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Strategies - Strategy 1 - Fundamentals - Results trades (Results days…
Strategies
- Strategy 1 - Fundamentals - Results trades
Results days usually create a huge flow around key levels.
Trade during the day when results are declared or after the day.
Trading results is tricky and should be practiced well before taking risky trades, as the morning move can be quite furious.
Analyse the P&L and identify if there is operating leverage and/or better working capital management.
Form a negative or positive bias first. Either the results can be super positive or super negative or in-line. In all cases, don't build a bias in the stock. That means positive results do not mean gap-up; they could also mean, gap down and then going up. Similarly for negative results.
The next step after analysing the results is to observe the technical levels (Fibonaccis, trend lines, ,moving averages, any other aspects)
Then look at the Market Profile chart for at least a week or at least two to three days for any balance formation or trend formation.
Tomorrow when you are trading or when you are trading during the day, you should have market view in hand. This is the most important step.
We will take a trade only if market fundamentals are in our favour.
When the market opens or during the intraday, form a clear opiniion about the market before taking a trade. It should be a buy or a sell in the market. Then this stock will get equal power to go on your side.
Entry: For entry, you should have the key option trigger levels ready. You should know the call writing and put writing levels very clearly.
Entry: Identify all the key technical levels (fibs and moving averages mainly) and note them down.
Entry: Identify all the key Market Profile levels. You should know them before the market opens for the day.
Entry: The stock should have positive 9
45 crossover and should be above the VWAP for a buy entry. The stock should have a negative 9
45 crossover and should be below the VWAP for a sell entry.
Entry: Just before the market opens, look at where the preopen closes at 9.08am. That indicates where huge supply or demand is.
Entry: Once you are done with all these steps, look at the Nifty orderflow and profile for a possible direction.
Entry: Identify entry locations around option levels. For example, if the future/spot is around 752, then enter with a stop loss of 749.
Generally, the first one hour gives the best trades. Because big boys always love open and close times. Foreign players love the open as the flow is very huge than close. Domestic mutual funds usually love the close.
Trading as a portfolio.
During trade: Once you enter, always be wary of how the stock is behaving at the key levels. You can run the trade with multiple lots, if you have more capital. Else keep your daily profit target as the criteria.
Exit: What determines your exit. Rule 1: Your crossover should not be tiring. That is the stock should not be breaking 9ma line or at least the next line below (VWAP or 45ma). Rule 2: Observe the market. It should not be changing the direction. Rule 3: Use Market Profile zones are levels where you can exit clearly.
Execution: Always be ready with a market order but don't give it.