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    Nifty 50 - Stocks - Day Trading Price Action Strategy

    Uploaded by

    Deviramma Nagaraju
    Day trading

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    © All Rights Reserved
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    Nifty 50 - Stocks - Day Trading Price Action Strategy

    Uploaded by

    Deviramma Nagaraju
    93 views14 pages
    Day trading

    Original Title

    Nifty 50 _ Stocks_ Day Trading Price Action Strategy

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    © © All Rights Reserved

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    Day trading

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    93 views14 pages

    Nifty 50 - Stocks - Day Trading Price Action Strategy

    Uploaded by

    Deviramma Nagaraju
    Day trading

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 14

    DAY TRADING

    PRICE ACTION STRATEGY

    © All Rights Reserved 2022


    Picture these: waking up without an alarm ringing over your
    head, no boss, no one to answer to, no work pressure, no
    need to ask for leave, no, nothing. Well, this is a life that you
    and I, and probably everybody out there dreams of. Because,
    that’s how lucrative it is.

    Well, do not ever think that this will remain a mere dream.
    Because I bring to you something that you want to have, a life
    living like a day trader. just you taking trade and earning profit
    anytime, anywhere. Well, all of this seems pretty much
    possible when you are a day trader. Seems lucrative? Oh yes!
    It is.

    Day trading has become one of the most lucrative career in


    this decade, everybody from a watchman to the C.E.O of a
    company wants to leave his job and do day trading.
    Getting into stock market isn’t a bad thing, it keeps you way
    above the inflation rate if invested or traded in the right stocks
    with the right strategy.

    Don’t worry, i’m not here to demoralize you for doing day
    trading. Instead, i will tell you how to day trade with price
    action method. But, before that let’s talk about what actually is
    day trading?

    What is Day Trading?


    Day trading, as the name suggests, it is a type of trading which
    is done with the intention to be terminated within day and is
    not carried forward to the next day.

    In india the equity market opens at 9:15 A.M. and closes at


    3:30 P.M. for 6 hours and 15 minutes. There’s is a saying that
    “amateurs open the market and professionals close the
    market”. But why so?

    It is presumed that every market is divided into three phases.


    Phase one, where the market is highly volatile and amateurs
    are very active during this period which makes the market very
    noisy- phase one starts from 9:15 A.M. to 10:30 A.M.,in phase
    two from 10:30 A.M. to 12:30 P.M., market starts to take a halt
    and start forming its direction whether to go bullish,bearish or
    sideways, it is observed that market is usually really don’t
    move much during the second phase. And then comes the
    phase three which starts from 12:30 P.M. to 3:30 P.M, where
    the smart money comes into the market, by smart money i
    mean big players like HNIs, institutional investors and
    professionals, who wait for the amateurs to react first and let
    the market form a pattern. And pattern formed by the market is
    called price action.

    Amateur v/s Professional Way of Day Trading


    An amateur trader always think that day trading means taking
    trades daily, an amateur uses a lot of technical indicators and
    switches from one strategy to another if one doesn’t work,
    asks for tips/calls from friends and take trades without proper
    risk management and without any backtested strategy. Why
    an amateur doesn’t make money in the end who does
    everything to churn out profits and loses his entire capital.

    Whereas, a professional only follows one strategy and firmly


    believes in following one strategy completely based on price
    action. A professional never jumps into market daily and when
    the market opens, he rather let the market indicate a direction
    which is clearly observed by the price action patterns formed
    by the market.
    A professional let the market come to his levels of trade, he
    doesn’t run behind the market. He is always calm, composed
    and patient when it comes to taking a trade. Okay, enough
    praising of a professional, now let’s talk about the favorite
    concept of a professional trader which has proven out to be
    the most successful way of surviving in the market, and that is
    price action.

    What is Price Action?

    Price action means the action or movement of price of the


    stock plotted over a time, price action forms all the basis of
    technical analysis of a stock.

    How a price behaves and what pattern it makes on the chart


    which has to be figured out by traders is known as price
    action.

    Price action is one of the simplest strategy to predict the


    market movements and make trading decisions accordingly.
    If your price action analysis tells you that the price is about to
    rise, you might want to take a long position, or if you believe
    that the price will fall, you might choose to short the asset.

