Thanks for your inputs guys. I do feel that candle stick patterns in very small time frames may not be too relevent but in the larger scheme of things they do see to display some info on the psychology of the traders. Or so i feel.
I have one last question here - how does one start finding good stocks to trade for the day? The use of scanners?
If you are new to intraday trading...start with Reliance Industries, HindUnilever, you can practise on these 2 stocks. I dont mean these are good for trading, they are good for practising.
How to identify good stocks for the day ?
Generally traders follow 2 methods:
1) They select a set of stocks ( 5 or 10 ), keep track of those stcoks closely in all aspects ( news, technicals, funda..) and trade intraday only on those stocks when ever they find an oppurtunity depending upon their strategy.
These set of stocks may keep changing for some reasons, but the central idea is to concentrate only on a select group of stocks.
2) They dont have any choice of stocks. They trade any stock depending upon their strategy signal. ( ofcourse here also stock should have basic things like liquidity, bid-ask spread etc ).
I prefer the first method.
And some precautions i take while trading;
1) If there is any news on the stock..just dont touch it. Any kind of news..good/bad..just leave it..
2) When there is no news on the stock...Broad market influence wil be there on it. So we should not trade the stock against the market.
3) We must understand when to average and when to cut it.
40% of my intraday trades i close them at entry level.
Reason - When i buy at 100 and if it comes to 99 and after some time again it touches 100...then i simply exit the stock at 100. No second thought.
Generally when we trade stocks based on any strategy or signal, there should be good probability that those signals when failed, should atleast give a exit chance at break even level to exit. Once it gives an exit chance we should no longer stick to that trade expecting some profit.
But if our strategy signals are failing in such a way that we are not even getting exit chances..Its something wrong with the method..
