Thread by @scorpiomanojFRM

#TRADING Intraday - #INERTIAMETHOD Inertia - A property of matter by which it continues in its existing state of rest or uniform motion in a straight line, unless that state is changed by an external force. This is the law of physics.

Inertia method applies this law of physics for selecting stocks for intraday trading the next day. Stocks that are in motion are selected with the assumption that it might continue the motion (uniform motion).

Method -
Select stocks that satisfy the following conditions - To be done at EOD
a) Stocks with latest daily range greater than 1.25 times of 10 day Average daily range AND
b) Stocks with latest body size of the candle consuming 75% of the daily range.

Usually there will be less than 10 stocks
Next day, ie trading day,
a) Enter long only if the prev day candle is bullish; Entry will be breakout of previous day high with stoploss of few ticks below prev day high / low of the breakout candle. Don't enter during gap up.

b) Enter short only if the prev canle is bearish; Entry will be breakout of prev day low with stoploss few ticks above prev day low / high of breakout candle. Don't enter during gap down.

Target based on risk appetite; can use camarilla pivots, long positions can use R4 or 75% of R4-R3 as targets (r3+0.75(r4-r3)). Similarly for short positions can use S4 or 75% of S3-S4 as targets (s3 - 0.75(s3-s4)). Can use any other method also, for eg some MA.

Eg. 09/05/2019 - CEAT
Scanning of stocks based on the condition can be easily done in Amibroker.

Correction in the image: To be read as - Stop at few ticks above prev day low, preferably high of the breakout candle.