Saturday, 20 July 2013

ADVERSE TRADING- small but frequent profit

ADVERSE TRADING

When market is  range bound or even in extreme picks , this method is useful.

Normal tendency of trader is to buy in buying market and to sell in selling market.
But in adverse trading we are going just opposite.



If market is moving in range,
suppose nickel is in 810-815range,
we can buy when it is coming down with just 2pt sl. buy 811sl809 book@814.
and sell near 815.sell814 sl816 book at 811.
your brokerage cost should be less for this.

if range breaks,then go for single new direction.

In extreme moves,suppose crude moved from 5260 to 5340.ATP is 5290. then you can sell crude @high 5340 sl5345. this SL may hit in 10sec,then sell it @ new high (say 5357 SL5362
try it 3 times with total 15pt risk .

If  you become imotional when number of Sl hit ,then this method is not for you.
Do not repent and do not react.
If we planned for +1500 max stoploss,then stop immidiately and leave the screen.

See chart of any commodity,
suppose copper made a high of 417 @10.55am in morning,then it went down to 415.2
after 3 hrs,it came again to touch 417 resistance level @1pm.
You can't watch screen all the day.

But it can be done,
at 11.30,when you are leaving,
place a selling order@417 sl417.3 tgt 416.2.
notice this - when any level is touched after a gap, price exhaust once then it comes back and breaks the level.

We can use this small downfall with minimum risk,but margin will be very less and time will be very short.
Test this method in single mini lot and after 20days ,we can go for 3lots.
Without strict stoploss ,it is very very risky to try this.
Some traders are using this technique only since years easily.

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3 comments:

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