Weekly blog of my best trades and setup in detail

ryan4ucar

Well-Known Member
#2
Opto circuits Multiple Time frame analysis and setups since earnings

I feel really sad for investors who call on cnbc saying that they had invested in stocks like optocircuits at say 400 and now since the stock is at 200 add to it , then add at 50 and so on. Its sad because these innocent people are probably middle income and want a bit of investments from their savings and end up gambling in the stock market . Innocent or not the market just doesn’t care it just cleans up the looser and money is transferred to other people(some are smart savvy traders/investors some are insiders).

Markets exist for the sole purpose of providing liquidity its not right to blame FII’s or pool operators or the finance minister just blame yourself . You can argue that they move the markets with their big money sure but they dont have a gun on your head to invest/trade isn’t it ?

There is not one right way to make money in the market there are many, one of the best ones is follow the market which is trending on all time frames. In this blog i will analyse how best to trade optocircuits and get information on important levels to make trades in the futher days.




If you stare at this weekly chart its scary for an investor who started at 250 , the volumes are constantly increasing on the down side , which means that a lot of bottom pickers ar getting hurt every day almost , anyways moving onto the daily.



43 is the last panic bottom below this everybody is under water and will want to get out hurriedly , so more panic will be created as more stock is sold if there is no suitable bounce in the next few days after the latest panic look for more panic to follow its amazin the depth ans highs to which stocks can fall.moving onto intrday now.



Opto came with bad earnings guess what stock goes down , these patterns are typically occur in long term down trending stocks like compgreaves comes to mind , some people get short/long before earnings which is like gambing, some people as soon as earnings are release ,very risky but rewarding if stock moves ur side , i like to wait because i know ill be getting opportunities with it the whole day if it trends ,

usually after 1st move i look for how much retracement a stock makes if nothing at all or little , there is indication of large demard or supply , which is your edge as a trader , if you have an edge you are way ahead in the game , as is obvious from pic i got short on 2nd leg down move i dont like intiating a full size in one go ill scale in and out its the best way to trade according to me. as controlling risk is my primary aim as a trader. on panic down moves or elated upmoves i almost always take profit and is the volume is large enuf ill even reverse a postion , panic moves punish traders who come late to the party its greed and fear basically.

so i reversed my position at around 40.8 something thinking a bunch of people will be waiting armed with bids at 40. when i reverse i only scalp so i put offers at 43 the poor stock could not move to even 42 i got out , then in the consolidation below there were new lower highs but i was worried about the people at 40 and the stock beng down a lot.but a 40 approached it went up a bit and the bids were being smashed so i got short another down leg started and i din get short here dont exactly remember y but i did add on the next leg and got out and reversed to long again although the reveral din work… in indian markets because of the lack of liquidity and abandance of bottom fishers who believe in stocastics stocks do bounce. anyways bounce play is just snack the real play is follow the trend , which comes to my 1st mistake i did not short the 35 to 30 move just because i tought that stock was oversold , who cares what i think the market does what it does best proves you wrong hehehe ,but i dig not a large volumebetween 35 to 30 which usually gives a indication that the next day will be a inside or range day

Above 35 ill look for longs , below 30 ill look for shorts and in between ill just range trade the market. Well move on to the next day



I mostly dont like range trading as the risk reward is less but what i like about range trading is if you identify levels your probability increases to sometimes 80-90 %

