Vicky, to trade stock for 1 month period, u need to be looing at weekly chart and daily.. and try to be no the right side of daily trend.
That rules of chart reading / market behaviour do not change much with the timeframe.
Bigger timeframe, bigger stoploss, bigger profit, less number of trades.
Smaller timeframe, smaller SL and smaller profit, more trades.
I am not sure, how comfortable you are in that.. but if u just define few rules for yourself to read direction of trend, sign of trend reversal, and strength of trend.. that is more then
enough. Market generates too much noise and we need to learn to cut that noise and interpret it. One or 2 bars of move does not change the direction. We need more info to
make the decision.
Whenever u take a position, ask yourself following question
1) What is the current trend of stock in my trading timeframe (say for swing trading, u decide to look at daily chart and get this trend from daily chart)
2) At what price level, my view about current trend will change.
3) What is the possible target points on my chart.
4) What is your Entry, stoploss, and exit levels, and hence Is Reward to risk ratio justify taking the risk.
And just trade in the direction of the trend.
Don't get emotional with the position. We use ITC products, ITC has great mgmt, that all is fine to join ITC as employee. In my view, they are irrelevent if one wants to make money trading
ITC stock. When market goes down, ITC will also fall.. and if you timeframe is 1 month, then u may be holding a loser trade in hand. With each day's loss u will start falling more and more in
love with this stock cause pain of cutting loss will be too much.
Hence, I always sugggest to know the point where your view change about trend.
As per my reading of current ITC chart,, below 219 level, there are many pattern that will give sell signals. The price is well below the downward sloping trend line... the upmove (as per my reading) when it fell below 230, about 5 days back. Thats when it made Lower High which is Confirmation for trend reversal after break of trend line, and making lower low.
Next possible support for this is around 190 level. On the upside, the resistence zone is between 240 and 250.
Stock selection is for swing trading can be very complicated or simple. As a simple rule, I will suggest
- Pick your subset of stocks from 2 or 3 sector. All over the media we know about the hot sectors.
- Select Nifty companies for those sector
- Selection CNX Midcap companies for those sectors.. This might give u about 20/25 companies which is more then enough I guess.
- If you have time, then analyse them for 4 qustion given above and select the stock with good reward risk ratio.
Returns in Trading are not generated by stock pick but by how we manage the risk and take profits. Money is made/lost by our Exits... not by entries. So do focus on those factors. Most of us ignore them.
Hope this helps
Happy Trading.
That rules of chart reading / market behaviour do not change much with the timeframe.
Bigger timeframe, bigger stoploss, bigger profit, less number of trades.
Smaller timeframe, smaller SL and smaller profit, more trades.
I am not sure, how comfortable you are in that.. but if u just define few rules for yourself to read direction of trend, sign of trend reversal, and strength of trend.. that is more then
enough. Market generates too much noise and we need to learn to cut that noise and interpret it. One or 2 bars of move does not change the direction. We need more info to
make the decision.
Whenever u take a position, ask yourself following question
1) What is the current trend of stock in my trading timeframe (say for swing trading, u decide to look at daily chart and get this trend from daily chart)
2) At what price level, my view about current trend will change.
3) What is the possible target points on my chart.
4) What is your Entry, stoploss, and exit levels, and hence Is Reward to risk ratio justify taking the risk.
And just trade in the direction of the trend.
Don't get emotional with the position. We use ITC products, ITC has great mgmt, that all is fine to join ITC as employee. In my view, they are irrelevent if one wants to make money trading
ITC stock. When market goes down, ITC will also fall.. and if you timeframe is 1 month, then u may be holding a loser trade in hand. With each day's loss u will start falling more and more in
love with this stock cause pain of cutting loss will be too much.
Hence, I always sugggest to know the point where your view change about trend.
As per my reading of current ITC chart,, below 219 level, there are many pattern that will give sell signals. The price is well below the downward sloping trend line... the upmove (as per my reading) when it fell below 230, about 5 days back. Thats when it made Lower High which is Confirmation for trend reversal after break of trend line, and making lower low.
Next possible support for this is around 190 level. On the upside, the resistence zone is between 240 and 250.
Stock selection is for swing trading can be very complicated or simple. As a simple rule, I will suggest
- Pick your subset of stocks from 2 or 3 sector. All over the media we know about the hot sectors.
- Select Nifty companies for those sector
- Selection CNX Midcap companies for those sectors.. This might give u about 20/25 companies which is more then enough I guess.
- If you have time, then analyse them for 4 qustion given above and select the stock with good reward risk ratio.
Returns in Trading are not generated by stock pick but by how we manage the risk and take profits. Money is made/lost by our Exits... not by entries. So do focus on those factors. Most of us ignore them.
Hope this helps
Happy Trading.
