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AK - Session 3 - Stock Intraday

This document provides guidance on intraday stock trading. It discusses selecting stocks based on factors like volume, price movement, and open interest. Two sample trading setups are described: 1) The LPR (Level, Pullback, Reversal) setup looks for stocks breaking above or below key resistance/support levels like R3 or S3 on the fibonacci retracement with high volume before 11am for the highest probability of success. Strict stop losses and trailing stops are recommended. 2) Monitoring top gainers and losers from the start of the day can identify momentum stocks that may continue moving in the same direction. Spikes in open interest also indicate institutional activity. Combining these factors with pre-selected

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241 views3 pages

AK - Session 3 - Stock Intraday

This document provides guidance on intraday stock trading. It discusses selecting stocks based on factors like volume, price movement, and open interest. Two sample trading setups are described: 1) The LPR (Level, Pullback, Reversal) setup looks for stocks breaking above or below key resistance/support levels like R3 or S3 on the fibonacci retracement with high volume before 11am for the highest probability of success. Strict stop losses and trailing stops are recommended. 2) Monitoring top gainers and losers from the start of the day can identify momentum stocks that may continue moving in the same direction. Spikes in open interest also indicate institutional activity. Combining these factors with pre-selected

Uploaded by

Agile Investments
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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3 – Stock Intraday

18 October 2020 14:56

SESSION-3 (18-Oct-2020) - STOCK INTRADAY TRADING


Rules
• No Bias – Anything can happen – surrender to market God
• Do your HW & shortlist stocks for Long or Short – but even they can fail
• 1st fundamental rule:
○ Put SL – strict - don’t change/remove/modify
○ Modify SL only while trailing profitable position
• Try to reduce no of trades to be more profitable

10% - Intraday trading Strategy is just 10% of the game


40% - Correct Stock selection
50% - Risk Mgmt, psychological, position sizing

2 types of strategy /setups ready


• Pre-selected list - may not come up during live trading filter
• Live market filter
• Stock if in both list + RR good + mkt trending – go heavy
• Trending/sideways/volatile - diff strategy

HOW TO CREATE WATCHLIST FOR INTRADAY


Eliminate Stocks:
• Not listed in FNO (135 in list- Institution interest)
• Below Rs.70-80 ( & above Rs.5000)
○ Lot size ridiculously large
○ false b/o, b/d, gaps, not able to do TA
○ Can be easily manipulated
○ Not good movement unless some news
• With low volume (bottom 20 on Fatafat list for that day)
• With Big Spreads – diff betn price of Bid & Offer
○ 2nd Task:
▪ For next 1 week
▪ Pick 5 big(above Rs.2000)/Small stocks (below Rs.400)
▪ Check diff in spreads at least 3 times in a day
○ Intraday trading - 80% of time pick stock below Rs.500
○ If spread if Rs.4-5 – avoid
○ Spread high then RR bad & SL bigger, In that case for good opportunity
▪ I) Enter in cash with reduced position or
▪ II) If Rs.6-4000 max loss per lot per trade decided then place SL at around 3500 to
allow spread/slippage of 4-5 points (to get extra buffer) while trading multiple lots
• In BAN period -
○ Check Zerodha Margin calc website
○ Don’t trade those stock in cash too
○ Also stock with high MWPL
○ Live market no ban but circuit
• Mega volatile –
○ High beta stocks
○ Eg. Ibull/ Zee/Justdial/Indigo/Infratel/indusind/mfsl
• Highly recommended on social media by everyone – eg. ITC/SBI
• With expected quarters – big players betting
• Directly influenced by BIG EVENTS on event days
• Not responding to crucial moving averages?
• With ongoing cases/corporate governance issues
○ Zee/Auro/ibul/yes/future/vedanta/PNB/
• So study balance 85-90 stocks everyday
HOW TO START YOUR DAY
• Watch the global & domestic cues
○ Bloomberg, ET & MMB - headlines
○ US & DAX
• Check high prob pick-ups from previous days watchlist
• Read at least 2 pages of something motivational or positive (not related to market)
• Eat something healthy and do a lit bit of walking
• Don’t watch TV/Telegram commentary

STOCK SELECTION (LIVE MARKET):

3) Volume
• Fatafat Stock screener open first in morning
• Volume % - sort from Z to A (compared to last 3 days average)
• Monitor top 10-15 stocks at the start of day till midday
• 9:15/17 to 12:15 – when you are going to take trade
• Increase above 40% starts since morning & gradually increasing
• Shows Institutional interest - building position gradually
• 3-4 stocks continuously will be in the top 15 list
• If more stocks showing above 40% conc on top 15 stocks only
• S2 & S3 in Fatafat are equivalent Fib level S3 & R3
• If any of stock in top 10 stock also shown in S2/R2 - check that stock in chart with setup

1) Top 10 gainer + losers


• NSE website
• After open - since @ 9:15
• Check for Nifty 50 & FNO securities
• Possibility that 2 out of 10 will be biggest gainer or loser of the day
• 1st task – for 1 week:
○ Form 9:15 to 9:20 see which are top 10 gainers & losers
○ Then at 3:30 recheck which are common from the morning list
• Means right form the 1st candle (gapped or strong momentum) big players are interested in the
momentum of that stock
• Any Stock that has gone down by 2-3% on 1st tick has more probability of going further down
• This doesn't tell amount of volume

2) OI Spurts
• NSE website
• keep it open if you are trading actively
• Volume of contract futures
• See for % Change at 9:15 to 9:30
• Look for stocks going up form 4-5% to more than 7-8% in
• first 10-15 mins then gradually increasing – Stock should go into live watchlist
• Specifically if it's in top 10 gainer/loser
• Operators if have to move a particular stock have to move both cash & futures

Confluence of at least 2 out of 3 with your HW list – more probability/confidence to trade

SETUP 1 – LPR - THE POWER OF 3


RULES:
• Time frame – 5mins
• Levels are only R3-S3 (fib pivots)
• Imp of timing - Levels should arrive:
○ Before 9:30 – Very risky yet rewarding
○ Before 9:50 – Highest probability
○ Before 11:00 – Little Risky – reduce size
○ After 11:30 – Risky – reduce size by 1/5
• Entry:
○ For Buy - 90% of GREEN candle should breach level 3 and close with good volume
○ Preference goes to VOLUME shocker on each candles – fatafat list
○ Preference goes to stocks moving/breaking out of consolidation range after LONG period of
time (eg.4-5 days)
○ Preference goes to WADA PAV (Big Price action + volume) #Trick 5?
○ Check for RR – enter only if its good
○ Wait for candle to close before initiating trade
• Stop loss:
○ Below ATR trailing / Level 3 / Entry candle low – whichever is less
○ After entering wait for 10-15 mins – (don’t look at screen – price will do timepass)
○ Exit if a confusing/resisting candle appears
○ If in profit - exit 80% remaining continue with ATR trailing
• ATR trailing SL -
○ 25/2 or (22/2 while more volatility)
○ Change Points into squarewave
○ Trailing after every 3 candles formation/15mins

• Breakdown & closes below Level 3 + ATR SL can be contra trade?


• A support with 3 candles/15 min candle on Zone3 becomes a contra trade?
•
• If psychological level breaks BONANZA
• If analyst says reverse BONANZA
• If you understand the BEHAVIIOUR of your favorite stock BONANZA
• WAIT if candle has been TOOO huge near ZONE
• When there is huge candle breakout – wait for the retest of the level
• If breakout candle very big – avoid – not good RR
• Works on Index too!

3rd Task:
• Find your setup
• Test it for 3 months

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