#TrendFollowing
#StockFutures
The Complete #Trading #Process

1) Stock Selection - Buy Strongest, Sell Weakest. Combine Higher TimeFrame to Identify Strength/ Weakness

2) Entry SetUp - Enough FirePower for Sustainable Trend Going Forward (1/n)

3)Trend Confirmation - That Point from which chances of Reversal are Low so as to achieve Higher Win Rate

4) Low Risk Entry - Costs Saved in Execution are added back to profit. Use Mkt Fluctuations in Our Favour (2/n)

5) Initial SL- Uncle Point. Not Too Tight, Not Too Loose, Just About Perfect. Let the trade breath before leaping forward

6) Trailing SL - Reduce Open Risk in Trade Continuously Simultaneously allowing Trend to Develop (3/n)

7) Profit Booking - Don't Look for Top/ Bottom. Catch 70-80% of Max Profit. Most Difficult Decision. No Perfect Exit. Break in Multiple Exits. Be happy with Whatever We Get (n/n)

#TrendFollowing
#SystemTrading
#StopLoss

In TrendFollwoing, We Look To Enter Trade & Keep Holding as Long as It is in Our Favour. Initial Stop Loss Is Important Part of System Trading.
How To Decide What Should Be Initial StopLoss? (1/n)

Too Tight StopLoss Will get Stopped Out Frequently.
Too Loose Will Cause Bigger Loss & LessRR.
What Is Optimum StopLoss?

We Need To Generate Data on What is Called Minimum Adverse Excursion (MAE)

MAE Is The Max Amount By Which Trade Goes Against Us From Entry Point (2/n)

MAE Can Be Measure in Amount Or Percentage Or ATR. We calculate MAE In ATR so as to adjust for Different Volatility of Different Scrips. Here You Can See The Data for MAE in ATR For Our #Stock #Futures #Swing #Trading System For Long & Short Trades For December (3/n)

Visual Look Tells That Price Doesn't Go Against Us By More Than 2 ATR in More Than 95% Of Trades. So We Can Safely Take 2 ATR StopLoss For Our Trades From Entry Point. Also, More Than 90% Of The Trade Show Loss After Entry Which Can Be Used To Decide Level Of PullBack Entry (4/4)

This System is Based on 25Min TimeFrame & 75 Candle ATR. Every System Uses Different Entry Method, Different TimeFrame For Signal Generation & Different No Of Candles For ATR. So Don't Assume 2 ATR is Universal Stoploss. See What Suits Your System & Then Develop Own StopLoss (5)

#BollingerBand Squeeze Breakout

Sharing An Entry Set-up For Cash Market Since Cash Market Is Running Hot Currently

Bollinger Bands Are Volatility Bands with Centre line, Upper & Lower Band

Centre Line Is Simple Moving Average

Default Is 20 Period Simple Moving Average

Upper & Lower Bands are constructed by Adding / Subtracting Standard Deviation Values from SMA

Default is 2 Standard Deviation Away from 20 SMA for Upper & Lower Band

During Trending Phase, Bollinger Bands generally expand as Standard Deviation Expands in Trending Phase

During consolidation standard deviation drops, causing Upper & Lower Bands to contract towards centre line

This Gives the look like bands are getting squeezed, hence the name Bollinger Band Squeeze Breakout

Entry Setup occurs as below:

1. After Good Rally, Price takes pause, goes in consolidation of few weeks, typically 3-8 weeks

2. Bollinger Bands tighten or Squeeze, indicating volatility contraction

3. While bands are in squeeze, price rises to Upper Band

4. After Touching Upper Band, Price is Rejected

5. price Rejection creates Lower Low on Daily charts, which is called Bearish Fractal

6. High Point from Which price is rejected & creates Bearish Fractal become Breakout Point

VWAP starting with day open candle is quite popular

Try #VWAP with period for change where period equal to number of bars in trading day. Acts as magnet for Intraday Mean Reversion moves

Exibit- Banknifty of last 2 days

#SPX approaching very important turnaround zone

3 Yrs SMA which is repetitive support & AVWAP from Pre-pandemic High / Pandemic low

This could be final selling around 3700-3800 zone for this leg of sell-off before counter trend rally for 4-8 weeks

US #VIX vs #SPX

VIX spikes above 30 are common but print above 45 have marked major bottoms

VIX at 33 today, yet to get there

#SPX AVWAP from pre pandemic High & Pandemic low around 3866-3780 . That's like 6-8% more from here and should provide launchpad for fierce bounce. Tough May & next 2-3 weeks though.

#INDIAVIX print above 35 has been good time for investment in last 10 yrs of Market

Feb VIX printed 30 . If it spikes further in March, can be good time for catching falling knives in Stocks.