I came in the next day armed with levels of 30 and 35 i tought all sellers were done selling . One of the things i like when a stock trades on the downside with a big loss and opens gap up the next day is will the gap fill and the stock go even lower usually this happens at the open when volume is high so the stocks opens gap up a little then goes down immediately i get short it ploughs trough 30 like hot knife tru butter , i was worried about 30 i din add then at 29 it stalls and climbs higher oh oh not good but at 30 i see a bout 3 lac shares on bid taken out in an instant y the time its to late and i get out at 31 giving most of my profits so range day confirmed iset alerts for 35 and 30 and move on to other stocks as this is not worth my time now. later in the day i check back to whatits doing at 11 its in a uptrend trying to break and fail at 34 , if i short here my arget is at 30 i can risk about 50-75 paisa for 4 rs gain risk reward is pretty good, now i just have to wait for down trend to break and a lower high to be formed so i get short at 33.4 with target of 30, if it goes down quickly to 30 i will reverse my postion to long as this is a range day and not a trend day , but as often the case is with range trading doubts crrep in ur mind when stocks start supporting at certain levels near 32 stock was holding for too long so i got out of some then at later on again it startes supporting so i get out and a few minutes later stock is at 30 all that risk all day for nothing , i started bidding at 30 but no one gave me anything if i had started shorting here everyone would have given me everything , thats how the stock market is when you are wrong you can get all the stock in the world you want whan you are right nobody gives you anything you have to grab it aggresively then.



35 to 30 being the new levels your edge lies near them inbetwen is all crap and if you trade youll overrade and most of the times lead to losses this is called the no trade zone , use your time to find something else at the end on 6th jun it came down quickly to 30 you can bid there i din trade that but it went upto 31 and came back a small looser but what happens after that is important what does the stock do at 30 now put your trading cap on if it closes below 30 another trend day tom maybe it crashes to 20 who knows



the stock closed at 29 but the down leg had started at 30 .5 so next day plan was if it trades on the open to 30 and 30.5 ill get shot with an out above 31 i put offer at 29.8 and 30.4 and got taken out at 29.8 it went to 28 and then stopped i was fully ready to short more when down trend resumed but the stock market is totally unpredictable it started inching hiher and hilding at which point i got out , after that it was an outside range day , later in the day it supported 28 again .

An out side range day is some times good as the stock can form a tren day the next day if the previous support breaks easily , 28 was my level the nest day it just ploughed through it on the open you have to be quick here as bids with big quantities will dissapear quickly and youll get bad rates for your stock , although if you get bad rates you should be happy as it proves the stck is weak and will readily fall ,i missed te trade as i was clumsy on the keyboard it started supporting at 25 and a desending triangle pattern forming then the range got tight at 25 this is when the stock gets cornered if 25 breaks then more people get flushed out 25 broke i got short out some near 23 shorted more below 23 nesx stop was 21 i got out fearing that people might buy 21 and not wait for 20 since the collapse started at 50 , i should have reversed the position but did not it went till 22 and then collapsed again to 20 really , i was really thinking the stock would go to sigle digits in the nest few days maybe after thus heeheh , then later in the day it just traded on heavy volume above 20 till 22 could have go long actually but seeing the damage done and how easily the stock falls i din have the courage which was again the right thing to do , u see the chart and then think i could have done this and could have done that , but in realtime its totally different you just think of many ways a stock can trade , i always create a plan in my mind , i trade with size when my trades are in with the trend on all time frames and i trade a small size when i scalp or range trade.

So next levels were 24,23 and 20 , 24 was the real resistance and 23 was from where the stock brokedown , the nest day i will plan for a range trade between 24 and 20



next day i shorted 24 and 23 got out of a bit near 22 and the rest near 20 reversed the position with a big bunch near 20 got out most near at 21.5 got out of rest near 24 reverses to short again at 24 and got stopped out just above 24 it went till 25.5

after this 25.5 and 20 are my new levels , i dont trade the next range day after the first one util it reaches my levels as a rule so set alerts look for something else.



try and trade in the range and get chopped up here i dont have an edge here no point trading look for something new and exciting life is boring here, although in the end it became exciting and i commented it on the live diary i will maintain .



I think this stock will pretty soon go below 2o and the digits probably or it might consolidate and then move up a bit i dont care i will trade as it develops.



The lesson here is all days are not equal , on trend days you have to trade more size and on range days you have to trade less size sometimes trend days dont work , that does not mean i sit idle i generate information for a range day and trade the range day with less size some times i make more money on range days due to constant trading in the range.

If i am a one trick pony and anticipate a trend day every day then the market will be happy to eliminate me soon and naukri.com will become my favourite site.

Adjusting as a trader is very crucial for long term success. Best of luck for your trading!!!
 
