Swing traders night mare & market crashes

Swingtrading In Crashing Markets and swingtrading and market crashes

Investigate POSSIBLE remedial actions
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HI GENTS,

Every time I hear from my friends,
I LOST MONEY AS I HELD some positions during recent crash.
What is the way out?
My policy?
when market crashes,dont be in it.
Dont wait till market CRASHES by 30%,when you can exit at 5% loss.

Think how much loss you can really handle if hell breaks loose, and be prepared as to how to deal with it.

(I always wonder how Warren Buffet handles it? Since he got lots of funds,and in the wait for downfall to buy high value select stocks at lowest possible price below the intrincic price,he got no problem may be)
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DANGERS IN SWING TRADING

SWING TRADING DOES NOT WORK IN FALLING MARKETS FOR STOCKS.
(Question: where does it work? In futures and options market)

Look at this scenario.
And think how you are going to handle this if you are totally invested in swing positions in stocks.

Market was moving up and you bought stocks.
suddenly Nasdaq crashes and OR A GOVERNMENT CHANGES.
All big wigs exit market and go into cash. Of course they wont tell you.
Market crashes by 400 points or 800 points in hours.

Remedy area
What are possible solutions to this problem?

1. By using a daily conservative critical stoploss. How do you get it? just use a 5% or 7% or use a ATR, average true range, and keep stoploss just below it. Where to get ATR? look up www.icharts.in, and charting therein. Use a ATR-20 period.
2.By following what the FII or Mutual funds are doing?
3.BY having a trading terminal where u can feed a basket order to liquidate all your positions at once.
4.By beginning to exit before you sense adverse market conditions,well before the crashing day.
5.SENSE THE BEGINNING OF A NIFTY OR SENSEX TREND FAILURE.
6.Prepare to risk less on priority to protect your capital rather than wait for a profit.
7.what to do if after you exit all your positions,market goes up by 200 points?
Just imagine that situation when you might be doing after a market crash by 400 or 800 points in comparison to missing on a 5% rise in profits?
what is your priority,I mean first priority?
Risk control or extra profit? MY PRIORITY=RISK CONTROL FIRST.
Thought provoking?
aS FOR THE REMEDY LIST, I wish TO KNOW THE TOP PRIORITY in the order,and what ever I missed.
Please help!
me and all the Loosing swing traders!!!!!!!!!!!!!!!!!!!!!!!

RVLV


My gift for swingtraders
Three rules to calculate=critical-very very

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Three rules to calculate and follow in a plan to swing trade are


1. Initial stoploss,
2. Trailing stop,
3. Price target for gainful situation
4.Breakeven stoploss
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1.Initial stoploss=2% below entry price
entry 260, say then
initial stoploss=260 minus 2%=254.8


Precaution: Dont keep initial stop as it is.
Move initial stoploss for more gain-less loss,as price moves up.


2. Trailing stoploss= 20DMA-ATR(20)-1
if price rising, then for 20dma=230,atr=12.4,
trailing stop=216.6

3. MAXIMUM GAIN PRICE TO SELL= 5*ATR(20)+20DMA
IF ATR=12.4, 20DMA=230, then price to sell for highest gain=62+230=292

ATR(20)= AVERAGE TRUE RANGE OVER 20 DAY PERIOD

4.BREAKEVEN STOPLOSS=Buy price plus brokerage for buy plus sell
oNE WAY TO AVOID LOSS. no loss no gain. give me my money baclk-policy
What would you do, if the stock is not moving much for long time, but manages to move above breakeven stoploss? sell at least a 30% of your holdings, then wait for better opportunity to make profits.
actually you move from intial stoploss to breakeven at the first chance yoiu get and then move upwards to profit target.

WHERE TO GET ATR?
use www.icharts.in