Hi traderwiz,
you seem very enthusiastic, which is very good. frankly speaking, it seems like you want to get started, but you are not sure about in what way you are going to approach the market. You should approach the markets with something solid in your hands.
You have to(and one must) develop a skill, may it be the tape reading, reading charts, trading news,etc
As you said, you traded reliance today. please tell me, based on which logic or analysis did you take the position ???
i trade the market using charts and within this word charts, comes hundreds of patterns and formations......... and with time, i have been able to find out, what patterns work best for me !
As you said, you looked at the chart of hdfc and hope you traded that........... did you try to find out what was different in hdfc from other charts that made it move ( that's the point ). do that............ your position should be backed up with any of your logic, whatever it may be, if it works its a fine logic.
If you are looking for stocks that keep moving all the time, don't go for heavy weights, go for mid caps like adlabs, hdil, litl, jindalsteel, orchid chem. these stocks have smaller floats compared to sbi's and hdfc's that is why they tend to give bigger percentage moves.
In real time, figuring out which stock is going to move is a lot harder for even experienced one
Becoming profitable in the markets would atleast take couple of months, its a long process. and if you want to move forward using charts, we are there to help............
Peace....................
Thanks to every one. My trading logic is very simple (but not easy):
Using a Renko Charts and catching the trend. I am not sure if any one is using Renko Charts or have access to it on your charting program. You may google "Renko Charts" and try to read it if you are not familiar with it. It will take you just 5 minutes max..... In a nutshell, Renko charts show you the trend in bricks. If the brick is hollow or empty (green), it is advisable to go long and if this Renko is filled with red color then you would go short (at least, thats what the text books say).
This is my KISS (Keep it Simple Stupid). This is my strategy. There is no logic here. In my opinion, a day trader doesn't need any logic. If you are Warren Buffett or Rakesh Jhunjhunwala, then you need that logic factor. Here my logic is to stay with the trend. Thats it. A candlestick chart doesn't help me stay with the trend. But a renko does. I will try to post a renko chart (after I figure out how to post it on traderji).
My logic is this:
A day trader/scalper needs to be in a highly volatile stock to catch those moves.
This Renko chart shows these trends. Try it and see for yourself. The candlesticks can confuse you. Especially when you look at a 1 minute candlestick or even the tick charts, every one of these charts would tell you one different story (and least to me) and every time I look at this candle, i get so confused that I don't know what to do. This is "trader's block" syndrome. I mean, a 1 minute candle would say long, but a 3 minute candle would say short and a 5 minute candle would show you doji. etc. and so forth....
Not with this Renko. Looking at a renko chart for say, reliance, it looks so easy. it looks so simple. my thinking is that even a dumb monkey can be trained to buy when there is this hollow green box and sell or go short if there is a red box. The problem with this renko chart (or with any trend following method) is that u get hit pretty bad if the market is choppy or if the market is in a range. So this Renko would not work for a stock that is trading in a range. But then, no body knows in real time whether if a stock is going to "break out" or if it is "in a range". The best you can do is look at the stock's trading history..which is what I did.
The mother (Reliance) is very very volatile every day. I guess one day she moves and the next day she has decided to just rest peacefully.... So here is my logic: use a Renko charting technique to follow "the mother" to help you stay with the trend. I can show you how simple and easy it looks on a chart after i figure out how to upload it. Renko can really help u stay away from the noise factor.
The bad thing about Renko is that it is LAGGING. If you say for example use a 5 minute Renko chart, you would get some boxes after 5 minutes. The current trading price, may not be even near those boxes (at least for "the mother"). To me this is the "noise". So i convinced myself "to have those balls of steel" that every trader needs to have and just follow the signals that my renko tells me. But then, i just realized that i have balls of plastic and can't follow my own simple basic rules some times....
no brains involved here. just reacting i.e. if the box is green and empty stay long and if the box is read and filled then go short. You may also combine this with the usual "hanging man candle" or an "inverted candle". but then, u may end up getting the trader's block syndrome and can't pull the trigger due to confusion or analysis paralysis!
For those of you who have any charting software, just try renko on Reliance (say 5 minute chart) and see for yourself. How easy does it look? But i guess this is would be analogous to watching Sampras or Tiger woods playing tennis or golf and saying, "hey, that was so easy"!
Rajesh