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soft_trader

Well-Known Member
#3
Thanks a lot Ryan for your analysis. It is superb.

But One problem. your images are re-sized to smaller size. So it is getting difficult for me to read into the comments that you made in the images. Can u please post bigger size image?
 

Taiki

Well-Known Member
#4
Thank you Ryan.. Quite informative and good learning experience.. :thumb:
 

ryan4ucar

Well-Known Member
#5
Thanks a lot Ryan for your analysis. It is superb.

But One problem. your images are re-sized to smaller size. So it is getting difficult for me to read into the comments that you made in the images. Can u please post bigger size image?

Thnaks man i realised and changes it yesterday. cheers
 

ryan4ucar

Well-Known Member
#7
Using Nifty Information to play Market stocks with good Risk/Reward.


One thing I like about trading any market is after a big violent move up or down, there will often be follow through moves in the original big move direction , this is because ..guess what greed and fear. After the 1st move most people wait some if wrong or even right get out right away, most people if wrong freeze and hope, the smarts ones on right side show patience as they know odds are in their favour that it will show follow through and they will even add (this is how they make average trades great winners).The frozen people loose their thinking capability and become slaves to market. At this point break even is the only thing that can save them thats y the pscology to add to losers so they feel closer to break even. This is how basically trends get formed winners win more losers lose more

Another point is when a global event takes place like the FED action , then big funds unallocate and reallocate money, this will have ripples through all markets atleast for a few days. So after the fed statement the nifty basically gapped down and fell like a rock, most people think that if they had shorted before the event they would make a ton of money just luck is not on their side. Hindsight thinking is very easy after the event has taken place and if you do that you fail to stay in the present and miss the next opportunity. Sometimes you are so angry at yourself for missing the trade you never would have taken in the first place that you will do the opposite and go long in a falling market.

The last point is traging nifty/banknifty all day isnt efficient as you bet a bunch and either lose a bunch of money or make a bunch of money .A better way is along with nifty if its going down short the weakest stocks and if its going up get long the strongest stocks , the risk rewards are better here sometimes better than 1:5 whereas nifty could be 1:2 or 1:3.

Anyways coming back to the technical part



1st day 1st show gap down , go down stay there, later go down more , overnight us markets tanked again , next day even mote pressure as we gap down again at 9.15 and go lower by 945 the mini down trend gets broken, this move i thought was a but fake as most of the strong nifty stocks went into the inside range trade of day before and never gapped down. The risk reward is also bad as the nifty having gapped down seemed a lot oversold . After such big moves as sudarshan sukani rightly says wait for pullback and stock to go sideways then short which is so true, when a stock makes pull back and side ways it is creating enough losers again also big funds are now scared and see this as chance to unload for you dont know what will happen next. The uncertainty of short term future panics every one.






This uncertainty can really panic stocks in a big way as if there are not many bids to support they will fall to a geater extent than nifty. The previous days last down move started at 5675(index not futures) which becomes critical .




Late in the afternoon when nifth reaches there it stays above 5675 for 30 mins then comes down tries to go up at about 1.30 and fails this is the time to get agressive with the futures and stocks.

some weak stocks i was watching from the morning were dlf, unionbank and bfutilitie








These stocks were weak on the daily and the day before so were easy to predict risk rewards were beter than nifty cause in a panic nify will have more supporters on the bid then these stocks.



A as side note i went long strong stocks like drreddy, auropharma, sunpharma in the morning










As you can see although the nifty went up , most weak stock stayed there but these strong stocks (drreddy ,sunpharma,and auropharma on the daily look good) went up quickly in the morning , there were some small losers as well like i shorted dlf ,bfutilitie early morning and jetairways shot stopped me out, a big winner scalp if i can call it in frl from 85 to 97 long, and a scalp long in rcom.



Anywys cut long story short , its good to find good stocks beaten down beacuse of overall market the previous day and go long when the nifty recovers or also go long when they recover a bit. But this is with less size as u are trading againt the big trend, when big tren resume put on your maximum risk and you get maximum reward. Trade well!!
 
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