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Saturday, 1 July 2017

How to trade with Intraday Levels; Intraday Money Management;


  I had made this post after studying the SL hit scrips for which I presented the levels. And you can use the same method, when you are following the levels of anyone, whether it is paid or free or from your friends.

Important to win intraday trading is not best strategy but the best Discipline, practice and psychology , This may sound funny but as per me, who understands this, will be a true winner.

Note: This is not the strategy for the increase of profits but best for cutting losses. If you think deeply, you can understand that gaining in intraday is not about earning huge profits with huge losses but its all about earning decent profits with small losses.

This section explains,

1. When to enter a trade?
2. When to keep SL?
3. When to book Partial profits?
4. When to book full profits?
5. How to do money management?

Before going further, just peek in below link to understand the basic things to follow on intraday


So lets look a reco, a conventional call looks always like,

Company: XyZ, Buy above 100, T1 104, T2 106 SL 96 (T1 & 2, Target 1 and 2, SL=Stoploss)

Money Management: 

The reason why i keep the Money management at the first place is because this is the most important aspect of the intraday, which every trader misses.

So before we go further, first decide how much you are ready to lose today in intraday? Yes, this approach will make your intraday peaceful

O.K, now we got a call but no call will come with qty, they always say trade as per your risk, so as said above, we already decided on how much to lose say for example our daily loss target is Rs. 1000, then as per the above call the max loss = Buy price - SL = 100 - 96 = 4 Rupees.

Now this will also answer How much qty to Buy for intraday?

  Never take more than 2 trades at a time, so 500rs risk per trade and just divide this amount with 4 rupees = 500 / 4 = 125 Qty you are going to buy.

When to Buy or enter a trade?

  We got how much to buy now we will just see when to buy?

All the levels are given base on support and resistance, even its due to yesterday's hot news but the levels are derived by support and resistance only. Just remember this fact.

Now our buy price is 100, just open chart in 5 Min and draw a horizontal line at 100 (I prefer 15 Min chart if your not trading on prefixed levels and without using charts you are not suppose to do intraday)

Now wait for the 5 min candle to close above 100 and then enter the trade on next candle open. This allows you to safeguard from false signals and breakouts, although you may loose wonderful opportunity if the bar shoots very high (big candle) but as earlier said intraday is about safe game, loosing less always better than chasing big.

When to keep SL?

 Now we already entered a trade but now when to keep SL, stop loss.

I prefer to keep SL as soon as our buy order executed because later you may hesitate to keep by looking green bars at low. This practice will ensure to limit our losses. If you want, ask your trading friends the biggest losses, some may 5k, some may say 10k or even 15k, but all of same resaon, ignoring the SL.

One great man said "If you are not ready to take loss, you may end up with huge losses"

So always keep SL order immediately when your order got executed.

When to book Partial profits?

Now patience game starts, you entered trade and kept SL order now change your chart to 30 Min, so that you need to worry about volatility and can keep your mind calm.

You hit T1 and wait for T2 and end up in losing side. So its always better to book partial profits.

You can enter the Square off order or sell order and keep the T1 price in SL and trigger price 10-15 paise below the T1 but input only half qty, in our case nearly 73 Qty.

After you hit T1 your position size will become 72 and your realized gain will be 104-100=4 x 73 = 292 rs. Now revise your initial SL order to Buy price (100) and don't forget to change the Qty  to 72 that is the balance qty.

When to close trade and book profits?

Now with 72 qty you can place a closing Sell order at T2 and can close your positions or if your confident of still upside and market (Nifty/sensex) is also moving in you trade side repeat the above step by selling 36 qty at 106 and revising the SL to 104 with the target of T1-T2 = 106+2 = 108 Rupees.

Now what if it didn't reached T2, so our SL will hit so we are selling at 100 which is also our buy price so with no gain or no loss.

But as we already booked profits so our total trade profit = 292 Rupees.

Here point to remember is we are risking 500 rupees to earn 292 rupees (but earning is 750 if t2 hit) so always prefer to enter a trade with RRR (Risk to Rewaed Ratoo) above1:1.5

If you see this strategy its full of Discipline and psychology trading.

 Always remember loosing less strategy is always better than Loosing:Earning high strategy.

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