Yash Dugar Profile picture
Jan 2, 2022 8 tweets 4 min read Read on X
An educational #Thread on how 1 can identify "Freakout"(Fake Breakout) explained with practical e.g's so that every1 can understand.

Identifying Breakout is not a big challenge but exiting it at the right time if it "fails" with minor loss is imp. which 90% people don't do.

1/n
1st lets learn how to judge that the Breakout is not sustaining & time to exit the trade has come for once.

With digital content available identifying #Stocks breaking resistance is not a big task but exiting these trades timely if they go against us is the most imp. thing.

2/n
Let's understand the abv with recent e.g of USDINR. It gave a breakout abv 75.6 after 8 months. Though we saw a mild upmove after that but it drastically failed& cmp is 74.5.

Now if some1 bought on breakout then usually most will hold it till now or exit at cmp in distress.

3/n
If any of the following 2 criteria's match then 1 should exit the trade.

* Stock makes a LowerLow, LowerHigh consecutively for 2 days.
* It breaks the low of breakout candle & sustains for 1 day.

USDINR made a LL,LH for 2 days on 17th,20th Dec so exit was at 75.73 on 20th.

4/n
Similar e.g is Bharti which gave a ATH, consolidation breakout on 23rd nov abv 745. The Breakout couldn't sustain & cmp is 684.

Ideal exit was on 29th Nov at 739 when it broke the breakout candle low of 733 & sustained below it on 29th. So it fulfilled 2nd criteria of exit.

5/n
The same theory is valid even for breakdowns which can be seen in Cipla where it broke 8 months tight range on 17th Dec & on 18th broke the breakdown high.

Hence it met the 2nd criteria of sustaining abv Breakdown high & immediately 1 should have exited shorts, built longs.

6/n
The most recent e.g 1 can see is Dow jones which gave a breakout on 29th. However on friday it has made a LH, LL formation which isn't good & if it again makes it on Mon then 1 should exit longs taken on the basis of the breakout on thurs.

So let's watch next week closely.

7/n
"No Capital No Capital Markets" - The above thread is dedicated to same.

1 can always renter such trades but exiting them timely is very imp. & my personal experience says that deciding exiting trades criteria, time is where 90% fail.

THE END.

Feedbacks, views are appreciated.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Yash Dugar

Yash Dugar Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @ydstartupreneur

Mar 27, 2022
An educational #Thread on what type of trades 1 can take & what r the rules for it.

Majorly there r 3 types of trades a trader takes :-

* Breakout Trade
* Breakout Retest Trade
* High risk reward contra trades

Disc. - All the #Stocks discussed are for educational purpose!

1/n
#Breakout Trade!

A Breakout trade is usually a trade where the price breaks a strong resistance/supply level after consolidation. These r considered strong stocks.

To add conviction to our trade we check volumes, RSI, RS etc. for confirmation.

Let's understand with e.g :-

2/n
#ADANIPOWER

It has broken strong resistance level of 135 with strong volumes on daily chart with RSI crossing 70, Prev. swing high which adds more conviction in the trade & makes it a high probability trade.

Suggestion - Add 50% qty on breakout & rest 50% wait for retest.

3/n
Read 9 tweets
Mar 13, 2022
An educational #Thread on Personal Finance Rules we all must know. Have sorted the rules & explained those which are less known to every1 & are very imp. as got many requests to share in details.

Rule of 70
4% Rule for Financial Freedom
100 minus ur age rule
50-30-20 Rule

1/n
1) "Rule of 70"

Divide 70 by current #inflation rate to know how fast the value of ur investment will get reduced to half its present value.

Inflation rate of 8% will reduce the value of ur money to 1/2 in 8.75 yrs.

1 should always consider while calculating net returns!

2/n
3) "4% Rule for Financial Freedom"

Corpus Required = 25 times of ur estimated Annual Expenses.

E.g- if ur annual expense after 45 years of age is 500,000 and u wish to take VRS then corpus with u required is 1.25 crore.

Put 50% of this in fixed income & 50% into equity.

Cond.
Read 6 tweets
Dec 19, 2021
An educational #Thread on 200 DEMA & its imp. in current scenario!

To cut things short 200 DEMA is considered as the decider between who is in dominating i.e bulls or bears. Its equally imp. for #investors & #Traders! Price sustaining below it is considered bad for bulls.

1/n
Though major indices like #nifty50 , banknifty, small & mid caps index are all trading above 200 DEMA but the major ones are not far from it. A major concern is the darlings of the market having high weightage have started trading below it.

Lets understand more with e.g's.

2/n
#HDFC Twins - Combined they have 15% weightage in Nifty & the picture doesn't look rosy.

For the 1st time in this entire bull market rally both have closed below 200 DEMA which was earlier a strong support. Though a LL again would be a confirmation of bears dominating both.

3/n
Read 8 tweets
Sep 6, 2021
Writing threads on #Fundamentals of a stock has been trending so why not thread on explaining #Technicals of a stock!

"Here is a thread analyzing Technical charts of #Cignitech" - Answer of #chart kya bolta hai.

It gave a rounding bottom + 7 yrs of consolidation breakout!

1/n Image
* Weekly Breakout of 7 years of consolidation was with huge volumes (highest since listing)which made it a high conviction trade as Price Action has to be backed up with volumes.

* Higher the consolidation before breakout higher conviction on the trade, faster the move after it. Image
* If you missed the initial breakout then the best time to buy it is on retest with lower volumes on lower time frame i.e daily or hourly!

* The stock made a perfect retest on daily with low vols. & made a reversal pin bar on Weekly at 21 WEMA on 23rd Aug (perfect reentry point) Image
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(