Part 1 – The Shortlisting process
Part 2 – The Evaluation process
I am typically left with 4-5 stocks out of the 50 in my opportunity universe which show a recognizable candlestick pattern. Then I take a closer look at these four to five charts, spending each chart around 15 to 20 minutes. My procedure for assessing the shortlisted charts includes:
Normally out of the 4-5 stocks shortlisted, at the most one or two may be suitable for a trade. Days when there are no trading chances do occur. The choice to refrain from trading is an important decision in itself. Keep in mind that this is an exacting set of criteria; if a stock fulfills all the conditions, my belief to trade is quite strong.
This module has consistently emphasised the same point; once you place a trade, let it run its course. Unless trail stoplosses are applicable, stay put and wait for either your target to be achieved or your stoploss to be triggered. Keep in mind that trades are highly vetted, so the probability of succeeding is high. It’s, therefore, sensible to stay confident and follow through with conviction.
The Scalper
Skilled swing traders may consider scalping as an additional trading option. This system involves opening a position for a brief period, usually a couple of minutes. Typical scalping trades involve…
The total profit is Rs.2644, after taking into account any applicable charges.
A scalper is a highly-skilled trader with a keen eye for price movement. They use charts with short time frames like one and five minutes, to make their decisions. This type of trader is focused on executing many trades within their day, aiming to take advantage of the smaller changes in stock prices for a short space of time. Their aim is simple – complete numerous trades and profit from relatively minor price fluctuations.
If you aspire to be a scalper, here are few guidelines –
3, A risk-reward ratio as low as 0.5 to 0.75 is sufficient for scalping.
Scalping is a technique for day trading that necessitates alertness and robotic-like methodology. One who profits from scalping must be able to accept market volatility, no matter how it may move.
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