In this post, I will describe you a very important strategy which could fetch you a good reward in short time. This strategy could be applied to intraday or positional setups.
Indicators
- RSI
- MACD
- Volume
Requirement of this setup
- Huge selling pressure
- Huge volumes (70% more than average volume)
How to use?
Under this strategy, we try to find stocks which are facing continuous downtrend in daily/ hourly/15 mins time frame. We try to see the pattern in volumes and those should be at least 60-70% more than average.
We enter when we see a trend in stock is changing. Basically, we buy at support and sell at resistance.
How much profits can you make?
For intraday trades, it could give at least 3-5% gains in a very short term.
For positional trades, it could give you at least 10-15% in 1-2 week duration.
Important notes
- Such stocks are usually very volatile and can suffer continuous downtrend.
- Your stop loss should be big as said previously stocks are very volatile.
- If your support is broken, just exit, you should not hold your losses.
- If you are doing Intraday, you should always trail stop loss as you never know when profit books start. Your aim should be to preserve your capital instead of making huge profits.
- Avoid being too greedy, once your target is reached, just exit.
Read: Intraday Tips for traders
Examples
