘White’ candle it is termed as the Bearish Engulfing pattern. It can be used for Quick Trading if a stock is moving up/down for many periods and other indicators like Overbought/ Oversold Zones are in favor of decline/ recovery. Weekly/ Monthly Engulfing Patterns after a reasonably long Bull/ Bear phase indicate Trend Reversal if supported by other indicators
c. Doji Star (Japanese Candlestick Pattern): It is again a Japanese Candlestick Pattern in which Stock Price closes near its opening level after a reasonable High/ Low. A Doji Pattern gaps above or below a While or Black Candlestick. It is a Reversal signal, confirmation of which comes during next Trading Day. ‘Smart Traders can keep a watch on such stocks and trade Long/ Short on confirmation with the help of other indicators like Overbought/ Oversold, market sentiments etc.
d. Volatile Stocks: As commonly known volatile stocks provide the better opportunity for Day and Swing Trading. This column gives the list of stock in which the gap between High & Low of the last 3 periods in comparison to close is too high. This is just for guidance purpose. Traders must see support/ resistance and other tools before entering any trade on the basis of this table.
4. Gaps (Upward/ Downward > 0.50%): 
Gaps are spaces left on the Bar Chart where no trading has taken place. An Upward Gap is formed when the Lowest price of the day is higher than the highest of the previous day.
Downward gap is formed when the Highest Price of the day is lower than the lowest price of the previous day. There are 3 type of Gaps i.e. Breakout Gap (When price moves out of any important Pattern), Continuation Gap and Exhaustion Gap (indicating termination of an upward or downward move). We have given a filter of 0.5% of the stock price to avoid any whipsaw movements.
5. Bullish & Bearish Stocks (For Intra-Day):
Based on Technical Analysis of Extreme Short Term Charts i.e. 5 Min/ 30 Min & 60 Min, we short list a few stocks which are on verge of Bullish/ Bearish breakouts, at Crucial Support /Resistance or in highly Overbought/Oversold zones or stocks which have broken any chart pattern The Stocks can be put under ‘Watch List’ during Market hours for possible move on either side for Quick Profits by Day traders.
6. What the Charts Foretell Now : (In Detailed Newsletter, Part – B, Only)
Based on Technical Analysis of Extreme Short Term/ Medium Term Charts i.e. 60 Min/ Daily & Weekly, in short, we give our views about certain Stocks (15 to 25). Targets of such observations are generally achieved in next few days until and unless stated otherwise.
7. Bulls & Bears (Technical Charts): (In Detailed Newsletter, Part – B, Only)
One Charts can say much more than words. We give minmum 2 Charts on week days and 4 charts in weekly Newsletters, about select stocks with important chart patterns with other indicators like Volume, RSI, ROC, Momentum, MACD, OBV, Moving Averages etc, with tentative targets for Short or Medium or Long Term. Very Useful for those having little knowledge about Technical Analysis or for experts who need confirmation of their opinion.
8. General Buy/ Sell Recommendations: (In Detailed Newsletter, Part – B, Only)
Based on Daily/ Weekly Charts, we prepare a list of Bullish and Bearish stocks with their tentative targets for Extreme Short Term, Short Term or Medium Term. Investors and Traders can create their positions or Book profit gradually for the recommended time frame. For Example, If any stock is giving bullish indications for medium term, investors can gradually pick up this stock on every decline with major support as Stop Loss Level. Similarly, if any stock is giving bearish indications for extreme Short Term, one can book part profit on every rise and wait for the decline to re-enter the stock.
9. If I were a Trader (Similar to Rs10 Lac Portfolio): (In Detailed Newsletter, Part – B, Only)
This is just a Model Portfolio for the guidance of investors who do not want to put their efforts or time to decide their Short Term Portfolio, we suggest the stocks under ‘If I were a Trader’. It is not necessary to follow this Model Portfolio. Investors/ Traders can use their own research and arrive at trading decisions by taking help of our Newsletters.

Read more...
Technical Analysis When to Trade

Technical Analysis When to Trade

Technical Analysis When to Trade

The keys to successful Trading or Investing in the Stock Market are knowledge, discipline, and patience. Assuming that, you have some knowledge, the best way to achieve discipline and patience is doing your homework and having a plan of action ready before putting that plan to work. Though it may not guarantee success it will definitely increase the odds of winning in any financial market. When it comes to applying those technical principles, the most difficult part of the process is the actual purchase or sale in the trading.  The final decision as to when to trade, how to trade and how much to trade and the type of trading orders to imply.
Day Trading has also the same principles of any financial market. The only real difference is the timing as it covers the very short term. The time frame that concerns us here is measured in hours, minutes and seconds as opposed to days, weeks and months but the technical tools implied remains the same.
(i) Trading on the break out from Patterns
(ii) Trading in overbought/ oversold zone
(iii) Trading at support and resistance level
(iv) Trading at the breaking of trend lines
(v) Trading at the percentage replacement
(vi) Trading while making the use of gaps
(vii) Trading on negative and positive divergences 

The most effective way to formulate a trading strategy is to combine all of them. After the initial decision to buy or sell has already been made the above concepts can be used to fine-tune entry or exit points. Use of Stop Loss and applying of strict discipline will definitely help one become a successful trader. 

Read more...