The author is a SEBI Registered Research Analyst (INH000004796) and a NISM certificate holder in Equity Derivatives Market. The certification is provided by National Institute of Securities Markets.

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Thursday, December 22, 2016

Key ingredients of a trend trade!!

There are many ways in which markets can be traded. It entirely depends on the approach and the time horizon one is looking at. One can day trade, or carry the position for couple of hours or couple of days. Its a matter of choice and comfort. In this post i will try to come up with a way to trade along with the trend. I will try to put forth the ingredients which I feel are important and which can make a difference to short term trading.

The three ingredients which I look for while trend trading are as follows:
1) The actual trend itself. (Uptrend/Downtrend)
2) Location of value on the chart
3) Trigger to take the trade.

Lets look at some charts:

The method works on any time frame but I prefer a minimum of 15 min TF.

The comments in the chart are self explanatory.
In the chart, the following points are looked at:
The trend , which is down.
The location of value on the chart.
Trigger to take the trade.
When all of the above three points fall in place, one can have a suitable SL and join the trend.

Another chart:

The above is the BNF 30 mins chart. All the three criteria met here too. SL can be applied above the recent high where price rejection took place.

Another chart:

The above is the Aurobindo Pharma hourly chart. Same criteria applies here too.

I hope I was able to put across the idea. Comments are welcome.

In the above examples, I have taken BNF trade and Auropharma trade.

I will come up with long trades too along with some which hit SLs and make a different post.

Thanks for giving a read, I hope the post helps your trading.

Thursday, December 08, 2016

How Divergence trades work and how to enter??

One of the ways to enter into a trade in taking note of divergence, which works very well. The above chart of Natural Gas Dec Futures shows. The entry could be at the MACD cross or more conservative entry can be cross of EMAs (one can follow his own). SL can be 2ATR from the entry.

Another example:

Here again the entry can be done on the MACD cross after the divergence with SL 2ATR below the entry.
Try incorporating the above strategy in your trading and you can feel the difference.