Tuesday, March 31, 2015

The simplest way to earn from Intraday trading

Only one factor is to be considered during Intraday trading. Say we trade in Nifty Future. All we require to know WHEN big buyers (professional buyers) are entering it OR when big sellers are poised to exit.
That's all we need to know. Why, who, how - nothing matters.
So as big buyers or sellers enter or exit Nifty Future, we need to catch them in their moves and make our money.
Am I being simplistic? Not at all. I am just being to the point, without confusions and complexities of stock market trading which old fashioned traders and confused technical analysts have created.
With technology (live analysis of real time data) providing easy to understand view of things happening (live price charts), being able to understand big buying set up and big selling set up is easy.
Big buying will take the Nifty Future up forming an upper trend - the same old fashioned trend first discovered by Charles Henry Dow in 1889/90. Similarly, big selling will see a down trend. (However, my system has even improved upon Dow Theory by providing even earlier entry points).
Big buying and big selling happens over a period of time, ebabling profits booking by players are different price levels. Hence the zig zag pattern - the wave formation.
Up to here is ok for making profits in 50% of the days. To make your trading near 100% accurate, you will need more.
1. Strength of the trend
2. How far price will move
3. Any additional supporting evidence of the trend being sustainable long enough to deliver reasonable profits
4, What are the pitfalls which can stop the trend from progressing
5. How far the Buy/Sell price is from Bear Level and Bull Level

No technical analysis book will tell you about Bear and Bull level but these are the two most crucial levels. The best trade will be the one above / below the levels. I call these trades near 100% accurate trades.
I will draw an analogy from the 1971 Khemkaran sector battle between India and Pakistan. In a swift move, the Pakistani tanks rolled deep into Rajasthan sector virtually unchallenged. The thinking at Pakistani camp was, breakfast at Jaipur. Lunch in Delhi. But then the Indian Airforce struck. Stretched over miles of sand dunes with no cover, Pakistani tanks became sitting ducks. The entire battalion was annihilated and Pakistan was defeated.
A similar war game is played our virtually every time the Nifty Future reverses. Say from being dragged down by the bears, it starts inching up with bulls entering in strength. You will see Nifty climbing up to a particular level where it will face severe resistance from the bears. At this level, the bears suddenly seem to have taken a staunch stand - not a single point beyond this - to stop the bulls. Some times, the fight may continue for hours before any of the side gives up. If the bears relent, Nifty Future will jump up past the level and deliver a strong profit. If the bears win, Nifty Future will drop back from this level and bulls will back down.
So knowing this level is crucial for Intraday traders. If the Buy or Sell level provides more than 15 points of gap, there still may be a quick profit taking opportunity as price will at least move up to bear level or move down to bull level. Guaranteed. If the gap is less, the Intraday trader needs to buy (or short) only when the price moves 2 points past that level. So if the bull level is say 8507, the actual buy should be done only at 8510 because till then, the bears may still be able to defeat the bulls.
On selling, if the bull level is 8507, the short trade need to be taken only at 8504.
There are about 3 reversals every day. So making size able profit from such near 100% accurate trades is actually child's play.
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