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Daytrading

VWAP: The Ultimate Day Trading ToolVWAP stands for Volume Weighted Average Price. In simple terms it is the average price weighted by volume. Don't worry I ll explain. The Calculations: Firstly the average of the high, low, and close: (H+L+C)/3, is calculated (technically known as the typical price). This typical price is multiplied by the candle's volume (depending on time frame used). The cumulative total is calculated with each successive candle. Cumulative volume is also calculated along with this. Then divide the cumulative total of price-volume by the cumulative total of volume. And we get VWAP. Fresh calculation start every day at 9:15am and end at 3:15pm. Sounds difficult?? Simply apply the tool on a chart and you are ready to go. Applications: Vwap is used by institutional players having huge orders. VWAP helps these institutions determine the liquid price points, near the vwap, for a stock over a very short time period. VWAP serves as a reference point for prices for one day. As such, it is best suited for intraday analysis. For me personally, it works best on any where between 1 minute to 5 minutes timeframes. I suggest you to read the full post before reaching at conclusions :) Two Strategies: Hit and Run: We buy as the price pulls back to the vwap. We wait for a signal candle reflecting buying interest and pull the trigger. Here we place the stop below the vwap or the previous swing low, whichever is lower. The advantage is that on this lower timeframe stop will be small. For exits use targeted approach. One can also trail. The Value Trade: Buying below the vwap is generally considered as a good buy. Two variations-- 1) As the price breaches vwap wait for price to also break an important swing low for the day with immediate reversal supported by volume. Buy above this high volume candle with a stop below it. 2) Price breaches vwap and makes a low X. Wait for the price to pullback to vwap (Y) and then head lower again to X or make a higher low near X. Here Y would be the entry point. with stop at X. Both these strategies can also be used for shorting a stock. You just have to read it upside down. # Also keep in mind that day trading is not as easy as explained above. 1) We also analyse daily, hourly and lower time frames before pinpointing entry on 1 minute chart. 2) Trades taken in the direction of trend yield handsome returns. 3) We also have to take into consideration the overall indices movement. 4) Notice if the stock has been out-performing the indices. # In trading world, nothing works 100%. So active trade management and efficient money management is essential to avoid unbearable losses. As I always say, "Greed and Fear are traders' enemies". We can't eliminate them but they can be managed patiently. Before applying this strategy you should first test it for few days to learn trade execution. I suggest you to use them on top gainers and losers. One has to be fast and fully concentrated in the morning. But if you missed the morning move, that does not mean the end of world. Wait for the next opportunity and grab it. Just practice, practice and practice more. It ll make you perfect. Hope this post will enhance knowledge of some traders. Do hit like button for better stuff in future. Regards
NSE:YESBANKEducation
by Bravetotrade
39
H&S Breakdown With Big Candle. Edelweiss Fin For TGT 227-220A h&s breakdown observed yesterday with big red candle in edelweiss fin stock where neckline was around 246 levels....with a head size of around 30-35 points which indicate downside possible target upto 227--220. one can look forward to this stock for selling opportunity near resistance levels. Disclaimer :- this study is posted for education purpose only...not for buy/sell recommendation. do use your wisdom before making any trading judgment.
NSE:EDELWEISSEducation
by marketprophecy
Day Trading with a Simple Strategy: Is it Easy ? :DNo absolutely not, its not easy. Perhaps the most difficult type of trading is the intraday trading. Reason being we have just 6 hours to accommodate our trades, and most of the time stocks dance here and there before giving that 15 min. to 30 min. window in which they give trending moves. I always get ready to lose when I day trade, but I always know how much risk to take. Today I had a small trade in Mindtree which I thought is worth sharing on TV. Mindtree has been in a downtrend on the daily and hourly charts. I watched it consolidating yesterday. Today it started the day with a gap outside yesterday's range and quickly retraced back to the range. It was first sign of weakness. Second Candle A had a nice bounce from the support but that was not enough to initiate long. When the stock is in a long term downtrend , I can't buy just on the basis of a bullish candle on a lower time frame chart. Candle B bounced from 449.50. It was huge, positive and above average volume response. OK.. we can take some risk if this trend continues but no continuation seen. I placed a sell stop order just below 449.50 along with those fellow traders who bought in candle B and placed their stops below the low of this candle. In the very next candle sell order was triggered. I placed a stop loss order just above the high of candle B. The very next candle C was scary for sellers like me, a long wicked hammer with nice volume. Although I did not had a chance to sell at the low of this hammer, I decided to trail -- remember an old saying, " Let you profits run". I trailed every 15 min. candle and got stopped quite near the low of the hammer. Although the trade looks small it was a little short of 1% the stock's value. This trades quickly turned into favor but this does not happens always. So its good to follow the trend; look for patterns and ranges and play as per convenience. Hit like if this information was interesting. Trade safe, stay healthy. Regards Bravetotrade
MEducation
by Bravetotrade
8
My Intraday StrategyI have a very simple Intraday strategy which works really good. I would like to know your comments, advice or any faults you think my system might have, do paper trade this before actual trading. After market hours I scan stocks in the 15 min time frame to find out which stocks have broken above or below a range of say 20 bars behind. Meaning from last 300 mins range of the stock and a break above or below that at day end. After seeing the breakout I generally see the volume with which the stock has broken the range either above or below and the closing price at end of the day. If the volume is above average till the end that gives me an idea that the probability of the stock moving in the direction of the breakout or breakdown is more at the next day opening. RSI or the relative strength index plays a crucial role too. In case of a breakout the RSI should be nearing 70 and ready to cross it from below ie sloping upwards. In case of a breakdown RSi should be sloping downwards and ready to go below 40-38-35 levels from above. When these three factors come into play, I decide the price at which i will keep a buying stop order in case of a breakout and selling stop order incase of a breakdown and place the order after premarket close ie at 9.07am. I immediately place my stops as soon the market takes my orders. I will wait for 45mins to an hour to see if my trade entered is moving or then i exit at CMP. Youll can see from the ideas that i have published that mostly i do get good quick trades. except todays HDFC bANK which isnt going anywhere. Please let me know your feedback! Thanks
NSE:TATASTEEL
by crinvestments
40