Positional Trading Strategy.
This below simple positional trading strategies is for software professional, Govt. employee, house wife or working professional, those who don’t find time for day trading and do short term positional trading. In this trick even a less educated person can trade successfully.
Generally people randomly select stocks listening from friends or from other source and buy these stocks from online trading platforms. They don’t check the technical position of that particular stock, weather it is in lower lever or higher level and they get trapped. So here in above chart you can know the position of any stock before buying.
Enter any stock name in the box where “Nifty” is written in the chart and watch the last section of above chart which is called “Stochastic”. You can find 2 levels, one is 20 and another is 80 levels. When stochastic line is above 80 then stock is in over bought zone and any time selling or profit booking may take place. So if stochastic line is above 80, then please don’t buy this stock.
When stochastic line is below 20 then this stock is in over sold zone and the stock is in lower level and this is your buying point. Buy that stock and wait stochastic to cross 80 levels to book profit. Please check past performance of any stock in above chart and do paper trade. This process really works and in clear trend indication you can earn 5-15 % in one month depending upon the stock movement and in case of bull or bear market using above technical chart you can at least know when to enter and when to exit so that you can minimize loss and avoid trap in stock market trading on your own.
Trade in Nifty fifty stocks only or that stock which comes under derivative segment and please don’t trade in penny stocks because penny stock doesn’t follow technical trend. So it is better to get 1% profit in good stocks than getting loss and trapped in penny stock for months.
Download stocks (Span margin) which are traded in derivative segment in below link or you can find over bought and over sold stocks in "STOCK TREND" page. Analyze position in EOD chart to study.
Check stochastic level of “Nifty” and stocks in above chart to find stocks in buying zone. If Nifty is in over sold zone (Lower level) and a stock from above you are buying is in lower level then this is the safest position because if index move up then stock also move up.
How to know when to enter and exit Mutual fund (Simple trick)
You know “Nifty” is the Indian stock market index and when Nifty moves up then stocks also moves up and in case of down market stock also moves down. Your investment funds in mutual fund are also invested in stocks. So when Nifty moves up you get good return in best mutual funds and in case of downtrend you get negative return on your investment funds.
So if you can find low level of nifty and enter in that level then you can maximize your profit on your investment funds. Let’s try to know the lower level of Nifty in above Technical chart. In above chart change the Time interval to “W” which is weekly time interval. By default it is “D” means Daily time interval, so change it to weekly (W) to watch for 6-10 month horizon. Now watch the Stochastic (Stoch)-3rd lower section of the technical chart. When Stochastic is below 20 level (your Buy point), buy equity linked open ended mutual fund and hold till Stochastic line reaches 90(Sell point). So knowing lower level and higher level you can maximize profit and protect your fund.
Now find best mutual funds, open ended or closed ended mutual funds for your investment funds and compare mutual fund performance with stochastic line to test.
In this process you can get up to 40% return in 6-9 months in growth stock mutual funds depending upon the market movement. Compare your open ended investment, index mutual funds or growth stock mutual funds return growth with Stochastic line movement to test your mutual fund return.
How to study Technical chart?
In the chart 1st section is called candlestick pattern. In this part price moves in a closed boundary that is called lower and upper Bollinger band. Watch when price touches any of the boundary trend reversal occurs. So Bollinger boundary gives us limit of price movement and trend reversal point. Use LIVE CHART section to study technical chart and uses of MACD, Moving averages, STOCHASTIC and BOLLINGER BAND.
Moving averages like short term and long term moving averages are used in technical charts to determine trend. Two lines crossing each other inside Bollinger bands are called moving average. When short term moving average line cross long term moving averages upward, trend becomes bullish and incase of downward cross trend becomes bearish. So this gives trend.
MACD-moving average convergence divergence. This is the crossover of short and long term moving averages. Watch and compare MACD with candle stick direction in 1st section, when cross over takes place in upward direction in MACD, stock moves upward and in reverse stock moves downward. Also watch the buy volume and sell volume bar in MACD increases and decreases with stock movement in bullish and bearish trend.
Last section is called stochastic. It shows the overbought and over sold zone. When stochastic is below 30, it is called over sold zone and any time buyer can take control and stock may move upward. When stochastic is above 70 levels then this is called over bought zone and any time selling pressure or profit booking may come.
Study these 3 sections and compare with each other to get clear trend of stock. Paper or do virtual trade to practice .Learn candlestick pattern and use with technical analysis to get better result.