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Trading Rules o Watch the market for the initial 1 and a half hours, i.e. till 11.30 a.m. No trade should be made in that time frame unless a low or a.

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Presentation on theme: "Trading Rules o Watch the market for the initial 1 and a half hours, i.e. till 11.30 a.m. No trade should be made in that time frame unless a low or a."— Presentation transcript:

1 Trading Rules o Watch the market for the initial 1 and a half hours, i.e. till 11.30 a.m. No trade should be made in that time frame unless a low or a high is tested at least twice during that time and a range is well established. o Always trade the range. i.e. if the stock reaches the resistance, then short, if it reaches the support, go long. The stops can be closer this way (Also it is better to initiate the trade in anticipation of the move or else you will not get a good deal). o The stops must be placed as per the points based on the ATR in the goals sheet. (If such stops just fall below the support, then trade only half the permitted lot with a wider stop) o Always wait for your target to be reached before you start liquidating. (strictly based on the points in goals sheet).

2 Trading Rules Watch out for traps. These are sure signs that the opposite move will continue for quite a while. The move might continue beyond two or three S/R levels. Watch out for traps. These are sure signs that the opposite move will continue for quite a while. The move might continue beyond two or three S/R levels. Use the maximum out of the trap moves and leverage yourself completely on such occasions, both in terms of points and lot size. Use the maximum out of the trap moves and leverage yourself completely on such occasions, both in terms of points and lot size. Always trade the basic chart patterns the normal way unless you have figured out a trap. Always trade the basic chart patterns the normal way unless you have figured out a trap. Do not buy/sell immediately after a breakout from a R/S. Remember you always trade the range. If the stock comes back to test the previous resistance and bounce back, that is the time to buy. (It then becomes a breakout trade. Note the difference between this and point 2. In point 2 you already have a resistance above. Here it is breaking out of the range. The resistance is not yet established above.) Do not buy/sell immediately after a breakout from a R/S. Remember you always trade the range. If the stock comes back to test the previous resistance and bounce back, that is the time to buy. (It then becomes a breakout trade. Note the difference between this and point 2. In point 2 you already have a resistance above. Here it is breaking out of the range. The resistance is not yet established above.)

3 Trading Rules o The range for the day is decided by the price levels that is tested at least twice either side. (For e.g., if the stock opens even and then falls drastically, then the open does not become part of your initial range, there will be other R levels established below the open level and the days low. The days low forms a strong support in case of a drastic fall initially at open itself). o Never, never, never exceed your money management risk permitted on any single day. (Exception is when you leverage completely on identification of a trap and fail. In that case the weekly MM should take care of such a loss) o Generally it is not worth pyramiding in day trading. (By the time you are in profit zone, and decide to pyramid, it could well be a reversal point for the day as the day's range most of the time will not be helpful for pyramiding. Use discretion for pyramiding). o You should work on a time stop also. If what you expect does not happen within a few (need to quantify) minutes at least on positions towards the end of the trading sessions, then it is better to exit. (Applicable for traps also)

4 Trading Rules If you identify a trap on a narrow range day, then there is a very high possibility of the range to be broken. If you identify a trap on a narrow range day, then there is a very high possibility of the range to be broken. First trap is the best trap to trade. Leverage completely on that. First trap is the best trap to trade. Leverage completely on that. Never try to participate in trap initiation moves. Stay out and enter once you have figured out the trap. Never try to participate in trap initiation moves. Stay out and enter once you have figured out the trap. If the same kind of trap occurs again, the move may not be significant after the second trap if it occurs very late. So take profits based on the ATR points of the immediate range established before. If the same kind of trap occurs again, the move may not be significant after the second trap if it occurs very late. So take profits based on the ATR points of the immediate range established before. If after any trap the price reaches the trap point and does not go in your favor, then exit completely out of all the positions. Enter again if you find another trap, but follow the same logic If after any trap the price reaches the trap point and does not go in your favor, then exit completely out of all the positions. Enter again if you find another trap, but follow the same logic Currently the max allowed lot that can be traded on any single day is 21. Always have an eye on the amount of risk and MM details Currently the max allowed lot that can be traded on any single day is 21. Always have an eye on the amount of risk and MM details

5 Trading Rules From 3.20-3.25 pm focus completely on leaving or having new open positions to be squared off the next day morning on session open. From 3.20-3.25 pm focus completely on leaving or having new open positions to be squared off the next day morning on session open. If there is a trap around 2.30 and it has not moved at least 50 points from the trap point, then it is highly likely that the difference will be touched the next day morning. If there is a trap around 2.30 and it has not moved at least 50 points from the trap point, then it is highly likely that the difference will be touched the next day morning. Never have more than 3 open positions at the end of the day. Never have more than 3 open positions at the end of the day. Have open positions only if you are doubly sure of the trap, i.e only after a move exists in favor of the trap and does not show any weakness towards the end of the session. Have open positions only if you are doubly sure of the trap, i.e only after a move exists in favor of the trap and does not show any weakness towards the end of the session.

6 Trade Sequence SequenceNum lotsRevised Trade 1 – WU10 Trade 2 – WU10 Trade 3 – SLT50 Trade 4 – FLT55 Trade 4b – SLT50 Trade 5 – QLEODT20 Trade 6 – QLEODT20 Total215 WU – Warm-up SLT - Semi-Leveraged Trap FLT - Full-Leveraged Trap (an SLT should already be in place for this) QLEODT - Quarter- Leveraged End of the day trap/trend reversals

7 Trading Rules This is your passion, life and profession. You cannot give anything less than the very best of you. This is your passion, life and profession. You cannot give anything less than the very best of you.

8 Vision

9 Mission

10 Strategy

11 Goal


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