    Looking at patterns and finding crucial indications that may


    have an impact on your investments are all part of
    understanding price action trading. Many traders utilise a
    variety of price action strategies to predict market moves and
    profit in the near term.

    Today, we are going to discuss top 7 price action strategies


    briefly:

    Rule
    Strategy
    No. - -21

    Price Action Trend Trading:

    Price action trend trading is the study of trends, whereas price


    action trading is the study of price movements. Traders can
    use a variety of trading strategies to identify and follow price
    action trends, such as the head and shoulders trade reversal.

    This is an excellent trading tool for inexperienced traders


    because it allows them to effectively learn from more
    experienced peers by chasing price action trends as they
    emerge. In the screenshot below, you'd open a 'buy' position
    to take advantage of the green uptrends, or a 'sell' position to
    take advantage of the red downtrends.
    Rule
    Strategy
    No. - -22

    Pin Bar:

    The pin bar pattern, also known as the candlestick strategy


    due to its distinctive shape, resembles a candle with a long
    wick. It denotes a sharp reversal and rejection of a specific
    price, with the 'wick' or tail indicating the price range that was
    rejected.

    The assumption is that the price will continue to move in the


    opposite direction of the tail, and traders will use this
    information to decide whether to enter the market long or
    short. For example, if the pin bar pattern has a long lower tail,
    the trader knows that there has been a trend of lower prices
    being rejected, implying that the price is about to rise.
    Rule
    Strategy
    No. - -23

    Inside Bar:

    The inside bar pattern is a two-bar approach in which the inner


    bar is smaller than the outer bar and lies between the outer
    bar's high and low range (or mother bar). Inside bars
    commonly appear during a period of market consolidation, but
    they can also serve as a red herring, signaling a market
    turning point.

    Skilled traders should be able to recognise this trend at a


    glance and utilize their macro knowledge to determine whether
    the inner bar reflects consolidation or a shift in the prevailing
    trend. The size and position of the inside bar will determine
    whether a price will rise or fall.
    Rule
    Strategy
    No. - -24

    Trend Following Retracement Entry:

    This is a fairly straightforward price action method in which the


    trader just follows the current trend.

    A trader can consider taking a short position if a price is clearly


    declining, with lower highs being repeatedly set. If prices are
    gradually rising, with highs and lows going higher, the trader
    may desire to enter the market.
    Rule
    Strategy
    No. - -25

    Trend Following Breakout Entry:

    This trend follows any large market movements, assuming that


    a pullback will occur after a price surge. A breakout occurs
    when a market moves beyond a designated support or
    resistance line.

    Traders can use this as a signal to buy or sell if the stock is


    going upwards or breaks above the resistance line, or sell if it
    moves below the support line.
    Rule
    Strategy
    No. - -26

    Head and Shoulder Reversal Trade:

    The head and shoulders pattern, as the name suggests, is a


    market movement that resembles the silhouette of a head and
    shoulders. In other words, prices rise, fall, rise again, fall
    again, and rise to a lower high before a modest drop.

    The head and shoulders reversal trade is one of the most


    popular price action trading strategies because it is relatively
    simple to choose an entry point (generally right after the first
    shoulder) and a stop loss (after the second shoulder) to profit
    from a temporary peak (the head).
    Rule
    Strategy
    No. - -27

    The Sequence of Highs and Lows:

    Price action trading is fundamentally a game of highs and


    lows. Price action traders can use the sequence of highs and
    lows strategy to identify emerging market trends.

    For example, if a price is trading at higher highs and lower


    lows, it is in an upward trend. It is trending downward if it is
    trading at lower highs and lows. Traders can use their
    understanding of the sequence of highs and lows to select an
    entry point at the lower end of an upward trend and set a stop
    just before the previous higher low.
    Wrap Up

    Price action solely can never help traders make money, one
    should check all the other factors on macro level like the
    market sentiments, any news which can affect the stock price,
    etc.
    Doesn’t matter you are a day trader or a swing trader, you
    should be profitable at the end of the month so that you feel
    motivated and can run your daily living from the earnings od
    stock market, and most importantly take only risk that have no
    affect on you.

    Thank you.

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