It took me 1000+ hours of practice to...
...learn how to NAVIGATE FALSE BREAKOUTS🎯
In this 🧵, I will be sharing 6 techniques...
...as to how I try to avoid getting CAUGHT & LOSING MONEY💰 trading breakouts
Ready to learn?🤓
Let’s go🧵…
1⃣ Cardinal rule: Stop chasing breakouts...
- If everyone is talking about it on social media and it has already broken out
- If a stock has moved up already for the last few days
- If a stock is up more than 10% already from breakout zone
- If your SL is deep
2⃣ Enter only on breakout & nowhere else if you're trading breakouts...
Buy only…
- above breakout zones (no entry in no-man land)
- above a key resistance zone after a stock consolidates
- 1-2% above resistance zone
- Identify entry points(set alerts on TV/set GTT in zerodha)
It took me 100+ hours of reading to understand candlesticks…
But, don't worry I’m going to help you understand CANDLESTICKS with a vegetable seller example in just 10 minutes…🤓
So take a paper, pen and read along…
Let’s go🧵...
1⃣So, what’s a candlestick?
- Candlestick charts are the most used charts
- For ex, Refer to the below Infosys candlestick chart
- Just by looking at this chart a Technical Analyst will be able to predict what can happen in the future
Sounds interesting? Ready to learn?
2⃣So, what does a candlestick represent?
- Let’s take the ex of a vegetable seller in the market
- The seller opens the shop in the morning & awaits his first customer & has a price in his mind that is based on costs & profit
Image source: Iconscout.com
…& I wouldn’t have learnt these with ‘Paper Trading’🎯
If you are a beginner, here is why you should stop paper trading...
Let’s go🧵…
1⃣My Paper trading experience
- Back in 2013-2015, during my MBA I used to participate in virtual trading competitions & I used to win them
- But when it was real money I kept losing - small profits, huge losses.
So, why did I still lose when I traded with real money?
2⃣But, why shouldn’t I paper trade?
- You can paper trade! That’s not the problem
- But, what’s your objective with paper trading? To test various strategies then good
- If you want to learn trading? Then it will NOT HELP you in any way.
It took me 10+ years & more than 1000+ hours of practice…
to master these 5 IMPORTANT RULES WHILE DRAWING TRENDLINES 🎯
These simple rules, if mastered, can help one spot HIGH PROBABILITY TRADES!
Ready to learn?🤓
Let’s go🧵…
1⃣ Trendlines are zones and not a single line!
- Due to volatility in price, many times prices tend to spike on both sides
- So, consider trendlines as zones from multiple swing highs(include wicks) to get the best fit trendline
- Your winning probability increases with zones
2⃣ Trendlines with more touchpoints
- Any trendline with 3 or more touchpoints is a very significant one
- The price points around significant trendlines are important & should be watched