STUDY

Effects of broad market trend, relative strength and C-Handle pattern

Decoding the process to find a favorable market and selecting the

best stock to invest.

Step-1: Finding the broad market trend.

You can’t make money unless the trend is in your favor. There
would be exceptions as always, but we can’t build any system
around exceptions.
When the market is trending against your position, there would be
either loss or breakeven.

One more failed BO

Standing firmly in a weak market.
How it has started
 How it concluded.

A stock which is strongly standing in a weak market, runs faster

than the market as soon as the market changes its sentiment.
 SWING TRADING SETUP
Tools and Indicators
Tools: AmiBroker for chart analysis/broker terminal for alert & GTT
Indicators: RS(55/D,21/W)/RSI(14)/Supertrend(10,3)
What you can’t miss: His deep understanding of price action & market structure.

Home-Work
Before knowing what-to-do, you should know what-not-to-do.
Never enter the market unless the following conditions are satisfied. Do not trade
just to kill boredom.
1- RS should be strong in multi-time frame;21 for weekly TF & 55 for daily TF.
Slope of RS is more important than reading of indicator.Its reading may be less
then 0, still upward slope shows the strength.
2- RSI(14) on weekly and daily TF should be more than 50.
3- Price should be trading above and in the close vicinity of supertrend(10,3) for
favorable risk reward.
Entry (Green Signal)
As soon as you find the above conditions fulfilled, look for an entry based on
price action.
1- There may be tight closing near the BO area (previous swing high/ATH) with
minimal volume (compression-expansion/dried supply/anxiety).
2- Look for a high volume bullish engulfing candle with heavy volume (confirm
heavy buying interest).
3- Look for a bullish pin-bar candle with heavy volume (confirm price support at
lower levels).
Alert (Orange Signal)
You should tighten your stop if any of the conditions below appear.
1- Stock heading towards the supertrend line.
2- RS slope starts heading downward (Stock losing strength wrt to general
market).
3- RSI slope starts heading downward (stock is losing strength wrt to itself).

Exit (Red Signal)

You should get out as soon as you find any or all of these conditions.
1- Long Bearish engulfing/bearish pin candle with heavy volume.
2- Biggest single day fall with heavy volume.
3- Stock close below the supertrend line.
4- RSI closes below 50.
5- RS become negative and heading downward.

My advice
You can survive by risk management only.
1- Never deploy more than 20% on a single trade.
2- Never lose more than 2% of your account value or 10% of your position size in
a single trade.
3- Do not lose more than 10% in a single month.If the threshold limit has been
crossed in a month, stop trading for that month.