There are only 2 principles upon which all the exit strategies are formulated

Telegram: t.me/prodigaltrader

1.Exiting on Weakness – Positional Trades
Ride the trend till it lasts.

thread 1//7
Use a trailing stop loss to stay in the trade for maximum time.
As long as trend is strong,
price won’t hit TSL rather it would move steadily in the direction of the trend.
When the trend loses its strength,
it breaks the TSL where u exit ur holding.

2//7
Few Common methods of TSL are

-Short term moving average such as 30 EMA
-ATR based Methods such as Chandelier Stop/Super Trend
-Break of last Swing low, in uptrend/ or last swing high in downtrend
-Parabolic SAR indicator

3//7
Pros on the methods are squeezing the maximum profit from the trade. Big wealth creators are found and ride this way even for years.
But this is emotionally very challenging to hold one trade for years & many traders aren’t psychologically adaptable to do it this way.

4//7
2.Exiting On Strength – Short term trading such as scalping or day
Scrips are chosen based on high momentum in short term in the past. Betting on its continuation at a faster pace, a trader sets his target already when he enter into his trades.

5//7
Common methods to fix the target

-Floor pivots.
-Fibonacci levels
-Supply/Demand zones
-Important levels from previous day such as PDL, PDH etc.

6//7
One advantage with this method is that
risk/reward in the trade is already determined in all the trades,
be it loser or winner.
It takes out lot of emotional stress in trading.
But disadvantage can be cutting a potential big winners into comparatively smaller ones

7/7

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More from @ProdigalTrader

13 Sep
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
Read 14 tweets
30 Aug
How to trade with least Risk??

Price move in market is always controlled by either of the following mechanism

1. Momentum - Trend
2. Reversion to mean – Counter Trend

See this picture for clarity

1/22
2/22

Suppose we are trading with trend
& took breakout trade

u enter long above the high of the breakout candle.
Its usually a high momentum candle
making it too far away from the base of the break out level.

Hence SL will be wide
Which will severely affect the position size
3/22

Now let’s see a more realistic picture

Here u would see breakouts usually
undergoes deeper mean reversion
rather than going to the same direction.
Such moves always big threat to the SL we place in the trade.
Because in most case reversion goes way beyond breakout level
Read 22 tweets
30 May
Long Thread

Many queries are directed to me specifically asking about potetnial long term investing scrips.
Here am trying to analyse best 10 scrips i track since more than year now and trading with strong price-volume strcture

1/12
GMMPFAUDLR

price broke out in recent past on the back of strong demand an we have a successful retest in the last week with pric clsong near highs
strong momentum and strongly increasing delivery as well supporting the continuation of the trend

2/12
ALKYLAMINE

one of the very few scrip which made a higher low even in the korona fall 2020
A strong breakout few weeks back stalled from going up despite strong demand. Indecision cleared last week with a bar making new highs, confirming accumulation in the last few weeks

3/12
Read 12 tweets
29 Jan
Wesley Gray & Jack Vogel found a method by which measuring the momentum using 12 months of historical data giving list of stocks with enough room for further upside price action

The method as follows

1/4 Image
Monthly momentum values are calculated as cumulative returns over the past 12 months.

The monthly momentum is calculated in 3 steps

1) We calculate gross monthly returns by adding one to the percent monthly return.

2/4
For example, from a monthly return of 5% (0.05), we get the gross monthly return value of 1.05 (0.05 + 1) while from a monthly return of -5% (-0.05) we get a gross monthly return of 0.95 (0.05 + 1.0).

2) We multiply all the gross monthly returns of past 12 months.

3/4
Read 4 tweets
16 Dec 19
1/5

How does momentum divergence occur?

RSI is an oscillator set to oscillate between 0 and 100.
It measures the “ratio of average gain/average loss” based on closing price.
Here gain = closed abv previous close
Loss = closed below previous close
2/5

Simply putting rsi will increase if price has higher close.
Bt here its “average” gain/loss.
That simply means there is a time factor at the denominator.
Putting it simply, if price going up after a correction, yet price goes up only slowly,
3/5

means price closing abv previous close in decreasing percentage, this “average gain” will decrease.
RSI will get only lesser value even though price has made a higher high.
Read 5 tweets
31 Oct 19
trailing stoploss technique - Chandelier Exit (CE)

it is a volatility-based trailing stoploss indicator based on the Average True Range (ATR). it show 2 lines – the chandelier exit long and the chandelier exit short.

1/4
The exit long is used as trailing stoploss for long positions whereas the exit short is used as trailing stoploss for short positions.
The Chandelier long and short are used to compute the value of ATR.

2/4
Then, using the recommended setting of 21 periods, Chandelier exit will calculate the highest high or the lowest low for the same period used to calculate ATR. Lastly, subtract the multiple ATR (recommended setting - multiple of 3 times the Average True Range)

3/4
Read 4 tweets

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