iCharts Discussions

[Gemini]

Based on various methods shared here and my observations, I submit following method for swing / positional trading of individual stocks.

Stock selection:

1. Select a few stocks (say 16 to 20), from different sectors ( banking, infra, pharma, telecom, IT, FMCG etc.)
2. Watch these at least once a day, preferably after 3 pm.
3. Select stocks where ADX is greater than 20 for further analysis. This will reduce probability of stocks likely to have sideways movement (whipsaws). Also ensure that ADX is not below both +DMI and –DMI line.

GOING LONG:

Now look for following chart pattern for going long:

(At least 2 conditions to be satisfied)

1. PARSAR to be below stock price
2. +DMI to be greater than –DMI
3. Ema 3 to be greater than ema 15

STOPLOSS:

If pattern is in place (after ~ 3 pm), go long with SL as days low. From next day onwards, keep trailing SL as lower of the previous 2 days.

BOOKING PROFIT:

Conservative: When price closes below ema 3

Less Conservative: When PARSAR changes direction.

Aggressive: Wait till at least 2 conditions for going short are satisfied.

GOING SHORT:

Look for following chart pattern for going short:

(At least 2 conditions to be satisfied)

1. PARSAR to be above stock price
2. +DMI to be less than –DMI
3. Ema 15 to be greater than ema 3

STOPLOSS:

If pattern is in place (after ~ 3 pm), go short with SL as days high. From next day onwards, keep trailing SL as higher of the previous 2 days.

BOOKING PROFIT:

Conservative: When price closes above ema 3

Less Conservative: When PARSAR changes direction.

Aggressive: Wait till at least 2 conditions for going long are satisfied.

HEDGING:

As the position is likely for more than a few days, following is suggested:

1. Use options to go long / short (Buy call or buy put)
2. Alternately, protect the futures position through call / put as hedge, i.e. if one has taken long position and bought futures, one can buy put 9and vice versa).

EXAMPLES:

1. RCOM : Long triggered agaon on 18th (first triggered in first week of April)
2. Hindalco: Long triggered today
3. DRREDDY : Short triggered today
4. Relcap: Pattern indicates long but ADX is below 20, likelto to have sideways movement.

PDF file with these details and charts is attached.

Happy Trading !

[akoundinya]

Hi,

Parabolic SAR indicator is not present in Premium service. Can you suggest an alternative pl?

Thanks

[Gemini]

Hi,

I use JCharts (Premium). PARSAR (Parabolic SAR) indicator is available. See 2nd button from left on 2nd row at top. ( Chart highlighting this button) attached.

One more key point that we shall remember : Avoid taking position when major event ( Election results, budget, financial results, major policy announcements etc. is expected in next few days).

Happy Trading ...

[akoundinya]

Hi,

Thanks a lot for the info.

[Gemini]

Hello friends,

Maruti seems to be ready to make an upmove. ADX value is 26 and priceline is above PARSAR. Need to wait for at least one more condition to be satisfied. LTP: 1545, ema3: 1537 and ema15: 1549.

Move above 1565 (38.2% retracement of last major fall) is likely to lead to positive movement.

Let us wait for the trade and not jump in at this time. Remember, trigger conditions are awaited.

Happy Trading !

[s.muthuswamy]

On 21-6-13 Maruti has crossed 3dema intraday and closed above it. Hence thare is every possibility of opening gap-up on Monday and rise/ colse well above its previous close.

[s.muthuswamy]

On 21-6-13 Maruti has crossed 3dema intraday and closed above it. Hence thare is every possibility of opening gap-up on Monday and rise/ colse well above its previous close.

[Gemini]

Dear Muthuswamy,

Yes, your observation is correct that price has crossed ema3 on eod basis.

System that I follow (posted here) allows me to take action only when at least 2 of 3 conditions are satisfied (ema 3/15 crossober, PARSAR and DMI crossover). I shall wait for that to happen.

I am making an attempt to being more disciplined (wrt my system) !

Do keep posting your observations.

Happy Trading !

[Gemini]

Hello Friends,

Lupin ( LTP: 761) has met all conditions and turned bearish. However, there is a strong support in the zone 750-744.

I shall now watch this scrip for next 3 days and take a decision to go short, if it continues to meet minimum 2 conditions or breaks below 744.

(My recent trades based on this system: Shorted DRREDDY at 2114, holding the position, Shorted IndusInd bank a few days ago, moved from future to put and squared off yesterday (panicked as scrip moved up well). However, I realised today that I should have continued the trade. )

Thanks to Stevenmart who has shared this set-up for Nifty earlier on the forum.

Happy Trading...

[Gemini]

Hello Friends,

Following stocks have met at least 2 conditions and turned bullish today:

1. Cipla (387)
2. Dr Reddy (2164) - Had short position where TSL triggered today.
3. Jubiliant Food (1039)
4. ONGC ( 320) - Have taken long position today.
5. TCS (1491)

Have tane long posotion for ONGC today. For rest , will observe for 1/2 days and take position on confirmation of move.

[Gemini]

Hello Friends,

Sharing example of IDFC which is about to turn bullish based on PARSAR, ADX ( DMI cross-over ) and ema 3 /ema15 crossover.

I suggest to wait for first 15 minutes and note high reached during this period. This is OR-H (Opening Range - High). One can go long with trigger order few points (say 50 paise) above OR-H with Fridays low as SL.

Considering that this trade is for more than a few days, I recommend buying out of the money call (140 strike price, for example) and stay long till stock remains bullish. With options, we know our maximum loss and can remain emotion-free (fear free !).

May like to go through my notes uploaded earlier in this thread.

Happy Trading.

[Gemini]

Response to JK99:

Yes, your observations are correct. As per the "rules" there is no trade, as Nifty is likely to be be in a range. For disciplined trading, particularly if you are a new trader, follow the rules strictly. This market gives ample opportunities to make trades.

Many of us think that there are only two possibilities: Either to go long or to go short. I have learnt ( through severe beating by market) third possibility: To be out of the trade and watch for the right signal.

It is always better to protect capital.

Bye.