Stock Trading -(Day Trading)-16

                                                      Xi- Selection of Stock.

The success in day trading lies not on how you trade but how you select the right stocks. There are certain criteria for stock selection. 99% of success lies in it & the moment you develop the sure strategy of finding it then trading in it require just 1% of effort.  Further there are certain conditions for tracking the progress of the selected stock in its intraday performance. There are definite parameters for tracking the exact entry time, perfect exit time to yield maximum profit amongst others. Your mistake might be you are doing reverse of above.

You learn FOLLOWING.

1. OPEN INTEREST & ITS RELATION BETWEEN % CHANGE IN PRICE. Open Interest (OI) in the stock market refers to the total number of outstanding contracts, such as futures or options, that have not been settled or closed out. It essentially measures the amount of active interest in a particular security. The relationship between OI and price change can reveal valuable insights about market sentiment and potential future price movements. 

Open Interest and Price Changes:

i. Rising Price, Rising Open Interest: This suggests a strong bullish trend, as more traders are entering the market, increasing the number of outstanding contracts, and driving prices higher.

ii. Rising Price, Falling Open Interest: This might indicate a weakening bullish trend, as some traders are closing out their positions, potentially leading to a pullback in price.

iii. Falling Price, Rising Open Interest: This can indicate a bearish trend, as more traders are entering the market to take short positions, pushing prices down despite an increase in outstanding contracts. Iv. Falling Price, Falling Open Interest: This can be a bullish signal, as it suggests that the bearish sentiment is waning, and more short positions are being closed out, potentially paving the way for a price recovery. In essence, analysing changes in open interest alongside price movements can provide valuable insights into the strength and direction of market trends.  

 

2.TRY TO FIND THE LIST OF WEEKLY LOSERS & WEEKLY GAINERS IN NSE FUTURES.

3.TRY TO DEVELOP A SIMPLE MATHEMATICAL FORMULA THAT INVOLVES BOTH

ABOVE CITED CONDITIONS.

This completes the 99% task of winning the day trading.

For the balance 1% success . DEVEOP

1. A SKILL IN KNOWING ABOUT TECHNICAL INDICATORS. (RSI, MACD, BOLLINGER, MOV AVERAGES, SUPER TREND, TRIX, ROC, CCI,)

2.THE SKILL OF ALTERING THE DEFAULT SETTINGS OF THESE INDICATORS

3. ART OF MIXING THESE VARIOUS INDICATORS (Superimposing them)

4. THE SKILL OF INTERPRETATION OF THESE SUPER IMPOSED INDICATORS.

5. AND DO PRACTICE OF PAPER TRADING OF YOUR FINAL STRATEGY ON ONE STOCK DAILY & MAINTAIN THIS LOG FOR MINIMUM OF 5 TO 6 MONTHS.

 

This requires a slogging for days to weeks to even year.  Be adamant in nature against many failures you will see at initial stages. NEVER THINK OF GIVING IT UP. Maintain the daily notes of each observation, reasons of failures & corrective action to be taken or taken. Daily record the video of your strategy from its infant stage to final stage.

Be ready to slog for 12 to 15 hours a day.