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Pullback Trading - The reality

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

How do I go about with pullback trading ?

Detailed thread of the whole process

Step 1: Check the Higher TF which is monthly. Purpose behind this step is to make sure that the scrip is highly bullish in this TF.

Consider #aptecht

1/7 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

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What exactly is Trading Psychology?

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"

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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

Mechanism behind stock price movement

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.

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https://twitter.com/sarosijghosh/status/1505267237317328897

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.

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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??

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https://twitter.com/ProdigalTrader/status/1503186937477169152

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

How to desogn a trading system???

Ur trading system should contain 2 parts
1. Define context
2. Entry exit set up and rules

Let's see them in detail

1/16 When u define the context u are essentially removing all the trades which are against the trend.
Suppose u objectively found trend is Bullish with any tools of ur choice. Then all the shorting signals ur entry exit method generates can be avoided

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How to recognise the strong sector?

Widely practised method is that to check the relative strength against the market. Here is the performance of each sector since nifty started falling. We can fairly accurately conclude that, we must look at PSUBANKS, METALS, AUTO

1/11 But how about the sectors such as healthcare, sugar, chemicals etc. These have no respective sector charts. How do u assess the strength in these.

Answer is to check the relative performance. Here is an example chart of health care stocks in NSE500 universe.

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A wide miscoception is that DISCRETIONAY TRADING is "Buy anything that moves" just like an army command "Shoot anything that moves"

But good disc. traders have objective trading rules for entry/exit/PS/RM. They apply discretion only on whether to take trade or not

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🔁🔁🔁 Such discretion can come from anything. There are traders who weighs market breadth along with own trading signals. If AD ratio is Positive, going long, especially in LTF is a suicidal attempt.

2/7

Do u make/have "view" on all stocks u see???
Read this 👇👇

When I was new into the market, i was fortunate to be guided by good senior traders. They used to answer my doubts, share their views with me and tell me how did they come to certain trend via a after analysis.

1/11 This reduced my learning curve a big way. I did not had to wander around aimlessly for too much of my initial times.

But this interaction had a worse effect too. Majority of those who were around me had a view on all the stocks.

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Ever Bullish Trend & EverBullish Stocks - What are they and How to identify them?
(advt.)💐💐💐

There are some stocks which are in "Ever Bullish Trend" irrespective of any market sentiments, be it negative or positive.

1/4 For equity traders who are looking to gain some 30-50% of move in medium term such as 4-12 months, these stocks are the best to invest their cash

But
What are EverBullish stocks?
How to identify them?
Are there any objective characteristics in them?

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Many of u know candlestick patterns, RSI and other indicators. moving averages, Bollinger Bands etc.
Many of u know charting and exact trend analysis

But so many of u struggle in market to be profitable consistently.
Is this lack of knowledge? No definitely not.

1/5 But then how would u connect a good analysis with profitable trading ???

If u can find answer to this question,
then u can start ur journey as a profitable trader and take it up as a serious career

2/5

I will describe a small personal story with analysis and trading on IRCTC

Here is the IRCTC chart with few numbers are marked in it. I will walk u through the analytical and psychological aspects behind it, point by point.

1/13 1

Strong uptrend
Pattern is under formation
Let me wait for the completion of the pattern
i will go long here

2/13

Thread of Short term bullih scrips which are making smooth roundish consolidation with bullish bias

#asahiindia #bse

Successful bullish reversal after Retesting the recent breakout is the least risky method to go long in strong trending scrips.

Indorama
Welspunind
Mhril
Chennpetro

1/5 Real challenge is finding the right scrips. Whiel making breakouts, stocks will be there in all sorts of news and websites while those on retest where its available far cheaper, will go unnoticed

Here is a list & charts

Kalpatpowr
Bharatgear
Tatamtrdvr
Precam

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Stocks which gave successful retest today after a strong breakout.

IGPL
asahising
mothersumi
nocil shavamauto
sequent
ricoauto
rohltd

Live Case Studies discussed in ConfluencE Channel in last three weeks alone and their Follow ups

Reliance
Bandhabank
Infy
Titan

1/5 LTI
Hcltech
DLF
Godrejprop

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Excellent retesting candidates after strong breakouts
Filtered based on Price, volume and momentum

Retests allows a retail trader to buy the stock cheapest after the trend is set.
one of the most powerful set up in classical technical analysis

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In my early trading days, i used to feel tremendous pressure when i see big MTM screenshots from others. And also used to feel happiness if they posts their negative MTM screens.
It took me many months to concentrate on my trading process and avoid all the noises around

1/7 The turning poont in adressing the issue was when i identified this as a bad habit. I knew i had to overcome this if i have to progress as a trader. I disnt know where to start or what to do. But one thing i did right was i understood i lacked somewhere in my own trading.

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Suppose u r in a long trade in 5min TF,
How would u assess trend is still intact
and
u can scale into the trade to maximize the profitability ?

1.
HH HL formation and pin bar with good vol at vwap or just abv previous low. ADX greater than 25

1/6 2.
Low volumes on counter trend move and price not closing below Vwap

3.
HH and HL formation on 5 min time frame. Volumes expanding when making HH and low volumes when in LL. Price above vwap

4.
SuperTrend 10,2, for scale in at ST retracement

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Why to avoid looking for trade everyday?
Why should u avoid following those who posts plenty of delivery trade set ups daily?

If u are an equity trader who looks to hold the stock for a short time such as fee weeks to few months,
u dont need to search for stocks everyday

1/5 All u need is to filter the stocks on weekends and prepare levels
When it comes to ur level on any following day, u make an entry
Afterall how many stocks u r looking to hold in ur account?
8-12 mostly
Not more

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