Tata Chemicals rangebound
Updated
Tata chemicals has formed a beautiful symmetrical triangle pattern and requires traders to trade the range, buying at the lower trend line and selling at the higher. It has also formed a golden cross- When 50EMA passes 200EMA from below showing bullish nature.
A break of the lower trend line will see an end to the trade, making it a risky one.. Hence we should position size in a smart way.
What is position sizing?
It is when you first add half your position to check If the market is saying you are right or wrong, if the market moves in your direction, you will add your second half and tighten your stop loss. This way you add two positions but one only when the market shows you that you are correct.
Example: Suppose your risk is 100 per trade, You first buy enough Qt to risk only 50 ( Typically with a larger stop) and if the market forms a green candle or another bullish sign, you add another Qt to risk 50 more ( Total risk 100) and your second stop loss becomes tighter ( most probably at the breakeven of the first position) this way you minimise your loss but ur reward is the same and even more. If your first stop gets hit, you accept your mistake and move on.
I would suggest to risk only half of what you normally risk on this trade since the risk to reward is very favourable with a small stop loss.
Example- If you normally risk 1000 per trade, this time risk only 500 since the potential is the same reward with lesser risk making it a A+ set up.
If a green candle or a bullish candle is formed at the trend line, we can add to more positions.
Keep It Simple
A break of the lower trend line will see an end to the trade, making it a risky one.. Hence we should position size in a smart way.
What is position sizing?
It is when you first add half your position to check If the market is saying you are right or wrong, if the market moves in your direction, you will add your second half and tighten your stop loss. This way you add two positions but one only when the market shows you that you are correct.
Example: Suppose your risk is 100 per trade, You first buy enough Qt to risk only 50 ( Typically with a larger stop) and if the market forms a green candle or another bullish sign, you add another Qt to risk 50 more ( Total risk 100) and your second stop loss becomes tighter ( most probably at the breakeven of the first position) this way you minimise your loss but ur reward is the same and even more. If your first stop gets hit, you accept your mistake and move on.
I would suggest to risk only half of what you normally risk on this trade since the risk to reward is very favourable with a small stop loss.
Example- If you normally risk 1000 per trade, this time risk only 500 since the potential is the same reward with lesser risk making it a A+ set up.
If a green candle or a bullish candle is formed at the trend line, we can add to more positions.
Keep It Simple
Note
Trade is going well.. stay strongNote
Very good candle for us.. stay strong and hold til targetNote
target achieved and even more.. good trade
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