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Trading Styles

Swing Trading

  • When you buy stock for shorter duration just few days
  • Low risk stoploss withing 2-4%
  • you normally ride stock until first momentum burst
  • If you find any good uptrending stock you'll find multiple swing trading opportunity in single stock
  • stoploss is very tight, day low or low of past few day or 10 day depending on price action
  • You normally sit out before earnings
  • Require less skill, you won't loose much even after making mistakes
  • Low Risk setup are more suited for this
    • Base on base breakout
    • Inside bar breakout
    • Flag breakouts after big base breakout in uptrending stocks
    • Range or trend breakout with clear pivot point and low risk entry
    • more suited for beginners with small to medium amount of capital (less than 1 crore)
  • Benefits
    • You're benifit greatly with high number of trades
    • much higher level of compounding if you manage your position well
    • You'll be out of market at very small loss when market health deteriorite or market crash
    • you can do this in any market condition, even in bear market there's lot of small rallies for few weeks, same case for side ways market
    • since you're taking more number of trades for small duration, stock picking is not that critical. you'll have time to correct your mistakes
  • Downside
    • You can miss out on un expected gains due to market news or good news about stock like very strong earnings
    • Very high maintainace, you'll be taking positions or selling out on almost every day so expect 3-4 hours of active trading
    • Sometimes stocks can keep going up without any good setups or market health
    • not much to doo when market is not uptrending or very volatile

Positional Trading

  • When you buy stock for longer span
  • Stoploss is high for this kind of trading around 6-8%
  • you can ride stock until next base or for entire duration of stage 2 uptrend
  • if you find any uptrending stock you can keep builing position after each base/pivot
  • normally sit through earning release volatility
  • stoploss is below 3-4% below 21 day or last swing low
  • More benificial with large capital individuals (in crore), because it's easly to build large position with this method and you don't have to spend entire day on your computer
  • require more skills for right execution and stock picking
  • Base breakouts are most suited for this
    • VCP, cup with handle, flat base, Double bottom, Ipo base, retest ath
    • low cheat setup that i am currently using
    • big base ath breakout
    • big Flag breakout after stock is up more than 50-70% in previous uptrend
  • Benefits
    • low maintainace system, can be done with full time job
    • you'll be benifit a lot during short correction 5-10%, you'll losse some money but you'll regain your profit in next 3-4 days nothing to about
  • Downside
    • Good stock selection is very important part for positional trading. if you pick bad stock or bad sector you'll miss out on atleast 1 rally
    • Since you're not watching market entire day, you can missout on selling during market crash or market health deteriorate.
    • During major carsh Lossing major chuck of profit withing 3-4 days can be really bad for your mental health
    • Major gap down due to some bad news can wipe out your months worth of gain
    • Only suitable for full bull market, you'll sit out in cash during bear market

Tip

Do swing trading to build up your capital since you have more time in early years and can take more risk. switch to positional trading when you have expertise and big capital