what makes u to book ur profit early?
why are u cutting ur big winner into small winner?
what should u do in order to maximise ur winner?
Solution is multitimeframe analysis
read on,
An article adressing that follows
thread 1/14
Reason for Missing Big Moves & the Logic to Tackle that
Most of the stocks which r looking overstretched in uptrend that taking an entry would be very risky,
will have a great looking potential in weekly charts.
Higher TF reveal the trend which is in place has just started
2/14
Look at the daily chart of Bigbloc,
it has doubled from the price of May-2020.
It’s doubled in 4 months.
That’s too furious a rally.
In this TF, it’s definitely looks to have went up too far unreasonably.
And it’s too risky to bet on its further upside potential.
3/14
But have a look at its weekly chart.
Scenario here is completely different.
It’s a recent breakout from a flat top structure.
Good volumes are already in it to push much further ahead.
It’s a wonderfully looking chart in this TF.
4/14
In most cases,
whatever looks like exhausted in LTF,
would psychologically push us back from taking an entry in it.
We wait for a reasonable correction in it,
only to see it’s going up up and up again.
5/14
A view from HTF,
is the logical solution here.
U should never, make view based on LTF trend.
If u are into short to medium term delivery trades, avoiding what happens in weekly TF is a big mistake.
6/14
he same logic applies in all time frames in trading.
The volatile moves in LTF which u are trading in is the single biggest reason to profit prematurely.
7/14
You should always keep a tab on what being happened in HTF,
until unless something clearly visible there which suggests a trend reversal,
all the see-saw moves in LTF is a mechanisms to shake the weak hands off the positions.
8/14
Even in the case of a scalper who trades in 1min chart,
if he choose to catch the direction of the trade which is in line with TF like 15min,
he adds lots of favorable pointers to his advantage where he might catch a way bigger move.
9/14
A trend in 1 min lasts for 10-20min while a trend in 15 min lasts 3-5hrs.
A clear perspective about the trend in 15min might even enable him
to catch an entire move even from TF as small as 1min
That’s how multi time analysis should be used in your advantage.
10/14
The article is basically focused on the technical aspects of the trading.
There are lots of emotional & psychological traits involved in dealing with this which kept completely untouched here.
11/14
Those things cannot be generalized as each and every person has his own personal characteristics
and
no one size fits all.
Even a single size won’t even fit the next person let alone all people.
There is no clear way of explaining how to build the required mindset.
12/14
You cannot have the emotional stability
when ur hard earned money at stake,
without being systematic
and
have strong conviction on the method one use.
The proper way to build conviction is through backtesting your method and fine tune it in the live market.
13/14
The trust you develop on it based on the data which never lie. That’s the root of building the right mindset and psychology from. Work on the right factors to evolve urself into the better being as a trader.
Best Wishes
14/14
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Pullback trading - trading an instrument when there is a weakness in the major Trend. For example suppose a stock is going up since last more than 80 days & is trading close to multi year highs it can be considered to b in upTrend.
1/18
As an additional confirmation one can make sure that moving average are perfectly aligned according to their length; 20>50>100>200. These two conditions filter all the stocks which are in bullish trends in medium term. This is where one stock qualifies for pullback trading.
2/18
One should avoid penny, illiquid and circuit mover stocks. Scan for stocks with price >20 and average daily volume > 100000 and also there should not be any open circuit freeze in recent past. This will remove nearly all the untradable stocks from WL.
The scrip has given an almighty breakout into new ATH last month and this month its being pulled back substantially. Here first criteria of strong bullish trend in HTF is satisfied with a fresh ATH breakout.
Step 2: Chk weekly TF to assess the details of breakout
2/7
1. BO is from an inv. H&S pattern 2. There was 3WTC pattern just prior to BO 3. BO had a strong follow up week with higher ROC 4. Pocket picot volume on BO and follow up bars 5. Pullback lack volume and last bar is bullish pinbar
Its simply an approach by means of which a trader is able to make most logical decisions and act precisely upon it. There is nothing else to it
How to build it?
It varies from one trader to another. I will exemplify one of my friend here
1/7
He had severe issues with cutting his loss. He will just keep holding it hoping for a reversal to wipe off his loss. He never take SL.
But he found a seemingly stupid but practically wonderful solution to it.
Instead of SL hit , he started thinking "Sunny Leon hit"
2/7
It was around that time Sunny Leon started acting in main stream movies as well. He just gave a definition to SL so that he is not scared of it any more, rather likes it very much.
What happened is that he wasnt worried about cutting loss anymore.
3/7
Most traders conceive that strongest chart patterns are the ones which are most visually convincing. They are pushed to think those patterns offer high probability trades.
But the truth is patterns are just consolidations where trend continuation demands accumulation
1/8
and reversal demands distribution (uptrend case). This criteria has nothing to do with how the pattern looks to ur eyes. Trend continuation patterns starts with profit booking where price might dip with comparably big red bars which fizzles out faster.
2/8
Price reaches a point where buyers find it as fair value. It's here price starts accumulation. Price makes sideways trendless move here till supply no longer able to contain price inside the range. It's here demand finds further strength and price goes up.
3/8
Look at the table below. Its bid/ask table for an imaginary stock
CMP is 149.90
Highest bid is at 150 and lowest ask is at 150.
So the next trade will happen at 150 increasing the price.
But buy orders for 2500 quantity are there at 150 while there is only 200 quantity to sell.
What will happen now?
There are 2300 pending buy order at 150 with all the asks at 150 os exhausted. They will have to buy at next best ask level which is 151.
2/6
He will buy all the 150 number of shares available at 151. Now the price increased again
CMP 151 with huge quantity to buy but poor qunatity to sell
Price movement depends on how rushed or agressive either parties are
3/6
When a conceptual content is posted in Twitter, how would u treat It?
Absolutely all the info can b tweeted as one liner punch dialogue. But some topics, some handles, sometimes posted as fairly lengthy threads.
Where does it differ??
What does it offer??
Suppose I post a lengthy thread in 10 tweets, what I attempt is to provide a primer on the subject. Putting it more simply, its like a 7min Highlights of a 7hr ODI match.
Similarly a thread gives u a very good idea about a topic so that u get a fair understanding on it
2/11
It helps u to decide.
If u found it not good enough, u can leave it then & there.
But If it's suitable to ur trading, then u need to go through the reference books, videos and blogs to dig it in deep and study it in-depth.