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2652 theory of trading

The 2652 theory of trading works on 15 minutes time frame for candle. 9 to 3.15 there are 26 candles. We divide it in two parts. Part I - is from 9 to 11.30 candles of 11 candles and. Part 2 - is from 11.45 to 3.15 candles of 15 candles.
  1. What we must do in first part 1: Just a watch on candle 1 to 11. Find the candle which is high and which is low till 11.30. Suppose candle no 3 that is from 9.30 to 9.45 is the low then name it as l3 and suppose the high is no 9 at 11 to 11.15 then name it as h9. So part 1 end at candle no 11 at 11.30 to 11.45.
  2. What to do in part 2: Part 2 starts with candle no 11.45 to 12 and end with 3.15 to 3.30 with 15 candles. Now in part 1 first low was attained at l3 and then high was attained h9. Now in second part u must keep an eye on low of candle 3 (because l3 is first) that is from 12.15 to 12.30. If low of the 3rd candle is broken or touched the low of 3rd candle then u must be ready for 9th candle in second part for trade. When 9th candle in second part that is candle from 1.45 to 2.00 ends the put a sell order at the high of 9th candle in second part. Put 0.9 percent stop loss and profit of 0.8 percent (or as per close at 3.15 to 3.20) above and below the selling price respectively. If the low in third candle was not broken in 3rd candle there would have been no trade in 9th candle

Observations and conclusions

If I take in around 100 stocks then out of hundred only three to four stocks are that will not follow the 2652 theory of trading.

Around 95 stocks when hit the stop loss sell or stop loss buy order go down or up by 0.5 percent respectively. The five stocks which have behaved opposite to the theory will definately will follow this theory the next day and also for more consecutive days .This factor u must use to minimize ur losses u made on that particular day when the stock behaved the opposite way. This ia explained in Cash management and stop losses.

Around 70 to 80 stocks go up or down 0.7 to 1.2 percent after hitting the stop loss buy or stop loss sell orders. (Here there is a risk that the price may not go in a single stroke down or up but It will go.)

You must trade in those stocks which have a turnover of around 4 to 5 crores or above daily in trading and having short selling. You must be expert in execution of orders and accurate in ur calculations. You should not panic at any time

Cash management and stop loss

How I trade and put my stop losses I take in 20 stocks for trading . I sell or buy one lakh worth of shares of a particular comp. (Initial amount which I double as per the requirement)

Now suppose for a stock say ONGC I have my orders as below
Sell below price A and buy at B
Buy above price C and sell at D

F1 = 0.4333 * PDR
F2 = 0.7666 * PDR
F3 = 1.3333 * PDR

Opening Range = High – Low (at 9.15 AM)

If F1 > Opening Range
Factor = F1
Else If F2 > Opening Range
Factor = F2
Else If F3 > Opening Range
Factor = F3

Buy Stop Order for Long = Intraday Low + Factor

Target for Long = Buy Price * 1.005 (0.5 % gain)

Stop for Long = Buy Price * 0.99 (1.0 % Loss)

Sell Stop Order for Short = Intraday High - Factor

Target for Short = Sell Price * 0.005 (0.5 % gain)

Stop for Long = Sell Price * 1.005 (1.0 % Loss)

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