This is a very good profitable day trading strategy i am following for Tata Motors. It could work with other stocks as well as long as its a good momentum stock.
Entry Note down day hi, lo at 10:00 AM, go long on breakout of high or go short on breakout of low. I dont use any buffer. I place orders blindly. i dont wait for a pullback. I place orders on both sides (some brokers may not accept this). I cancel the other leg if one leg is triggered. I dont trade this on both sides on same day. only one trade per day. thats all !!! so simple !!!
Stoploss. Never open a trade without a stoploss. In this case its the other side hi/lo. For example, if you entered long, then SL is low of the first hour candle. similarly for short, its high of 1st hour candle. again i dont use any buffer. but you can chose some buffer for your comfort
Take Profit. This is the tough part. I am not a big fan of trailing stoplosses. Lot of times it eats into your profits. ofcourse sometimes you could lose a big move. For me a fixed TP is preferable. Its 75% of the 1st hour range (high-low). Why 75% , why not 100% or 50%. you could chose any number you are comfortable with. Again this is a function of how large is the range. if its a trending day (i wish i knew this at 10:00 AM ), you can go for a larger profit. with 75%, RRR is less than 1:1, but the hit rate is good, so i am comfortable with this
Backtesting Frankly speeking i dont have tools to do this. i have the data. but need a afl which could do this. but i am following this for last 1 month and very very rarely i end up on losses. every week is profitable so far. pl paper trade for some days before you follow this
Why this will work. Market tries to settle down in first 1 hour. then look for the direction. so we go in the same direction as breakout
No trade If the 1st hour bar is too large. any thing above 12 rs is no trade for me
Example
Mar 5 2010
At 10:00 AM , day high = 814.8 low = 809, so range is = 5.8 , placed buy order at 814.8 and sell order at 809 , sell order got filled at 10:13 AM , take profit for this is 75% of range = 809 - 4.35 = 804.65 , stoploss is high at 10:00 AM = 814.8 . Result = take profit hit at 10:18 AM. this is a very very good trade, that lasted just 5 min, but every day wont be like this. if i havent taken profit at 75%, instead waited till close, i would have gained 15 rs instead of 4.35 rs. but i prefer fixed targets
Entry Note down day hi, lo at 10:00 AM, go long on breakout of high or go short on breakout of low. I dont use any buffer. I place orders blindly. i dont wait for a pullback. I place orders on both sides (some brokers may not accept this). I cancel the other leg if one leg is triggered. I dont trade this on both sides on same day. only one trade per day. thats all !!! so simple !!!
Stoploss. Never open a trade without a stoploss. In this case its the other side hi/lo. For example, if you entered long, then SL is low of the first hour candle. similarly for short, its high of 1st hour candle. again i dont use any buffer. but you can chose some buffer for your comfort
Take Profit. This is the tough part. I am not a big fan of trailing stoplosses. Lot of times it eats into your profits. ofcourse sometimes you could lose a big move. For me a fixed TP is preferable. Its 75% of the 1st hour range (high-low). Why 75% , why not 100% or 50%. you could chose any number you are comfortable with. Again this is a function of how large is the range. if its a trending day (i wish i knew this at 10:00 AM ), you can go for a larger profit. with 75%, RRR is less than 1:1, but the hit rate is good, so i am comfortable with this
Backtesting Frankly speeking i dont have tools to do this. i have the data. but need a afl which could do this. but i am following this for last 1 month and very very rarely i end up on losses. every week is profitable so far. pl paper trade for some days before you follow this
Why this will work. Market tries to settle down in first 1 hour. then look for the direction. so we go in the same direction as breakout
No trade If the 1st hour bar is too large. any thing above 12 rs is no trade for me
Example
Mar 5 2010
At 10:00 AM , day high = 814.8 low = 809, so range is = 5.8 , placed buy order at 814.8 and sell order at 809 , sell order got filled at 10:13 AM , take profit for this is 75% of range = 809 - 4.35 = 804.65 , stoploss is high at 10:00 AM = 814.8 . Result = take profit hit at 10:18 AM. this is a very very good trade, that lasted just 5 min, but every day wont be like this. if i havent taken profit at 75%, instead waited till close, i would have gained 15 rs instead of 4.35 rs. but i prefer fixed targets
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somehow missed it!!! 
