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High low trading

It's simple, if not today, definitely tomorrow. 2652 theory or high low trading works on assumption that no chart of a stock is symmetrical in both the parts. This method works well for nifty stocks but selection of stocks is the key.

There is one more tweak to this method which makes its more efficient but without the tweak also it works fine. I can't post the tweak here (it's not in our scope) but can definitely help in choosing of slow stocks. You can go in for slow stocks like Infosys, Grasim, BHEL, Sun Pharma, ITC, Hindliver, TCS. Avoid very stocks like Reliance Capital, Relinfra , Educomp, Idea, Unitech.

One more thing is that u must take those stocks that had moved too much in early hours of trade or part 1. This list u can get from hourly gainers and losers. A wise trader will get N number of stocks which qualify for the above method. In breakout you are looking for NR4 and NR7 here you can look for just opposite. If you have AmiBroker then do back test for some slow and some volatile stocks. This methods is the best because you are trading when the markets has done a lot in a day.

Now here arises three different conditions:

  1. When the sell below A order is hit , I put a stop loss of 1 percent above the hit price A for stop loss buy. If my buy at B is hit without hitting the stop loss then I will make a profit of 0.5 percent .this is the best fitted condition for the above theory. The same condition is applicable to buy above price C and sell at price D
  2. When the sell below A order is hit , I put a stop loss of 1 percent above the hit price A for a stop loss buy.If instead of going at price B the price hits the stop loss then I make a loss of 1 percent(rs 1000 for one lakh wirth of shares) .But at this point I again put order sell below A and modify buy at a price 0.8 percent down of price A ( not at price B which is 0.5 percent down of price A ).Now here the value of stocks ur selling is important .If u have sold shares of one lakh value and booked a loss of one percent then u must sell at the same price two lakh worth of shares ( that is double the value ) but modify buy order at 0.8 percent down from the sell price instead of 0.5 percent when buy order is hit u will profit 1600 rs as compared to a loss of 1000 rs (after ur brokerage charges u still are in profit).This is one of the rare cases in the above theory but u must be prepared to it. The same condition is applicable to buy above price C and sell at price D.
  3. when the sell below price A is hit.I put a stop loss 1 percent above the hit price A for a stop loss buy.If instead of going down to price B , stop loss is triggered then I make a loss of one percent . Then I be ready placing another stop loss sell order (but the value of the shares is double)at price A ,and modify my buy order from 0.5 percent down from price to 0.8 percent. But if suppose the price never comes to hit stop loss buy , then for the day I will make a loss of one percent on one lakh worth of shares.
Now to minimize my losses on that day for a particular stock I will double my value of shares to sell or buy the next day (reason if the theory fails for one day then for next 100 percent it will struck and will do for more consecutive days for that particular stock).Here I make up for the loss made by me on the first day on that stock.for e.g on 23 / 2 I make a loss of one thousand rs (one percent of one lakh) short selling a particular stock .The next day I will sell or buy (as per the above conditions) double the value on the previous day for a PROFIT MARGIN of 0.5 percent only . Here for that day my earning is rs 1000 on the two lakh worth of shares.which will minimize my loss by done by me on the previous day.

I take in 20 stocks of which I get around 12 stocks with hit the price .If number three condition arises for any of these 12 stocks then I have a loss of rs 1000 for that stock but I earn rs 11 * 500 for other stocks that is 5500.
So me net profit will be 5500 - 1000 = 4500
It may be that in those some(one or two) of 11 stocks ,number two condition arise this may reduce my profit.
For the stock whih made a net loss ,the next day plan will make it less by half adding to the next day profit.
Sometime I start a trade by selling or buying shares worth 50,000 and then double my amount to one lakh as per condition number 2 or 3.
This high low trading is a theory just to earn a leaving, a sure method of trading market.

Stock market for beginners

Elliott wave

  1. 2652
    The best way to day-trade is the 2652 theory of day trading.
    1. 2652 theory of trading
    2. High low trading
  2. Buy the company
    Stock market can be irrational in short term. Good companies can make temporary losses. But an investor should not get diverted by this.
  3. Contrarian investing
  4. Outperform the market
  5. Day trading guide
  6. Head and shoulders pattern
  7. News trade
  8. Rebate trade
    This is an equity trading style that uses ECN rebates as primary source of profit and revenue.
  9. Scalping trade
  10. Trade systems
  1. Elliott Wave principle
  2. Characteristics of Elliott Wave
    1. Characteristics of Impulse Waves
    2. Characteristics of Corrective Waves
  3. Elliott wave trader
    A few tips that can make the whole process of Elliott Wave trading a lot easier for you.
  4. Impulse Patterns
    1. Impulse Patterns in depth
    2. Profit Taking at the end of Impulse
      After every big rally there is profit booking, the profit money is re-invested into the portfolio, and then the market again starts to climb.
  5. Corrective Pattern
    1. Simple Correction
    2. Complex Correction
      Each segment composed of smaller waves.
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